RZG-594/A, RAJ NAGAR
RZG-594/A, RAJ NAGAR
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II, PALAM COLONY-45 II, PALAM COLONY-45 “Way to Leading Professionals”“Way to Leading Professionals” Prepared by- Rupanter Aggarwal Prepared by- Rupanter Aggarwal
Mob. No. 9645610182 Mob. No. 9645610182
BRANCH ACCOUNTS BRANCH ACCOUNTS
Q.1 P and Co. of Chennai sends goods to its branch at
Q.1 P and Co. of Chennai sends goods to its branch at HyderabadHyderabad at co
at cost. The st. The branch branch sells sells goods fgoods for cash or cash and and credit. credit. All theAll the proceeds realized by the branch are sent to head office and proceeds realized by the branch are sent to head office and expenses me
expenses met by the het by the head office, excead office, except petty in pt petty in this regard. this regard. TheThe branch keeps a Sales
branch keeps a Sales Journal Journal and and Debtor’s Debtor’s ledger ledger only. only. TheThe following is the list of transactions between the head office and following is the list of transactions between the head office and the Branch for the month ending 31 March:
the Branch for the month ending 31 March: Opening balances: Opening balances: Rs.Rs. Rs.Rs. Stock Stock 5,0005,000 Debtors Debtors 3,5003,500 Petty Cash Petty Cash 150150 8,6508,650
Goods sent to branch during the year
Goods sent to branch during the year 40,00040,000
Goods retuned by the branch
Goods retuned by the branch 2,5002,500
Cash Sales
Cash Sales 15,00015,000
Cash received on ledger
Cash received on ledger accountsaccounts 33,00033,000
Goods returned by the debtors
Goods returned by the debtors 3,0003,000
Discount allowed
Discount allowed 1,0001,000
Bad debts
Bad debts 1,5001,500
Branch expenses met by the H.O. Branch expenses met by the H.O.
Salaries and wages
Salaries and wages 5,0005,000
Rent and rates
Rent and rates 3,0003,000
Telephone
Telephone 1,0001,000
Others
Others 1,5001,500 10,50010,500
Cash sent to branch for petty cash Cash sent to branch for petty cash Closing balances at branch:
Closing balances at branch: Stock Stock 9,0009,000 Debtors Debtors 6,0006,000 Petty Cash Petty Cash 100100 15,10015,100
prepare Hyderabad Branch Account and Goods sent to Branch Account In prepare Hyderabad Branch Account and Goods sent to Branch Account In the books of H.O.
Q.2. ABC Ltd. Invoiced goods at cost to its branches situated in Q.2. ABC Ltd. Invoiced goods at cost to its branches situated in West Be
West Bengal. ngal. The branches The branches sell goods sell goods on credit on credit as weas well as foll as forr cash. From the following details relating to Kolkata branch, cash. From the following details relating to Kolkata branch, prepare a branch account to ascertain profit or loss at
prepare a branch account to ascertain profit or loss at the branch:the branch:
Goods received from ABC Ltd. Goods received from ABC Ltd. Goods returned to ABC Ltd. Goods returned to ABC Ltd. Cash sales Cash sales Credit sales Credit sales Allowances to customers Allowances to customers General trade charges General trade charges Returns from customers Returns from customers Bad debts
Bad debts
Discounts allowed to customers Discounts allowed to customers Cash received from debtors Cash received from debtors Rent and rates
Rent and rates
Wages and salaries Wages and salaries Stock: Opening Stock: Opening Closing Closing Rs. Rs. 25,400 25,400 350 350 16,500 16,500 30,000 30,000 150 150 650 650 300 300 300 300 1,200 1,200 24,600 24,600 900 900 3,000 3,000 13,100 13,100 6,950 6,950
Q. 3. From the following transactions relating to Lucknow branch, Q. 3. From the following transactions relating to Lucknow branch, prepare a branch
prepare a branch account in account in the Bombay the Bombay head offichead office. e. All expensesAll expenses are paid by the branch as per
are paid by the branch as per arrangement with the head office:arrangement with the head office: Balances (1 April 20-1)
Balances (1 April 20-1)
Branch Stock (at cost to H.O.) Branch Stock (at cost to H.O.) Branch Debtors Branch Debtors Personal Computer Personal Computer Branch Bank Branch Bank Balances (31 March 20-2): Balances (31 March 20-2): Branch Debtors Branch Debtors Branch Bank Branch Bank Personal Computer Personal Computer
Branch Stock (at cost to H.O.) Branch Stock (at cost to H.O.) Transactions at branch during the year: Transactions at branch during the year:
Goods transferred to branch Goods transferred to branch (at cost to H.O.)
(at cost to H.O.)
Goods returned to H.O. by
Goods returned to H.O. by branchbranch (at cost to H.O.)
(at cost to H.O.)
Cash sales paid into bank Cash sales paid into bank Credit sales
Credit sales
Sales returns at selling price Sales returns at selling price
Cheques received from customers Cheques received from customers for credit sales
for credit sales
Rs. Rs. 3,78,000 3,78,000 1,35,500 1,35,500 45,000 45,000 9,650 9,650 ? ? ? ? ? ? 2,70,000 2,70,000 7,62,000 7,62,000 15,000 15,000 1,56,000 1,56,000 8,25,000 8,25,000 3,750 3,750 8,45,000 8,45,000
Discount allowed Discount allowed
Bad debts written off Bad debts written off
Aggregate amount of cash transferred Aggregate amount of cash transferred from branch bank to H.O.
from branch bank to H.O. bankbank Account during the year on
Account during the year on month-wisemonth-wise basis
basis
Rent and rates Rent and rates Wages
Wages
General expenses General expenses
Transactions at H.O on behalf of
Transactions at H.O on behalf of branch duringbranch during the year:
the year:
Goods transferred to branch Goods transferred to branch 9at cost to H.O.)
9at cost to H.O.)
Goods returned from branch Goods returned from branch (at cost to H.O.)
(at cost to H.O.)
Cash received from branch Cash received from branch Salaries of branch staff Salaries of branch staff
7,800 7,800 1,500 1,500 8,95,000 8,95,000 56,000 56,000 45,000 45,000 7,630 7,630 As above As above As above As above As above As above 1,52,500 1,52,500
Provide depreciation at 20% p.a.
Provide depreciation at 20% p.a. on personal Computer.on personal Computer.
Q.4. Calculate the invoice price of the goods sent to branch and Q.4. Calculate the invoice price of the goods sent to branch and the profit margin included therein:
the profit margin included therein: (i)
(i) Goods amounting to Rs. 2,00,000 at cost are sent to theGoods amounting to Rs. 2,00,000 at cost are sent to the branch at cost
branch at cost plus plus 20%.20%. (ii)
(ii) Goods costing Rs. 1,50,000 are invoiced to branch at 30%Goods costing Rs. 1,50,000 are invoiced to branch at 30% above cost.
above cost. (iii)
(iii) Goods costing Rs. 2,50,000 are sent to branch at 120% Goods costing Rs. 2,50,000 are sent to branch at 120% of theof the cost price to head office.
cost price to head office. (iv)
(iv) Goods costing Rs. 4,20,000 are invoiced to branch to giveGoods costing Rs. 4,20,000 are invoiced to branch to give grass margin of 40% on sale.
grass margin of 40% on sale. (v)
(v) Goods sent to branch (at cost to branch) Rs. 3,60,000 haveGoods sent to branch (at cost to branch) Rs. 3,60,000 have been invoiced at 20% above the cost
been invoiced at 20% above the cost (vi)
(vi) Goods received from head office Rs.1,20,000. Goods-in-Goods received from head office Rs.1,20,000. Goods-in-transit Rs. 20,000. Goods are invoiced at cost + 40%.
transit Rs. 20,000. Goods are invoiced at cost + 40%. Q.5.
Q.5. A head officA head office in Mumbai he in Mumbai has a branch I as a branch I Delhi to wDelhi to which goodshich goods are invoiced by the head office at cost plus 25%. Prepare Branch are invoiced by the head office at cost plus 25%. Prepare Branch Account in the books
Opening Stock Rs. 12,500; Opening Debtors Rs. 12,000; Goods Received Opening Stock Rs. 12,500; Opening Debtors Rs. 12,000; Goods Received from Mumbai Rs. 40,000; Cash Sales Rs. 16,000; Cash Received from from Mumbai Rs. 40,000; Cash Sales Rs. 16,000; Cash Received from Debtors Rs. 29,500; Goods returned to H.O. Rs. 2,000; Cash Received Debtors Rs. 29,500; Goods returned to H.O. Rs. 2,000; Cash Received from Expenses Rs. 14,500; Stock at the end Rs. 15,000; Debtors at the from Expenses Rs. 14,500; Stock at the end Rs. 15,000; Debtors at the end Rs. 22,500.
end Rs. 22,500.
Q. 6. X Company has a branch at Delhi. Goods are invoiced form Q. 6. X Company has a branch at Delhi. Goods are invoiced form Head Office at cost plus 33
Head Office at cost plus 331/31/3. Find out profit at the branch. Find out profit at the branch according to Debtors
according to Debtors System.System. Opening Balances: Opening Balances: Debtors Debtors Petty Cash Petty Cash Furniture Furniture Stock (I.P) Stock (I.P)
Cash sent by Head Office for Petty Expenses Cash sent by Head Office for Petty Expenses Branch Expenses and Losses:
Branch Expenses and Losses: Freight and Advertisement Freight and Advertisement Bad debts Bad debts Depreciation on Furniture Depreciation on Furniture Petty Expenses Petty Expenses Sales: Sales: Cash Cash Credit Credit
Goods returned by Debtors Goods returned by Debtors
Goods returned by Branch to Head
Goods returned by Branch to Head OfficeOffice Cash received from Debtors
Cash received from Debtors Stock at the end at I.P
Stock at the end at I.P
Goods invoiced by Head Office during the year Goods invoiced by Head Office during the year
Rs. Rs. 10,000 10,000 1,000 1,000 2,000 2,000 8,000 8,000 2,000 2,000 5,600 5,600 50 50 80 80 1,500 1,500 50,000 50,000 3,600 3,600 800 800 2,000 2,000 20,000 20,000 7,800 7,800 88,000 88,000
Q.7. Modern shoe Stores has an old established Branch at Q.7. Modern shoe Stores has an old established Branch at Chandigarh.
Chandigarh. Goods are Goods are invoiced to invoiced to the branch the branch at 20% at 20% profit onprofit on sales, the Branch having been instructed to sent all cash daily to sales, the Branch having been instructed to sent all cash daily to the hea
the head office. d office. All expeAll expenses are paid nses are paid by the by the head office head office exceptexcept petty are required to draw up branch account as it would appear petty are required to draw up branch account as it would appear in the books of the head Office, i.e., Modern shoe Stores:
stock on Jan 1, 2002 (Invoice Price) stock on Jan 1, 2002 (Invoice Price) sundry Debtors on Jan 1, 2002
sundry Debtors on Jan 1, 2002 Cash in hand on Jan 1, 2002 Cash in hand on Jan 1, 2002 Office furniture On Jan 1, 2002 Office furniture On Jan 1, 2002 Goods supplied by the
Goods supplied by the Head Office (InvoiceHead Office (Invoice Price)
Price)
Goods Returned to Head Office Goods Returned to Head Office Cash received from Debtors Cash received from Debtors Cash Sales Cash Sales Credit Sales Credit Sales Discount Allowed Discount Allowed
Expenses Paid by the Head Office: Expenses Paid by the Head Office:
Rent Rent Salary Salary
Stationery and Printing Stationery and Printing
Petty expenses paid by the Branch Manager Petty expenses paid by the Branch Manager Provide depreciation on furniture @ 10% Provide depreciation on furniture @ 10% p.a.p.a. Rent outstanding
Rent outstanding
Stock on 31.12.2002 (Invoice Price) Stock on 31.12.2002 (Invoice Price)
Rs. Rs. 15,000 15,000 9,000 9,000 400 400 1,200 1,200 80,000 80,000 1,000 1,000 80,000 80,000 1,000 1,000 480 480 30,000 30,000 50,000 50,000 30,000 30,000 300 300 3,900 3,900 280 280 500 500 14,000 14,000 Q.8. An
Q.8. Anderson derson bros., Chbros., Chennai ennai has a has a branch branch at Aat Agra. gra. All goAll goodsods required for sale at Agra and supplied from Chennai at cost plus required for sale at Agra and supplied from Chennai at cost plus 25% and all cash received at the branch is banked daily in the 25% and all cash received at the branch is banked daily in the Head Office
Head Office Account opeAccount opened in a bank ned in a bank at Agra. at Agra. From the foFrom the followingllowing particulars, give Branch Account, branch Debtors Account:
particulars, give Branch Account, branch Debtors Account:
Stock (1.1.1999) Stock (1.1.1999) Debtors (1.1.1999) Debtors (1.1.1999) Petty Cash (1.1.1999) Petty Cash (1.1.1999) Goods invoiced to Goods invoiced to Branch Branch
Returned goods to H.O. Returned goods to H.O. Bad debts
Bad debts
Allowance given Allowance given Petty cash expenses Petty cash expenses Stock 31.12.1999 Stock 31.12.1999 Debtors 31.12.1999 Debtors 31.12.1999 Rs. Rs. 7,900 7,900 11,300 11,300 90 90 25,000 25,000 1,000 1,000 100 100 450 450 240 240 8,400 8,400 19,510 19,510 Cash Sales Cash Sales
Reserve for bad and Reserve for bad and doubtful debts
doubtful debts
Return from Debtors Return from Debtors Branch expenses Branch expenses Paid By H.O. Paid By H.O. Rent Rent Salary Salary Sundries Sundries Total sales Total sales
Remittance to Branch for Remittance to Branch for Petty Cash Petty Cash Rs. Rs. 1,400 1,400 1,500 1,500 400 400 1,400 1,400 1,500 1,500 700 700 34,900 34,900 280 280 1,200 1,200 2,400 2,400
Q.9. Shri X has a r
Q.9. Shri X has a retail branch at Alletail branch at Allahabad. ahabad. Goods are seGoods are sent by thent by the Head Office to the branch marked at selling price which is cost Head Office to the branch marked at selling price which is cost plus 25%. All the expenses of the branch are paid by the Head plus 25%. All the expenses of the branch are paid by the Head Office.
Office. All cash collecteAll cash collected by the d by the Branch (from Branch (from customers and customers and fromfrom cash sales) is deposited to the credit of H.O. From the following cash sales) is deposited to the credit of H.O. From the following particulars of the Branch, prepare Branch Stock Account, Branch particulars of the Branch, prepare Branch Stock Account, Branch Debtors Account, Branch Expenses Account and Branch Debtors Account, Branch Expenses Account and Branch Adjustment Account in the books of
Adjustment Account in the books of the Head Office:the Head Office: Debtors on 1.1.1999
Debtors on 1.1.1999 Debtors on 31.12.1999 Debtors on 31.12.1999
Inventory with the Branch at
Inventory with the Branch at Invoice Price:Invoice Price: On 1.1.1999
On 1.1.1999 On 31.12.1999 On 31.12.1999
Cash sales during the year Cash sales during the year
Total amount deposited in the H.O. Total amount deposited in the H.O. account during the year
account during the year
Returned goods to H.O. at Invoice Price Returned goods to H.O. at Invoice Price Salaries paid
Salaries paid Rent paid Rent paid
Discount allowed to customers Discount allowed to customers Bad Debts written
Bad Debts written Spoilage Spoilage Rs. Rs. 12,000 12,000 14,000 14,000 16,000 16,000 17,000 17,000 60,000 60,000 1,27,000 1,27,000 5,000 5,000 6,000 6,000 4,000 4,000 2,000 2,000 1,000 1,000 2,000 2,000
Q.10. Agra head office supplies goods to its branch at Alwar at Q.10. Agra head office supplies goods to its branch at Alwar at invoice price which is cost
invoice price which is cost PlusPlus 50%. 50%. All All cash cash received received by by thethe branch is remitted to Agra and all branch expenses are paid by the branch is remitted to Agra and all branch expenses are paid by the head
head office. office. From From the the following following particulars particulars related related to to AlwarAlwar branch for the year 1999 prepare Branch Debtors Account.
branch for the year 1999 prepare Branch Debtors Account.
Branch Stock Account and Branch Adjustment Account in the Branch Stock Account and Branch Adjustment Account in the books of the head office so as to find out the gross profit and net books of the head office so as to find out the gross profit and net profit made by the branch:
profit made by the branch: Stock with Branch on 1-1-1999 Stock with Branch on 1-1-1999 (at invoice price)
(at invoice price)
Branch Debtors on 1-1-1999 Branch Debtors on 1-1-1999 Petty cash balance on 1-1-1999 Petty cash balance on 1-1-1999 Goods received from head office Goods received from head office (at invoice price)
(at invoice price)
Goods returned to Head office Goods returned to Head office Credit Sales Rs. 87000;
Credit Sales Rs. 87000; Sales ReturnsSales Returns
Rs. Rs. 66,000 66,000 22,000 22,000 500 500 2,04,000 2,04,000 6,000 6,000
Rs. 3000; Cash Sales Rs. 106000 Rs. 3000; Cash Sales Rs. 106000
Allowance to customer on Selling Price Allowance to customer on Selling Price (already adjusted while invoicing)
(already adjusted while invoicing) Cash received from debtors
Cash received from debtors Discount allowed to Debtors Discount allowed to Debtors
Expenses (Cash Paid by Head Office): Expenses (Cash Paid by Head Office): Rent Rs. 2400; Salaries Rs. 24000 Rent Rs. 2400; Salaries Rs. 24000 Petty Cash Rs. 2000
Petty Cash Rs. 2000
Stock with Branch on 31-12-1999 Stock with Branch on 31-12-1999 (at invoice price)
(at invoice price)
Petty Cash Balance on 31-12-1999 Petty Cash Balance on 31-12-1999
2,000 2,000 93,000 93,000 2,400 2,400 69,000 69,000 100 100
Q.11. Onkar Corporation Ltd. has two branches- one at Jaipur and Q.11. Onkar Corporation Ltd. has two branches- one at Jaipur and another at Lucknow. Goods are invoice to branches at cost plus another at Lucknow. Goods are invoice to branches at cost plus 50%. Branches remit all cash received to Head Office and all 50%. Branches remit all cash received to Head Office and all expenses are met by the H.O. From the following particulars, expenses are met by the H.O. From the following particulars, prepare the necessary accounts on the ‘stock and Debtors system’ prepare the necessary accounts on the ‘stock and Debtors system’ to show the profit earned at the Jaipur Branch:
to show the profit earned at the Jaipur Branch:
Stock on 1 Jan, 1997 Stock on 1 Jan, 1997 Debtors on 1 Jan, 1997 Debtors on 1 Jan, 1997
Goods sent to branch (at cost) Goods sent to branch (at cost) Sales at Branch Sales at Branch Cash Cash Credit Credit
Cash collected form Debtors Cash collected form Debtors
goods returned by Branch to Head goods returned by Branch to Head Office
Office
Goods transferred from Lucknow Goods transferred from Lucknow Branch to Jaipur Branch
Branch to Jaipur Branch Shortage of stock
Shortage of stock
Shortage of Stock at Branch Shortage of Stock at Branch Discount allowed to customers Discount allowed to customers Expenses at Branch Expenses at Branch Rs. Rs. 9,300 9,300 6,800 6,800 34,000 34,000 25,010 25,010 31,000 31,000 30,400 30,400 1,200 1,200 1,500 1,500 2,100 2,100 450 450 200 200 5,400 5,400
Q.12. VS & Co. of Hyderabad have a branch at Warangal. All Q.12. VS & Co. of Hyderabad have a branch at Warangal. All purchases are made by the head office and goods sent to branch purchases are made by the head office and goods sent to branch are invoiced at
the branch
the branch are on care on credit terms. redit terms. Branch expBranch expenses are enses are paid by paid by thethe head office and all cash received by the branch is remitted to the head office and all cash received by the branch is remitted to the head off
head office. ice. All branch triseAll branch trisections are ctions are recorded in recorded in the head the head officeoffice books.
books. The The balance balance relating relating to tto the he branch in branch in the Hthe Head Oead Officeffice Ledger on 1.1.1994were as follows:
Ledger on 1.1.1994were as follows: Branch Stock Account (Invoice Price) Branch Stock Account (Invoice Price) Branch Debtors Account
Branch Debtors Account
Transactions during the year to 31.12.1994
Transactions during the year to 31.12.1994 werewere
Goods sent to branch at
Goods sent to branch at Invoice PriceInvoice Price
Returns form branch to head Office at invoice Price Returns form branch to head Office at invoice Price Cash received form Debtors
Cash received form Debtors discount allowed to Debtors discount allowed to Debtors Branch Expenses paid by head
Branch Expenses paid by head officeoffice
Branch Stock Account (Invoice Price) 31.12.1994 Branch Stock Account (Invoice Price) 31.12.1994 Branch Debtors 31.12.1994 Branch Debtors 31.12.1994 Rs. Rs. 36,000 36,000 25,750 25,750 3,24,600 3,24,600 6,420 6,420 3,10,000 3,10,000 5,750 5,750 30,000 30,000 48,180 48,180 10,000 10,000 Prepare in the
Prepare in the head office books (a) Branch Stock Account, (b) head office books (a) Branch Stock Account, (b) BranchBranch Debtors Account, (c) Branch Expenses Account and (d) Branch
Debtors Account, (c) Branch Expenses Account and (d) Branch Adjustment Account.
Adjustment Account.
Q.13. Delhi head office supplied goods to its branch at Kanpur at Q.13. Delhi head office supplied goods to its branch at Kanpur at invoice p
invoice price which rice which is cost is cost plus 50%. plus 50%. All cash All cash received received by theby the branch is remitted to Delhi and all branch expenses are paid by branch is remitted to Delhi and all branch expenses are paid by the head
the head office. office. From the From the following particulars following particulars relating to relating to KanpurKanpur branch for the year 1996, prepare Branch stock Account, Branch branch for the year 1996, prepare Branch stock Account, Branch Debtors Account, Branch Expenses Account and Branch Debtors Account, Branch Expenses Account and Branch adjustment Account in the books of the head office so as to find adjustment Account in the books of the head office so as to find our to gross profit made by the branch:
our to gross profit made by the branch:
Stock with Branch on 1.1.1996 (at invoice price) Stock with Branch on 1.1.1996 (at invoice price) Branch Debtors on 1.1.1996
Branch Debtors on 1.1.1996 Petty Cash balance 1.1.1996 Petty Cash balance 1.1.1996
Goods received from head office (at invoice price) Goods received from head office (at invoice price) Goods returned to head office
Goods returned to head office Credit sales less Returns
Credit sales less Returns Cash received form Debtors Cash received form Debtors Discount allowed to Debtors Discount allowed to Debtors Expenses (cash paid by head
Expenses (cash paid by head office)office) Rent Rent 24002400 Salaries Salaries 2400024000 Petty Cash Petty Cash 10001000 Cash Sales Cash Sales Rs. Rs. 60,000 60,000 12,000 12,000 100 100 1,86,000 1,86,000 13,000 13,000 86,000 86,000 90,000 90,000 2,400 2,400 27,400 27,400 1,04,000 1,04,000
Stock with Branch on 31.12.1996
Stock with Branch on 31.12.1996 (at invoice price)(at invoice price) Petty Cash balance on 31.12.1996
Petty Cash balance on 31.12.1996
54,000 54,000 100 100
Q.14. A Kolkata firm invoices goods to its branch at Mumbai at Q.14. A Kolkata firm invoices goods to its branch at Mumbai at cost
cost plus plus 50%. From the following particulars prepare Branch50%. From the following particulars prepare Branch Stock Account and Branch Adjustment Account as they would Stock Account and Branch Adjustment Account as they would appear in the books of Head office:
appear in the books of Head office: Stock at the commencement
Stock at the commencement at branch at invoice price at branch at invoice price
Stock at close at branch at invoice price Stock at close at branch at invoice price Goods sent to branch during the ear Goods sent to branch during the ear (including goods invoiced at Rs. 100000 (including goods invoiced at Rs. 100000 to Branch but not received by branch to Branch but not received by branch before to close of the year)
before to close of the year)
Return of goods to head office by Return of goods to head office by customers
customers of the branch of the branch
Credit sales at branch Credit sales at branch Cash sales at branch Cash sales at branch
Invoice value of goods pilfered Invoice value of goods pilfered
Rs. Rs. 7,50,000 7,50,000 6,00,000 6,00,000 50,00,000 50,00,000 2,50,000 2,50,000 45,00,000 45,00,000 2,50,000 2,50,000 50,000 50,000 75,000 75,000
Normal loss at branch due to wastage etc. Normal loss at branch due to wastage etc.
The head office closes its books on 31 March 2004. The head office closes its books on 31 March 2004. Q.15.Johnson
Q.15.Johnson & Co. & Co. branch a branch a Kolkata. Kolkata. Goods are Goods are invoiced tinvoiced to theo the branch at
branch at cost Plcost Plus 25%. us 25%. Branch is Branch is instructed tinstructed to depoo deposit cashsit cash everyday in
everyday in the head ofthe head office accounfice account with the t with the bank. bank. All expenseAll expensess are paid by cheques by
are paid by cheques by the head office except petty cash expensesthe head office except petty cash expenses which
which are are paid paid by by the the branch branch manager. manager. From From the the followingfollowing particulars, prepare branch account in the books of head office: particulars, prepare branch account in the books of head office:
Stock on 1 April, 2006 Stock on 1 April, 2006 Stock on 31 March, 2007 Stock on 31 March, 2007
Sundry debtors on 1 April, 2006 Sundry debtors on 1 April, 2006 Sundry debtors 31 March, 2007 Sundry debtors 31 March, 2007 Cash sales for the year
Cash sales for the year Credit sales for the year Credit sales for the year
Cash remitted to the head office Cash remitted to the head office
Furniture purchased by the branch manager Furniture purchased by the branch manager Goods invoiced from the head office
Goods invoiced from the head office Expenses paid by the head office Expenses paid by the head office Expenses paid by the branch Expenses paid by the branch
Rs. Rs. 2,500 2,500 3,000 3,000 14,000 14,000 1,800 1,800 10,800 10,800 700 700 15,000 15,000 1,200 1,200 18,200 18,200 1,640 1,640 120 120
Q.16. A trader has a
Q.16. A trader has a branch at Kolkata to which goods are invoicedbranch at Kolkata to which goods are invoiced at cost plus 20%. Prepare a Branch
at cost plus 20%. Prepare a Branch Account in H.O. books fromAccount in H.O. books from the following:
the following:
Opening stock at branch Opening stock at branch Cash sales at branch Cash sales at branch Credit sales
Credit sales
Collection from debtors Collection from debtors Goods received from H.O. Goods received from H.O. Branch expenses: Branch expenses: Paid by H.O. Paid by H.O. Paid by branch Paid by branch Expenses unpaid Expenses unpaid Closing stock at branch Closing stock at branch Closing balance of debtors Closing balance of debtors
Goods-in-Goods-in-transit from transit from H.O.H.O.
3,000 3,000 6,000 6,000 1,400 1,400 Rs. Rs. 24,000 24,000 17,500 17,500 41,000 41,000 37,900 37,900 30,000 30,000 10,400 10,400 18,000 18,000 9,160 9,160 3,600 3,600
Q.17. Goldie Ltd. invoices goods to its branch at selling price Q.17. Goldie Ltd. invoices goods to its branch at selling price which is cost plus 60%. from the following particulars, prepare which is cost plus 60%. from the following particulars, prepare branch account for the year indeed 31 March, 2007:
branch account for the year indeed 31 March, 2007:
Stock at branch on 1 April, 2006 at
Stock at branch on 1 April, 2006 at invoice priceinvoice price Branch debtors on 1 April, 2006
Branch debtors on 1 April, 2006 Branch furniture on 1 April, 2006 Branch furniture on 1 April, 2006
Transactions during the year 2006-2007: Transactions during the year 2006-2007:
Invoice price of goods sent to
Invoice price of goods sent to branchbranch Cash sales at branch
Cash sales at branch Credit sales at branch Credit sales at branch
Cash expenses for the branch directly met by Head Office Cash expenses for the branch directly met by Head Office Discount allowed to branch debtors
Discount allowed to branch debtors Bad debts written off
Bad debts written off
Stock at branch on 31 March, 2007 at invoice price Stock at branch on 31 March, 2007 at invoice price Branch debtors on 31 march, 2007
Branch debtors on 31 march, 2007 Spoiled goods written off at invoice
Spoiled goods written off at invoice priceprice
Rs. Rs. 2,40,000 2,40,000 2,13,750 2,13,750 2,00,000 2,00,000 31,20,000 31,20,000 21,60,000 21,60,000 6,24,000 6,24,000 1,62,600 1,62,600 6,000 6,000 3,750 3,750 3,36,000 3,36,000 1,08,000 1,08,000 500 500
Depreciate furniture @ 15% per annum. Depreciate furniture @ 15% per annum. Q. 18. R
Q. 18. Rohit and Cohit and Co. of Do. of Delhi as a elhi as a branch at Bhivani. branch at Bhivani. Goods areGoods are invoiced to
maintain account books and all reimbursed by the head office. maintain account books and all reimbursed by the head office. From the following particulars, prepare the branch account in the From the following particulars, prepare the branch account in the book of head office for
book of head office for six months ending 30 six months ending 30 September, 2007:September, 2007:
Stock on 1.4.07(at cost to head
Stock on 1.4.07(at cost to head office)office) Debtors on 1.4.07 Debtors on 1.4.07 Furniture on 1.4.07 Furniture on 1.4.07 Petty cash on 1.4.07 Petty cash on 1.4.07
Transactions for six months: Transactions for six months:
Goods received from head office (at invoice price) Goods received from head office (at invoice price) Cash sales
Cash sales Credit sales Credit sales
Goods returned to head office(at invoice price) Goods returned to head office(at invoice price) Normal loss
Normal loss
Sales returns by customers to branch Sales returns by customers to branch Cash received from debtors
Cash received from debtors Bad debts
Bad debts
Trade discount to customers (already taken into Trade discount to customers (already taken into account while invoicing as
account while invoicing as promotional expenses)promotional expenses) Bill receivable received from
Bill receivable received from customers at branchcustomers at branch Goods sent to branch on 27.9.07, received by Goods sent to branch on 27.9.07, received by Branch on 5.10.07:
Branch on 5.10.07:
Cash sent to branch for expenses Cash sent to branch for expenses Cash discount allowed customers Cash discount allowed customers Balances on 30.9.07 Balances on 30.9.07 Stock Stock Debtors Debtors Petty cash Petty cash Rs. Rs. 55,000 55,000 15,000 15,000 12,000 12,000 500 500 2,25,000 2,25,000 1,95,000 1,95,000 80,000 80,000 12,750 12,750 1,000 1,000 500 500 50,000 50,000 400 400 12,000 12,000 15,000 15,000 1,500 1,500 10,500 10,500 800 800 5,600 5,600 ? ? 500 500 Q. 19.
Q. 19. Gupta and Gupta and Sons, DeSons, Delhi has a lhi has a branch at branch at Bulandshar. Bulandshar. GoodsGoods are invoiced at cost plus 25% at which the branch sells them. are invoiced at cost plus 25% at which the branch sells them. From the following, prepare Branch Stock Account and Branch From the following, prepare Branch Stock Account and Branch Profit and Loss Account for the year ended 31 December, 2006: Profit and Loss Account for the year ended 31 December, 2006: Balances on 1 Jan, 2006
Balances on 1 Jan, 2006
Branch stock at on voice
Branch stock at on voice priceprice Branch debtors Branch debtors Branch cash Branch cash Transactions during 2006 Transactions during 2006
Goods invoiced to branch Goods invoiced to branch
Goods returned by branch to head
Goods returned by branch to head officeoffice Credit sales at branch
Credit sales at branch Cash sales at branch Cash sales at branch
Rs. Rs. 12,500 12,500 8,500 8,500 2,000 2,000 1,62,500 1,62,500 6,250 6,250 87,500 87,500 51,250 51,250
Cash received from debtors at
Cash received from debtors at branchbranch
Bill receivable received from debtors at branch Bill receivable received from debtors at branch Amount received by branch on discounting of the Amount received by branch on discounting of the Above mentioned bill receivable
Above mentioned bill receivable Cash sent to branch for expenses Cash sent to branch for expenses Actual cash expenses at branch Actual cash expenses at branch
Shortage of stock at branch at invoice price Shortage of stock at branch at invoice price Cash discount allowed to branch customers Cash discount allowed to branch customers Balance as on 31 December, 2006 Balance as on 31 December, 2006 Branch stock Branch stock Branch debtors Branch debtors Branch cash Branch cash 78,650 78,650 5,000 5,000 4,900 4,900 18,000 18,000 17,950 17,950 75 75 390 390 ? ? ? ? 4,500 4,500
Also prepare Branch Account under Debtors’ System. Also prepare Branch Account under Debtors’ System.
Show all working noted clearly. Show all working noted clearly. Q.20.
Q.20. ESS KAY ESS KAY Ltd. Ltd. of Koof Kolkata invoicelkata invoices goods s goods to its to its branch atbranch at Mumbai c
Mumbai cost plus ost plus 33-1/3 perce33-1/3 percent. nt. from the from the following following particulars,particulars, prepare the branch stock account and the branch profit and loss prepare the branch stock account and the branch profit and loss account as they would appear in the books of H.O.:
account as they would appear in the books of H.O.:
Stock at commencement at Branch at invoice
Stock at commencement at Branch at invoice priceprice Stock at close at Branch at invoice price
Stock at close at Branch at invoice price
Goods sent to branch during the year at invoice price Goods sent to branch during the year at invoice price
(Including goods invoiced at Rs. 10,000 to Branch on (Including goods invoiced at Rs. 10,000 to Branch on 31.3.2006 but not received by Branch before close of year). 31.3.2006 but not received by Branch before close of year). Returns of goods to H.O. (invoice price)
Returns of goods to H.O. (invoice price) Credit sales at branch
Credit sales at branch Cash sales at branch Cash sales at branch
Invoice value of goods pilfered Invoice value of goods pilfered
Normal loss at branch due to wastage and deterioration of Normal loss at branch due to wastage and deterioration of stock (invoice value)
stock (invoice value)
Rs. Rs. 75,000 75,000 60,000 60,000 5,00,000 5,00,000 25,000 25,000 4,50,000 4,50,000 25,000 25,000 5,000 5,000 7,500 7,500
Q.21. Mr. X has a branch at Delhi and Hardwar and the goods are Q.21. Mr. X has a branch at Delhi and Hardwar and the goods are invoiced
invoiced at a at a profit oprofit of 20% f 20% on saleson sales. . Following Following information isinformation is available of the transactions at Delhi branch for the year ending available of the transactions at Delhi branch for the year ending 31 March 2008:
31 March 2008:
Stock at invoice price Stock at invoice price
As on 1.4.2007 As on 1.4.2007 Rs. Rs. 40,000 40,000 As on 1.4.2008 As on 1.4.2008 Rs. Rs. ? ?
Debtors Debtors Petty cash Petty cash Transactions during 2007-08 Transactions during 2007-08
Goods sent to branch at invoice Goods sent to branch at invoice price
price
Goods returned to H.O. Goods returned to H.O. Cash sales
Cash sales Credit sales Credit sales
Normal loss at invoice price Normal loss at invoice price Goods pilfered at invoice price Goods pilfered at invoice price Goods lost by fire at invoice price Goods lost by fire at invoice price Insurance company paid to H.O. loss Insurance company paid to H.O. loss by fire at Delhi
by fire at Delhi
Cash sent for petty expenses Cash sent for petty expenses
Bad debts at Delhi branch goods Bad debts at Delhi branch goods transferred to Hardwar branch under transferred to Hardwar branch under instructions from H.O.
instructions from H.O.
Insurance charges paid by H.O. Insurance charges paid by H.O. Goods returned by debtors
Goods returned by debtors
12,000 12,000 150 150 11,000 11,000 250 250 4,20,000 4,20,000 15,000 15,000 1,05,000 1,05,000 1,80,000 1,80,000 350 350 3,000 3,000 4,000 4,000 3,000 3,000 32,000 32,000 400 400 12,000 12,000 200 200 500 500
Q.22. Hindustan industries, Mumbai has a branch in Cochin to Q.22. Hindustan industries, Mumbai has a branch in Cochin to which o
which office gffice goods are oods are invoiced ainvoiced at cost t cost 25%. 25%. The branch The branch sellssells both for cash and on credit; branch expenses are paid direct from both for cash and on credit; branch expenses are paid direct from the head office and branch has to remit all cash received into
the head office and branch has to remit all cash received into headhead office bank
office bank account at Cochinaccount at Cochin. . From the followFrom the following details, ing details, relatingrelating to calendar year 2006, prepare the account in the Head office to calendar year 2006, prepare the account in the Head office ledger and ascertain the Branch profit by the following Stock and ledger and ascertain the Branch profit by the following Stock and Debtors sys
Debtors system. tem. Branch does Branch does not maintain not maintain any books of any books of accountsaccounts but sends weekly returns to the Head office:
but sends weekly returns to the Head office:
Goods received from Goods received from head
head
Office at invoice price Office at invoice price Returns to head office at Returns to head office at invoice price
invoice price
Stock at cochin at 1 Jan Stock at cochin at 1 Jan 2006 2006 Sales: Cash Sales: Cash Credit Credit
Sundry debtors on 1 Jan Sundry debtors on 1 Jan 2006
2006
Cash received from Cash received from debtors debtors Rs. Rs. 6,00,000 6,00,000 12,000 12,000 60,000 60,000 2,00,000 2,00,000 3,60,000 3,60,000 72,000 72,000 3,20,000 3,20,000 Discount allowed to Discount allowed to Debtors Debtors Bad Debts Bad Debts
Sales returns to Cochin Sales returns to Cochin branch
branch
Rent, Rates, Taxes at Rent, Rates, Taxes at branch
branch
Salaries, Wages, Bonus Salaries, Wages, Bonus at branch
at branch
Office expenses Office expenses
Stock at the end at Stock at the end at Invoice price Invoice price Rs. Rs. 6,000 6,000 4,000 4,000 8,000 8,000 18,000 18,000 60,000 60,000 6,000 6,000 1,20,000 1,20,000
Q.23. Delhi head office supplies goods to its branch at Kanpur at Q.23. Delhi head office supplies goods to its branch at Kanpur at invoice price which is cost plus 50%. All cash received by the invoice price which is cost plus 50%. All cash received by the branch is remitted to Delhi and all branch expenses are paid by branch is remitted to Delhi and all branch expenses are paid by the head of
the head offices. fices. From the folloFrom the following particulars relwing particulars related to Kanpated to Kanpurur branch for the year 2006, prepare
branch for the year 2006, prepare—— (i) Branch Account, and
(i) Branch Account, and
(ii) Branch Stock Account, branch debtors account, branch expenses (ii) Branch Stock Account, branch debtors account, branch expenses account and branch adjustment account in the books of the
account and branch adjustment account in the books of the head office sohead office so as to find out the Gross profit and Net
as to find out the Gross profit and Net Profit made by the Branch.Profit made by the Branch.
Stock with branch on 1.1.06(at invoice price) Stock with branch on 1.1.06(at invoice price) Branch debtors on 1.1.06
Branch debtors on 1.1.06 Petty cash balance on 1.1.06 Petty cash balance on 1.1.06
Goods received from head office (at invoice price) Goods received from head office (at invoice price) Goods returned to head office
Goods returned to head office Credit sales
Credit sales lessless returnsreturns
Allowance to customers of selling price Allowance to customers of selling price (already adjusted while invoicing) (already adjusted while invoicing) Cash received from debtors
Cash received from debtors Discount allowed to debtors Discount allowed to debtors
Expenses (cash paid by Head Office): Expenses (cash paid by Head Office): Rent Rent Salaries Salaries Petty cash Petty cash Cash sales Cash sales
Stock with branch on 31.12.06 (at invoice price) Stock with branch on 31.12.06 (at invoice price) Petty cash balance on 31.12.2006
Petty cash balance on 31.12.2006
2,400 2,400 24,000 24,000 1,000 1,000 Rs. Rs. 60,000 60,000 12,000 12,000 100 100 1,86,000 1,86,000 3,000 3,000 84,000 84,000 2,000 2,000 90,000 90,000 2,400 2,400 27,400 27,400 1,04,000 1,04,000 54,000 54,000 100 100
Q.24. Rahul ltd. operates a number of retail
Q.24. Rahul ltd. operates a number of retail outlets to which goodsoutlets to which goods are invoiced at whole sale price which is cost plus 25%. These are invoiced at whole sale price which is cost plus 25%. These outlets sell the goods at the retail price which is wholesale price outlets sell the goods at the retail price which is wholesale price plus
plus 20%. 20%. Following Following is this the e information information regarding regarding one one of of thethe outlets for the year ending 31 March 1997:
outlets for the year ending 31 March 1997:
Stock at the outlet 1.4.06 Stock at the outlet 1.4.06
Goods invoiced to the outlet during the year Goods invoiced to the outlet during the year Gross profit made by the outlet
Gross profit made by the outlet
Rs. Rs. 30,000 30,000 3,24,000 3,24,000 60,000 60,000
Goods lost by fire Goods lost by fire
Expenses of the outlet for the year Expenses of the outlet for the year Stock at the outlet 31.3.07
Stock at the outlet 31.3.07
? ? 20,000 20,000 36,000 36,000
You are required to prepare the following accounts in the books of Rahul You are required to prepare the following accounts in the books of Rahul Ltd. for the year ended 31.3.07:
Ltd. for the year ended 31.3.07:
(i)Outlet Stock Account (ii) Outlet Profit and Loss Account (ii)Stock (i)Outlet Stock Account (ii) Outlet Profit and Loss Account (ii)Stock Reserve Account.
Reserve Account. Q.25. B.S.
Q.25. B.S. Ltd. operateLtd. operates a retail s a retail branch at branch at Ranchi. Ranchi. All purchasesAll purchases are made by the head office at Kolkata, goods for the branch are made by the head office at Kolkata, goods for the branch being delivered to it direct and charged out at selling price which being delivered to it direct and charged out at selling price which is cost price
is cost price PlusPlus 50%. 50%. all cash recall cash received by eived by the brancthe branch is remittedh is remitted to Kolkata. Branch expenses are paid by the branch out of an to Kolkata. Branch expenses are paid by the branch out of an impreset
impreset amount amount which is which is reimbursed reimbursed by Kby Kolkata olkata monthly. monthly. TheThe branch transactions are recorded in the books of the Kolkata branch transactions are recorded in the books of the Kolkata office.
office.
On 1 Jan 2008, stock in trade at the branch, at selling price, amounted to On 1 Jan 2008, stock in trade at the branch, at selling price, amounted to Rs. 48,660 and debtors to Rs. 6,440.
Rs. 48,660 and debtors to Rs. 6,440. During the year ended
During the year ended 31 December 2008, the following transactions took31 December 2008, the following transactions took place at the branch:
place at the branch:
Goods received by branch at selling price Goods received by branch at selling price Cash sales
Cash sales Credit sales Credit sales
Goods returned to Kolkata at selling price Goods returned to Kolkata at selling price Reduction in selling price authorized by
Reduction in selling price authorized by H.O.H.O. Cash received from debtors
Cash received from debtors
Debtors wirttern off as irrecoverable Debtors wirttern off as irrecoverable cash discounts allowed
cash discounts allowed
Rs. Rs. 1,21,800 1,21,800 64,150 64,150 51,280 51,280 1,560 1,560 970 970 42,660 42,660 650 650 1,120 1,120
A consignment of goods dispatched to branch in December 2008 at a A consignment of goods dispatched to branch in December 2008 at a selling price of Rs. 1,200, was not received by the branch until Jan 6, selling price of Rs. 1,200, was not received by the branch until Jan 6, 2009 and
2009 and had nohad not been t been included included in the in the stock stock figure. figure. The expensesThe expenses relating to the branch for the year ended 31 December 2008 amounted to relating to the branch for the year ended 31 December 2008 amounted to Rs. 17,290. On 31 December 2008, physical stock at branch, at selling Rs. 17,290. On 31 December 2008, physical stock at branch, at selling price amounted to Rs. 52,200.
you are required to write up the Branch Stock Account Maintained in you are required to write up the Branch Stock Account Maintained in Kolkata books to prepare the Trading and Profit and Loss Account of the Kolkata books to prepare the Trading and Profit and Loss Account of the branch for the year ended 31
branch for the year ended 31 December 2008.December 2008.
Q.26. The following information and particulars relate to New Q.26. The following information and particulars relate to New Delhi branch for the year 2006-07:
Delhi branch for the year 2006-07:
Stock Stock Debtors Debtors Petty cash Petty cash 31.3.06 31.3.06 50,000 50,000 70,000 70,000 250 250 31.3.07 31.3.07 75,000 75,000 95,000 95,000 120 120
Goods costing Rs. 5,50,000 were sold by the branch @ 25%, on cost; Goods costing Rs. 5,50,000 were sold by the branch @ 25%, on cost; cash s
cash sales amoales amounted to unted to Rs. 1,50,000 aRs. 1,50,000 and the nd the rest credit srest credit sales. ales. BranchBranch spent Rs. 30,000 for salaries Rs. 12,000 for rent and Rs. 8,000 for petty spent Rs. 30,000 for salaries Rs. 12,000 for rent and Rs. 8,000 for petty expenses.
expenses. All expensAll expenses were remites were remitted by Hted by H.O.. Branch r.O.. Branch receives all geceives all goodsoods from H.O. You are requested to show the New Delhi Branch Account in from H.O. You are requested to show the New Delhi Branch Account in the books of head office for the year 2006-07 and prove your answer by the books of head office for the year 2006-07 and prove your answer by preparing a Branch Trading and Branch
preparing a Branch Trading and Branch Profit and Loss Account.Profit and Loss Account. Q.27. A head office sends goods to its branch at cost
Q.27. A head office sends goods to its branch at cost plus plus 80%80% Goods are sold to customers at cost
Goods are sold to customers at cost plus plus 100%. 100%. From From thethe following particulars ascertain the profits made at the Head following particulars ascertain the profits made at the Head Office: Office: Stock Stock Purchases Purchases
Goods sent to Branch (Invoice price) Goods sent to Branch (Invoice price) Sales Sales H.O. H.O. Rs. Rs. 20,000 20,000 2,00,000 2,00,000 90,000 90,000 2,70,000 2,70,000 Branch Branch Rs. Rs. --90,000 90,000 Note:
Note: Sales at the H.O. are made at Sales at the H.O. are made at whole sale basis.whole sale basis.
Q.28. A Kolkata firm whose accounting year ends on 31 December Q.28. A Kolkata firm whose accounting year ends on 31 December has
has two two branches-one branches-one at at Agra Agra and and other other at at Banaras. Banaras. TheThe branches kee
branches keep a comp a complete seplete set of t of books. books. On 31 On 31 December, December, 2008,2008, the Agra and the Banaras branch accounts in Kolkata office books the Agra and the Banaras branch accounts in Kolkata office books
showed debit balances of Rs. 30,450 and Rs. 45,000 respectively showed debit balances of Rs. 30,450 and Rs. 45,000 respectively before taking the following information into account:
before taking the following information into account:
(a) Goods valued Rs. 2,000 were transferred from Agra to Banaras under (a) Goods valued Rs. 2,000 were transferred from Agra to Banaras under instructions from head office.
instructions from head office.
(b) The Agra branch collected Rs. 2,500 from an Agra customer of the (b) The Agra branch collected Rs. 2,500 from an Agra customer of the head office.
head office.
(c) The Banaras branch paid Rs. 5,000 for certain goods purchased by the (c) The Banaras branch paid Rs. 5,000 for certain goods purchased by the head office in
head office in Banaras.Banaras.
(d) Rs. 5,000 remitted by the Agra branch to Kolkata office on 29 (d) Rs. 5,000 remitted by the Agra branch to Kolkata office on 29 December 2008 were received on 3
December 2008 were received on 3 Jan following.Jan following.
(e) The Banaras branch received on behalf of the head office Rs. 1,500 as (e) The Banaras branch received on behalf of the head office Rs. 1,500 as dividend from a Banaras company.
dividend from a Banaras company.
(f) For the year 2008 the Agra branch showed a net loss of Rs. 1,250 and (f) For the year 2008 the Agra branch showed a net loss of Rs. 1,250 and the Banaras
the Banaras branch a branch a net profit net profit of Rs. of Rs. 5,400. 5,400. Pass jourPass journal entries nal entries toto record these matters in the head office books and write up the two branch record these matters in the head office books and write up the two branch accounts therein.
accounts therein.
Q.29. A Kolkata H.O. passes one entry at the end of each month to Q.29. A Kolkata H.O. passes one entry at the end of each month to adjust the position arising out of inter-branch transactions during adjust the position arising out of inter-branch transactions during the months.
the months. From the From the following efollowing enter-branch transactionter-branch transactions in Aprilns in April 20…, make the entries in the books of Kolkata Head Office:
20…, make the entries in the books of Kolkata Head Office: (give(give details of the workings)
details of the workings) (a)Delhi Branch
(a)Delhi Branch
(i) Received goods from Nagpur branch Rs. 9,000 and Ahmadabad branch (i) Received goods from Nagpur branch Rs. 9,000 and Ahmadabad branch Rs. 6,000.
Rs. 6,000.
(ii) Sent goods to Ahmadabad branch Rs. 15,000 and Nagpur branch Rs. (ii) Sent goods to Ahmadabad branch Rs. 15,000 and Nagpur branch Rs. 12,000.
12,000.
(iii) Received bills receivable from Ahmadabad from Ahmadabad branch (iii) Received bills receivable from Ahmadabad from Ahmadabad branch Rs. 9,000.
Rs. 9,000.
(iv) Sent acceptances to Nagpur branch Rs. 6,000
(iv) Sent acceptances to Nagpur branch Rs. 6,000 and Ahmadabad branchand Ahmadabad branch Rs. 3,000.
Rs. 3,000.
(b) Kanpur Branch (In addition to [a] above): (b) Kanpur Branch (In addition to [a] above):
(i) Received goods from Nagpur Branch Rs. 15,000 and Delhi branch Rs. (i) Received goods from Nagpur Branch Rs. 15,000 and Delhi branch Rs. 6,000.
6,000.
(ii) Cash sent to Nagpur branch Rs. 3,000 and Delhi branch Rs.
(ii) Cash sent to Nagpur branch Rs. 3,000 and Delhi branch Rs. 6,000.6,000. (C) Nagpur branch (In addition to [a] and [b]):
(i) Sent goods to Ahmadabad branch Rs. 9
(i) Sent goods to Ahmadabad branch Rs. 9,000.,000.
(ii) Received bills receivable from Ahmadabad branch Rs. 9,000. (ii) Received bills receivable from Ahmadabad branch Rs. 9,000. (iii) Received cash from Ahmadabad branch Rs. 5
(iii) Received cash from Ahmadabad branch Rs. 5,000.,000.
Q.30. Head office passes adjustment entry at the end of each Q.30. Head office passes adjustment entry at the end of each month to adjust the positions arising out of inter branch month to adjust the positions arising out of inter branch transaction in Jan 20x…, make the entry in the books o
transaction in Jan 20x…, make the entry in the books of headf head office:
office:
(a)Mumbai Branch (a)Mumbai Branch
(1) Received goods : Rs. 6,000 from Kolkata branch, Rs. 4,000 from (1) Received goods : Rs. 6,000 from Kolkata branch, Rs. 4,000 from Patna branch.
Patna branch.
(2) Sent goods : Rs. 10,000 to Patna, Rs. 8,000
(2) Sent goods : Rs. 10,000 to Patna, Rs. 8,000 to Kolkata.to Kolkata. (3) Received B/R : Rs. 6,000 from Patna.
(3) Received B/R : Rs. 6,000 from Patna. (4) Sent
(4) Sent acceptances: acceptances: Rs. 4,000 to KoRs. 4,000 to Kolkata, Rs. 2,000 lkata, Rs. 2,000 to Patna.to Patna. (b) Madras branch (apart from the above)
(b) Madras branch (apart from the above) (5)
(5) Received gReceived goods: oods: Rs. Rs. 10,000 from 10,000 from Kolkata, Kolkata, Rs. 4,000 Rs. 4,000 from from Mumbai.Mumbai. (6) Cash sent: Rs. 2,000 to Kolkata, Rs. 6,000
(6) Cash sent: Rs. 2,000 to Kolkata, Rs. 6,000 to Mumbai.to Mumbai. (c) Kolkata Branch (apart from the above)
(c) Kolkata Branch (apart from the above) (7) Sent goods to Patna: Rs. 6,000.
(7) Sent goods to Patna: Rs. 6,000. (8) Paid B/P : Rs. 4,000
(8) Paid B/P : Rs. 4,000 to Patna; Rs. 4,000 Cash to Patna.to Patna; Rs. 4,000 Cash to Patna.
Q.31. A Limited Company has its head office in Delhi and a Branch Q.31. A Limited Company has its head office in Delhi and a Branch in Mumbai w
in Mumbai where a sehere a separate set parate set of books is of books is used. used. The followThe followinging are the trial balances extracted on 31 December 2008:
are the trial balances extracted on 31 December 2008: Head office Trial Balance
Head office Trial Balance Share capital (Authorized: 10000
Share capital (Authorized: 10000 Equity shares of Rs. 100 each): Equity shares of Rs. 100 each): Issued : 8000 Equity Shares Issued : 8000 Equity Shares Profit and Loss Account 1.1.08 Profit and Loss Account 1.1.08 Interim Dividend paid 1.1.08 Interim Dividend paid 1.1.08 General Reserve General Reserve Current Assets Current Assets Fixed assets Fixed assets
Debtors and Creditors Debtors and Creditors Profit for 2008 Profit for 2008 Cash balance Cash balance Rs. Rs. --30,000 30,000 --2,22,470 2,22,470 5,30,000 5,30,000 50,500 50,500 --62,730 62,730 Rs. Rs. --8,00,000 8,00,000 25,310 25,310 --1,00,000 1,00,000 --21,900 21,900 82,200 82,200
--Branch current Account
Branch current Account 1,33,7101,33,710 10,29,410 10,29,410
--10,29,410 10,29,410
Branch Trial Balance Branch Trial Balance Fixed Assets Fixed Assets Profit for 2008 Profit for 2008 Stock Stock
Debtors and Creditors Debtors and Creditors Cash Balance
Cash Balance
Head Office Current
Head Office Current AccountAccount
Rs. Rs. 95,000 95,000 --50,460 50,460 19,100 19,100 6,550 6,550 --1,71,110 1,71,110 Rs. Rs. --31,700 31,700 --10,400 10,400 --1,29,010 1,29,010 1,71,110 1,71,110
The difference between the balance of the current account in the two sets The difference between the balance of the current account in the two sets of books is accounted for
of books is accounted for as follows:as follows:
(a)Cash remitted by the Branch on 31 December 2008, but received by (a)Cash remitted by the Branch on 31 December 2008, but received by the head office on 1 Jan 2009
the head office on 1 Jan 2009 Rs. 3,000.Rs. 3,000.
(b) stock stolen in transit from head office and charged to the Branch by (b) stock stolen in transit from head office and charged to the Branch by the head office, but not credited to head office in the Branch books as the the head office, but not credited to head office in the Branch books as the branch manager declined to admit the liability (not covered by insurance) branch manager declined to admit the liability (not covered by insurance) Rs. 1,700.
Rs. 1,700.
Give the branch current account in the head office books after Give the branch current account in the head office books after incorporatin
incorporating brang branch Trial ch Trial Balance Balance through through journal. journal. Also pAlso prepare trepare thehe
Company’s Balance sheet as on 31 December 2008. Company’s Balance sheet as on 31 December 2008.
Q.32. Mum
Q.32. Mumbai H.O. hbai H.O. has a branch as a branch at Chennat Chennai. ai. The Ledger The Ledger balancesbalances of the branch for the year ended 31 March
of the branch for the year ended 31 March 2008 were follows:2008 were follows:
Interest received Interest received Purchases Purchases Sales Sales
Goods from H.O. Goods from H.O. Creditors Creditors Sundry expenses Sundry expenses Bank (Dr.) Bank (Dr.)
H.O. current Account H.O. current Account Machinery Machinery Stock (opening) Stock (opening) Debtors Debtors Rs. Rs. 25,000 25,000 90,000 90,000 3,00,000 3,00,000 1,40,000 1,40,000 12,000 12,000 4,000 4,000 33,000 33,000 2,20,000 2,20,000 1,00,000 1,00,000 1,50,000 1,50,000 40,000 40,000
The closing stock amounted to Rs. 70,000. The closing stock amounted to Rs. 70,000. You
You get the get the following following information information from the from the H.O.H.O.
(i)The head office sent goods to branch Rs. 10,000 on 30.3.08 which the (i)The head office sent goods to branch Rs. 10,000 on 30.3.08 which the branch received on 3.4.08.
branch received on 3.4.08.
(ii) Branch furniture account stood in the H.O. books at Rs. 8,000. (ii) Branch furniture account stood in the H.O. books at Rs. 8,000.
(iii) Branch Current Account in H.O. books had a debit balance of Rs. (iii) Branch Current Account in H.O. books had a debit balance of Rs. 2,30,000.
2,30,000.
Prepare a Trading and Profit and Loss Account in branch books after Prepare a Trading and Profit and Loss Account in branch books after depreciating furniture by 5% and machinery by 10%.
depreciating furniture by 5% and machinery by 10%. Also give Branch current account in H.O.
Also give Branch current account in H.O. books after posting incorporationbooks after posting incorporation entries to that account.
entries to that account.
Q.33. The following is the trial balance of Meerut branch as on 31 Q.33. The following is the trial balance of Meerut branch as on 31 December 2008:
December 2008:
Delhi Head Office Delhi Head Office Stock 1.1.08
Stock 1.1.08 Purchases Purchases
Goods received from H.O. Goods received from H.O. Sales
Sales
Good supplied to H.O. Good supplied to H.O. Salaries Salaries Debtors Debtors Creditors Creditors Rent Rent Office expenses Office expenses Cash at bank Cash at bank Furniture Furniture Depreciation on furniture Depreciation on furniture Debit Debit Rs. Rs. 3,240 3,240 6,000 6,000 97,800 97,800 19,000 19,000 --4,500 4,500 3,700 3,700 --1,960 1,960 1,470 1,470 1,780 1,780 6,000 6,000 400 400 1,45,850 1,45,850 Credit Credit Rs. Rs. --1,38,000 1,38,000 6,000 6,000 --1,850 1,850 --1,45,850 1,45,850
Stock at Branch on 31 December, 2008 was valued at Rs.
Stock at Branch on 31 December, 2008 was valued at Rs. 7,700.7,700.
Meerut Branch in the H.O. books on 31 December 2008 stood at Rs. Meerut Branch in the H.O. books on 31 December 2008 stood at Rs. 460(Debit). On 28 December 2008, the head office forwarded goods to 460(Debit). On 28 December 2008, the head office forwarded goods to the value of Rs. 3,700 to the branch where they were received on 3 Jan the value of Rs. 3,700 to the branch where they were received on 3 Jan 2009.
2009.
(i)Prepare Trading and Profit and Loss Account of Meerut Branch for the (i)Prepare Trading and Profit and Loss Account of Meerut Branch for the year ended 31 December 2008
(ii) Pass journal entries in the books of H.O. to incorporate the above (ii) Pass journal entries in the books of H.O. to incorporate the above mentioned trail balance.
mentioned trail balance.
(iii) Show Meerut Branch Account as it would be closed in H.O. Ledger. (iii) Show Meerut Branch Account as it would be closed in H.O. Ledger. Q.34. Paulmae of Kolkata has a branch in Mumbai which keeps its Q.34. Paulmae of Kolkata has a branch in Mumbai which keeps its own books. Summarized trail balances as at 31 December 2007 own books. Summarized trail balances as at 31 December 2007 are given below:
are given below:
Kolkata Kolkata Capital Capital Fixed Assets Fixed Assets
Current Assets and Liabilities Current Assets and Liabilities Profit and Loss Account
Profit and Loss Account
Balance on 1 January 2007 Balance on 1 January 2007 Profit during the year
Profit during the year
Mumbai branch account 1 January 2007 Mumbai branch account 1 January 2007 Remittances from branch
Remittances from branch Goods sent to branch at cost Goods sent to branch at cost
Debit(Rs.) Debit(Rs.) --14,00,000 14,00,000 8,80,000 8,80,000 --6,64,000 6,64,000 --56,000 56,000 30,00,000 30,00,000 Credit(Rs.) Credit(Rs.) 10,00,000 10,00,000 --4,90,000 4,90,000 --6,70,000 6,70,000 5,40,000 5,40,000 --3,00,000 3,00,000 --30,00,000 30,00,000 Mumbai Mumbai Fixed Assets Fixed Assets
Current Assets and Liabilities Current Assets and Liabilities
Head Office Account 1 January 2007 Head Office Account 1 January 2007 Remittances from branch
Remittances from branch Goods from head Office Goods from head Office
Profit and Loss Account 2007 Profit and Loss Account 2007
3,65,000 3,65,000 3,18,000 3,18,000 --3,20,000 3,20,000 --10,03,000 10,03,000 --1,73,000 1,73,000 6,64,000 6,64,000 --51,500 51,500 1,14,500 1,14,500 10,03,000 10,03,000
The branch remitted Rs. 20,000 cash to H.O. on 30 December 2007 and The branch remitted Rs. 20,000 cash to H.O. on 30 December 2007 and head office sent goods to the branch of Rs. 4,500(at cost) on the same head office sent goods to the branch of Rs. 4,500(at cost) on the same date.
date. Both Both are are in in transit.transit.
Write up the branch account in Head Office ledger, the Head Office in Write up the branch account in Head Office ledger, the Head Office in branch ledger.
branch ledger. You are also requYou are also required to preparired to prepare a summarized e a summarized a balancea balance sheet for the entire business.
sheet for the entire business.
Q.35. You are required to prepare the Trading and Profit and Loss Q.35. You are required to prepare the Trading and Profit and Loss Account and consolidated Balance sheet of Eve. Ltd., in Kolkata Account and consolidated Balance sheet of Eve. Ltd., in Kolkata and its
and its branch at branch at Delhi. Delhi. Give journal Give journal entries for entries for incorporation oincorporation of f Delhi Branch accounts in the
Delhi Branch accounts in the Head Office.Head Office. The Trial balance as on
H.O. H.O. Dr. Dr. Rs. Rs. Branch Branch Dr. Dr. Rs. Rs. H.O. H.O. Cr. Cr. Rs. Rs. Branch Branch Cr. Cr. Rs. Rs. Manufacturing expenses Manufacturing expenses Salaries Salaries Wages Wages Cash in hand Cash in hand Purchases Purchases Capital Capital
Goods Received from H.O. Goods Received from H.O. Rent Rent General expenses General expenses Sales Sales
Goods sent to branch Goods sent to branch Purchase returns Purchase returns Opening stock Opening stock Discount earned Discount earned Machinery-H.O. Machinery-H.O. Machinery-Branch Machinery-Branch Furniture-H.O. Furniture-H.O. Furniture-Branch Furniture-Branch Debtors Debtors Creditors Creditors H.O. account H.O. account Branch account Branch account 30,000 30,000 30,000 30,000 1,00,000 1,00,000 10,000 10,000 1,50,000 1,50,000 --8,000 8,000 20,000 20,000 --50,000 50,000 --1,50,000 1,50,000 50,000 50,000 7,000 7,000 3,000 3,000 40,000 40,000 --54,000 54,000 7,02,000 7,02,000 10,000 10,000 10,000 10,000 40,000 40,000 2,000 2,000 80,000 80,000 --15,000 15,000 4,000 4,000 5,000 5,000 --30,000 30,000 --15,000 15,000 --2,11,000 2,11,000 2,00,000 2,00,000 --4,50,000 4,50,000 15,000 15,000 5,000 5,000 --2,000 2,000 --30,000 30,000 --7,02,000 7,02,000 --1,50,000 1,50,000 --1,000 1,000 --1,000 1,000 5,000 5,000 54,000 54,000 --2,11,000 2,11,000
Closing stock at Head Office was Rs. 40,000 and at Branch Rs. 30,000. Closing stock at Head Office was Rs. 40,000 and at Branch Rs. 30,000. Depreciation is to be provided on Machinery @ 20 per cent and Furniture Depreciation is to be provided on Machinery @ 20 per cent and Furniture @ 15 percent.
@ 15 percent. Rent OutstaRent Outstanding is Rs. nding is Rs. 500 (for bran500 (for branch).ch).
Q.36.Sachin established a retail business in Delhi several years Q.36.Sachin established a retail business in Delhi several years ago and has since opened branch shops at Mumbai, Kolkata and ago and has since opened branch shops at Mumbai, Kolkata and Chennai. All the purchasing and administration is done at the Chennai. All the purchasing and administration is done at the Head
Head office. office. Branches Branches are also are also allowed allowed to puto purchase rchase locally locally inin special circum
special circumstances. stances. Branches sell Branches sell both for both for cash and cash and on crediton credit terms, but all invoices for credit sales are invoiced from Delhi and terms, but all invoices for credit sales are invoiced from Delhi and payments from credit terms, but all invoices for credit sales are payments from credit terms, but all invoices for credit sales are invoiced from Delhi and payments from credit customers received invoiced from Delhi and payments from credit customers received there.
cost price.
cost price. The folloThe following relatewing relates to s to the Bomthe Bombay Brancbay Branch for h for thethe first six months of 2006:
first six months of 2006:
Opening stock of goods at branch
Opening stock of goods at branch (cost price)(cost price) Opening debtors
Opening debtors
Goods received by branch at selling price Goods received by branch at selling price Credit sales
Credit sales Cash sales Cash sales
Transfer from other branches to Mumbai branch
Transfer from other branches to Mumbai branch at selling priceat selling price Transfer to other branches from Mumbai at selling price
Transfer to other branches from Mumbai at selling price Goods returned to H.O. at selling price
Goods returned to H.O. at selling price Cash from debtors received at H.O. Cash from debtors received at H.O. Bad debts written off
Bad debts written off
Goods returned by credit customers to branch Goods returned by credit customers to branch Goods returned by credit customers to H.O. Goods returned by credit customers to H.O. Goods purchased by Mumbai branch from local Goods purchased by Mumbai branch from local Suppliers(cost)
Suppliers(cost)
Expenses at the branch Expenses at the branch Closing stock at branch Closing stock at branch
From H.O. at selling price From H.O. at selling price From local purchases
From local purchases
Rs. Rs. 28,000 28,000 9,000 9,000 1,80,000 1,80,000 60,000 60,000 1,02,000 1,02,000 12,000 12,000 21,000 21,000 6,000 6,000 53,000 53,000 2,000 2,000 2,400 2,400 1,200 1,200 15,000 15,000 7,500 7,500 45,000 45,000 3,000 3,000 Additional information: Additional information: (i)Goods amou
(i)Goods amounting to Rs. 6,000 at nting to Rs. 6,000 at cost to H.O. were in transit.cost to H.O. were in transit.
(ii) Branch had on 1 January 2006 furniture and other equipment at a (ii) Branch had on 1 January 2006 furniture and other equipment at a book value of Rs. 7,500.
book value of Rs. 7,500.
Depreciation at 10% p.a. is to be provided on this
Depreciation at 10% p.a. is to be provided on this item.item.
(iii) Goods purchased locally were sold at 25% profit on sale price. (iii) Goods purchased locally were sold at 25% profit on sale price.
Prepare (i) Branch stock account, (ii) branch debtors account and (iii) Prepare (i) Branch stock account, (ii) branch debtors account and (iii) Mumbai branch account.
Mumbai branch account. Q.37.Banu
Q.37.Banu of Kaof Kanpur has npur has a branch a branch in Ambin Ambala. ala. Goods Goods sent sent toto branch are invoiced at selling price i.e., cost plus 33-1/
branch are invoiced at selling price i.e., cost plus 33-1/33%. From%. From the following particulars, you are required to prepare the Branch the following particulars, you are required to prepare the Branch Stock Account and Branch adjustment account as they would Stock Account and Branch adjustment account as they would appear in the book of head office:
appear in the book of head office:
Stock on 01-04-2005 Stock on 01-04-2005 Stock on 31-03-2006 Stock on 31-03-2006
Goods sent to Ambala during the year at invoice price Goods sent to Ambala during the year at invoice price
Rs. Rs. 15,000 15,000 12,000 12,000 1,00,000 1,00,000
