Success Coaching Centre
Sec-4 & sec-14
Ph.9782016302, 9672269750, 9784094650
Branch Accounts
Q.No.-1 Head office passes adjustment entry at the of each month to adjust the position arising out of inter-branch
transactions during the month. From the following inter-branch transactions in January 1996, make the entry in the
books of Head office:
(a) Bombay Branch
(1) Received Goods: Rs. 6,000 from Calcutta Branch, Rs. 4,000 from Patna Branch.
(2) Sent goods to: Rs. 10,000 to Patna Rs. 8,000 to Calcutta.
(3) Received B/R: Rs. 6,000 from Patna.
(4) Sent Acceptance: Rs. 4,000 to Calcutta, Rs. 2,000 to Patna.
(b) Madras Branch (Apart from the above)
(5) Received Goods: Rs. 10,000 from Calcutta, Rs. 4,000 from Bombay.
(6) Cash Sent Rs. 2,000 to Calcutta, Rs. 6,000 to Bombay.
(c) Calcutta Branch (Apart from the above)
(7) Sent Goods to Patna: 6,000
(8) Paid B/P: Rs. 4,000 to Patna, Rs. 4,000 cash to Patna.
Q.No.-2 Show adjustment Journal entry in the books of Head office at the end of April, 2003 for incorporation of interbranch transactions assuming that only Head Office maintains different branch accounts in its books:
A. Delhi Branch:
(1) Received goods from Mumbai – Rs. 35,000 and Rs. 15,000 from Kolkata.
(2) Sent goods to Chennai – Rs. 25,000, Kolkata- Rs. 20,000.
(3) Bills Receivable received - Rs. 20,000 from Chennai.
(4) Acceptances sent to – Mumbai- Rs. 25,000, Kolkata – Rs. 10,000
B. Mumbai Branch (apart from the above):
(5) Received goods from Kolkata - Rs. 15,000, Delhi- Rs. 20,000.
(6) Cash sent to Delhi – Rs. 15,000, Kolkata- Rs. 7,000
C. Chennai Branch (apart from the above):
(7) Received goods from Kolkata - Rs. 30,000
(8) Accepted and Cash sent to Kolkata – Rs. 20,000 and Rs. 10,000 respectively.
D. Kolkata Branch (apart from the above):
(9) Sent goods to Chennai –Rs. 35,000.
(10) Paid cash to Chennai- Rs. 15,000
(11) Acceptance sent to Chennai- Rs. 15,000.
All working should from part of the answer.
Q.No.-3 Give journal entries in the books of Branch A to rectify or adjust the following :
(i) Head office expenses Rs. 3,500 allocated to the branch, but not recorded in the Branch Books.
(ii) Depreciation of branch assets, whose accounts are kept by the head office not provided earlier for Rs. 1,500.
(iii) Branch paid Rs. 2,000 as salary to a H.O. Inspector, but the amount paid has been debited by the Branch to Salaries
account.
(iv) H.O. collected Rs. 10,000 directly from a customer on behalf of the Branch, but no intimation to this effect has
been received by the Branch.
(v) A remittance of Rs. 15,000 sent by the Branch has not yet been received by the Head Office.
(vi) Branch A incurred advertisement expenses of Rs. 3,000 on behalf of Branch B.
Q.No.-4 Concept & Co., with its Head Office at Mumbai has a branch at Nagpur. Goods are invoiced to the Branch at
cost plus 33⅓%. The following information is given in respect of the branch for the year ended 31st March, 2006:
1
AVINASH JAIN
Success Coaching Centre
Sec-4 & sec-14
Ph.9782016302, 9672269750, 9784094650
Goods sent to Branch (Invoice price)
Stock at Branch on 1.4.2005 (Invoice price)
Cash sales
Return of goods by customers to the Branch
Branch expenses (paid in cash)
Branch debtors balance on 1.4.2005
Discount allowed
Bad debts
Collection from debtors
Branch debtors cheques returned dishonored
Stock at Branch on 31.3.2006 (Invoice price)
Branch debtors balance on 31.3.2006
4,80,000
24,000
1,80,000
6,000
53,500
30,000
1,000
1,500
2,70,000
5,000
48,000
36,500
Prepare, under the Stock and Debtors system, the following Ledger Accounts in the books of the Head Office:
(i) Nagpur Branch Stock Account
(ii) Nagpur Branch Debtors Account
(iii) Nagpur Branch Adjustment Account. Also compute shortage of Stock at Branch, if any.
Q.No.-5 Red and Co. of Mumbai started a branch at Bangalore on 1.4.2006 to which goods were sent at 20% above cost.
The branch makes both cash sales and credit sales.
Branch expenses are met from branch cash and balance money remitted to H.O. The branch does not maintain double
entry books of account and necessary accounts relating to branch are maintained in H.O. Following further details are
given for the year ending on 31.3.2007:
Rs.
Cost of goods sent to Branch
1,00,000
Goods received by branch till 31.3.2007 at Invoice price
1,08,000
Credit sales for the year
1,16,000
Closing debtors on 31.3.2007
41,600
Bad debts written during the year
400
Cash remitted to H.O.
86,000
Closing cash on hand at branch on 31.3.1997
4,000
Cash remitted by H.O. to branch during the year
6,000
Closing stock in hand at branch at invoice price
12,000
Expenses incurred at branch
24,000
Draw up the necessary Ledger Accounts like Branch Debtors Account, Branch Stock Account, Goods sent to Branch
Account, Branch Cash Account, Branch Expenses Account and Branch Adjustment A/c for ascertaining gross profit and
branch profit & Loss A/c for ascertaining Branch profit.
Q.No.-6 Goods worth Rs. 50,000 sent by head office but the branch has received till the closing date goods only Rs.
40,000. Give journal entry in the books of H.O. and branch for goods in transit.
Q.No.-7 Shyam General Stores of Delhi has branch at Agra which is supplied with all goods from the head office at cost.
The branch Manager keeps his own keeps his own sales ledgers and deposits daily in local bank all his receipt from cash
and credit sales in the head office account. The branch expenses are remitted regularly by cheques from the H.O. on the
imprest system.
From the particulars given below, prepare Agra Branch account in the books of Head office.
Rs.
Branch Stock on 1.4.2004
14,400
Branch furniture on 1.4.2004
20,000
Branch debtors on 1.4.2004
24,600
Petty cash with the branch on 1.4.2004
400
Transaction during the year:
Goods supplied to branch
44,000
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AVINASH JAIN
Success Coaching Centre
Sec-4 & sec-14
Ph.9782016302, 9672269750, 9784094650
Cash sales
Credit sales
Cash received from debtors
Returns Inward
Bad debts of the branch
Rent, Rates & Taxes
Wages and salaries
Petty expenses
Branch Stock on 31.3.2005
Petty cash with the branch on 31.3.2005
Depreciation on branch furniture is to be charged @ 10% p.a.
24,000
48,000
45,000
1,000
1,200
7,000
7,600
600
22,400
400
Q.No.-8 M/s Rama Krishna, Ajmer started two branches at Bhilwara and Alwar on 1st April 2005. All goods sold at the
branches are received from the H.O. invoiced at cost plus 25%. All expenses relating to the branches are paid to the H.O.
All cash collections are remitted daily to the H.O. by branches. The following particulars relating to the half year ended
30th Sept., 2005 have been extracted from the weekly statements sent by the branches:
Bhilwara
Alwar
Rs.
Rs.
Credit sales
1, 25,200
1, 10,000
Cash sales
78,600
85,200
Sales returns
2,300
1,200
Sundry debtors
34,500
23,600
Rent and Rates
3,200
4,500
Bad debts
6,000
Salaries
16,000
18,000
General expenses
2,600
1,500
Goods received from H.O.
1,50,000
1,25,000
Advertisement
7,500
5,200
th
Stock on 30 September 2005
45,000
35,000
You are required to prepare the Branch Accounts as they would appear in the books of the head office, showing the
profit and Loss for the period.
Q.No.-9 M/s Bansal distributors Bangalore had a sales branch in Nasik and charged all goods sent to the branch at cost+
33⅓%. It is arranged that all cash received by the branch is to be paid daily to the H.O. bank a/c. From the following
prepare Nasik Branch account for the year 2002-03, 2003-04 and 2004-05.
2002-03
2003-04
2004-05
Rs.
Rs.
Rs.
Stock at the beginning
12,000
Goods sent to branch less returns
80,000
60,000
40,000
Opening balance of debtors
1,500
Cash sent to H.O.
1,24,000
1,00,000
60,000
Rent
3,200
2,000
2,000
Salaries, wages etc.
4,800
3,000
Closing Balance of Debtors
1,600
6,000
4,000
Stock at the end
14,800
3,000
2,000
Q.No.-10 Good Luck Traders, Patna has a branch at Kanpur. The goods are sent to the Branch by the Head Office at cost
price. The branch sells goods for cash as well as on credit and deposits all cash received daily to the credit of the H.O. A/c
in a local bank. All Branch expenses are paid by the H.O. by cheque.
From the following details, prepare Branch Stock Account, goods sent to branch account, Branch profit and loss account,
Branch Debtors A/c, and Branch expenses account after passing the necessary journal entries in the books of the H.O.
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AVINASH JAIN
Success Coaching Centre
Sec-4 & sec-14
Ph.9782016302, 9672269750, 9784094650
Opening Branch Stock
Closing Branch Stock
Opening Branch Debtors
Goods from Head Office
Total Sales
Cash sales
Goods return to H.O.
Rs.
75,000
69,500
1, 31,000
2, 54,000
4, 67,500
1, 67,500
3,500
Cash received from debtors
Goods returned by debtors
Allowances to Debtors
Discount to Debtors
Bad Debts
Rent and Rates
Wages and Salaries
General Charges
Rs.
2, 46,000
2,900
1,600
12,000
3,000
9,000
30,000
6,500
Q.No.-11 Indian Textile Mills Ltd., had two branches at Agra and Kanpur. Goods are invoiced to branches at selling price
which is Cost Plus 50%. Branches remit all cash received to the Head Office and all expenses are met by H.O. From the
following particulars prepare necessary accounts on the Stock and Debtors System, to show the profit earned at the
branches.
Agra
Kanpur
Rs.
Rs.
Balance at the beginning:
Stock (Invoice price)
9,300
15,600
Debtors
6,800
8,700
Goods invoiced to Branch (cost price)
34,000
36,000
Sales at Branch:
Cash sales
25,010
35,000
Credit sales
31,000
30,100
Cash collected from debtors
30,400
29,800
Goods returned by debtors
1,200
1,500
Goods return by branch to H.O.
1,500
Goods transferred from Kanpur to Agra
2,100
2,100
Surplus in stock
300
Shortage of stock
450
Discount allowed to customers
200
350
Expenses at branches
5,400
6,700
Q.No.-12 The Madras Branch of Hindustan Metal Co. Ltd. Kolkata sent the following Trial Balance to its Head office on
31st March 2005.
Trial Balance of Madras Branch as on 31st March 2005
Particulars
Dr.
Cr.
Amount Rs. Amount Rs.
Opening Stock
22,500
Purchases
6,69,500
Goods from H.O.
3,40,000
Goods returned to H.O.
22,500
Sales
11,27,500
Wages and salaries
55,000
Bad debts
7,500
General expenses
40,000
Rent and rates
5,000
Cash in hand
62,500
Sundry debtors
1,20,000
Furniture and Fixtures
19,000
Sundry Creditors
86,000
Head Office Account
1,05,000
13,41,000
13,41,000
4
AVINASH JAIN
Success Coaching Centre
Sec-4 & sec-14
Ph.9782016302, 9672269750, 9784094650
The closing Stock with the Branch was worth Rs. 52,000. The H.O. incorporates and opens ledger accounts for each item
of Branch Trial balance. Pass incorporation entries in the books of H.O. and post them into ledger. Also give closing
entries and prepare Branch Trading and profit and loss Account for the year ended 31st march, 2005. How would
Chennai Branch a/c appear on 1st April 2005?
Q.No. 13 The Sikar Branch of Siddhi Cement Works has sent the following Trial Balance on 31st March 2005 to Head
Office.
Sikar Branch
Trial Balance As on 31st March, 2005
Particulars
Dr.
Cr.
Amount Rs. Amount Rs.
Opening Stock
12,000
Purchases
35,600
Goods from H.O.
18,000
Sales
76,000
Goods returned to H.O.
12,000
Rent
1950
Bad debts
940
Salaries
3,000
Cash in hand
3,560
Debtors
13,400
Furniture
4,000
Creditors
1,200
Head Office Account
3,250
92,450
92,450
The closing stock with the Branch valued at Rs. 5,500. The Branch Account in the books of Head Office as on 31 st March,
2005 stood at Rs. 7,450 (debit balance). The Head Office sent goods worth Rs. 2,200 to Branch on 29 th March 2005 which
was received by the Branch on 5th April, 2005. Similarly a cash remittance of Rs. 2,000 by the Branch on 26h March, 2005
was received by the Head Office on 1st April, 2005.
You are required to give journal entries necessary to reconcile the balances of Head Office a/c in Branch books and
Branch a/c in Head Office books and to incorporate the above trial balance items in the books of Head Office. Also give
Sikar Branch a/c and Memorandum Reconciliation a/c in Head Office Books.
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AVINASH JAIN