Chapter # 7

ADVANCED FINANCIAL ACCOUNTING
B.COM 2
CHAPTER # 7
BRANCH ACCOUNT
Rooh Ullah (M.Com)

0333-87 86 389
THE STANDARD GIRLS COLLEGE

Advanced Financial Accounting Page |1
Branch Account
Date Particulars Rs. Date Particulars Rs.
Balance b/d (Opening Assets) Balance b/d (Op. Liab.)
Stock Creditors
Debtors Outstanding expenses
Cash Bank A/c
Prepaid expenses Cash Sales
Furniture Collection from debtors
Goods sent to Branch Direct Payment by deb.
Bank A/c (Cash sent to branch) Goods Sent to Branch (return)
Salaries Goods in Transit
Rent Abnormal loss
Insurance Balance c/d (Clos Assets)
Petty expenses Stock
Balance c/d (Closing Liab.) Debtors
Outstanding expenses Cash
Creditors Prepaid expenses
General profit & loss A/c Furniture
Following accounts will not be recorded in Branch Account
Normal Loss, Pilferage, Credit Sales, Bad Debts, Return by customers (Sales Return),
Discount allowed to Customers, Branch expenses paid by branch, Asset Purchased by branch
Memorandum Branch Debtors A/C

Memorandum Branch Debtors A/C will be prepared if any two or three Accounts from the
following are given
1- Opening Debtors
2- Closing Debtors
3- Collection from Debtors / Direct Payment by customers
4- Credit Sales
Memorandum Branch Debtors A/C
Particulars Rs. Particulars Rs.

Opening debtors Cash (Coll. From customer +
Credit Sales Direct payment by customer)
Bad Debts
Sales return / Ret. From customers
Discount Allowed
Allowances to Customer
Closing debtors
Roohullah (M.Com) 0333-87 86 389 Lecturer: The Standard College

Petty Cash Account

Petty Cash Account will be prepared if any two or three of following accounts are given.
1- Petty cash opening

2- Petty cash closing
3- Petty expenses paid by branch
4- Cash sent by H.O. for petty expense
Petty Cash Account

Petty cash opening balance Petty expenses paid by branch
Cash sent by H.O for petty exp. Petty cash closing balance
Closing Stock
If following tow accounts are given the closing stock will be calculated
1. Goods sent to branch

2. Sales (Cash sales, Credit Sales)
Branch Cash Account

Cash sent to H.O. or Cash remitted to H.O.
1. Cash Sales
2. Collection from debtors
Branch Cash Account

Opening cash balance Bank (Cash sent to H.O)
Cash sales Petty expenses paid by bran.
Debtors (Collection) Asset purchased by bran.
Closing cash balance
Unloading Entries
If Goods sent to branch on Invoice price or selling price the unloading entries will be
passed.
1- Opening Stock
2- Closing Stock
3- Goods sent to Branch
4- Goods return to Branch
5- Abnormal Loss
6- Goods in transit

Journal
Date Details L/F Rs. Rs.

Branch A/c……………..Dr.
Branch Stock A/c……….. Cr.
Branch Debtors A/c………Cr.
Branch Petty cash A/c……Cr.
(Opening assets transferred to branch)
Creditors…………….. Dr.
Outstanding expenses...Dr.
Branch A/c……………… Cr.
(Opening liab. Transferred to branch)
Branch A/c………… Dr.
Goods sent to Branch A/c… Cr.
(Goods sent to branch)
Goods sent to branch….. Dr.
Branch A/c……………… Cr,
(Goods returned by branch)
Daska Brach A/c…. Dr.
Bank A/c…………… Dr.
(Cash sent to branch to meet expenses)
Bank……….. Dr.
Daska Branch A/c….. Dr.
(Cash received from branch)
Abnormal loss
Branch A/c
(Loss of stock with branch)
Branch Stock A/c
Branch Petty cash A/c
Branch Debtors A/c
Branch A/c
(Closing assets transferred from branch)
Creditors
Outstanding expenses
Branch A/c
(Closing liab. Transf. from branch)
Daska Branch A/c
General Profit & Loss A/c
(Profit transferred to general Profit &
loss A/c)

1. From the following information relating to the Lahore branch for the year ending 31st
march 1994 prepare the branch account in the books of head office.
Opening balances on 1-4-93 Rs Cheque sent to branch Rs

Stock at branch 37500 Salaries 22500
Debtors at branch 75000 Rent & taxes 3750
Petty cash at branch 750 Petty cash 2750
Cash sales 150000 Closing balances on 31-3-94
Goods sent to branch 630000 Stock at branch 62500
Cash received from debtors 525000 Debtors at branch 120000
Goods returned by branch 5000 Petty cash at branch 500
Credit sales 570000
IN THE BOOKS OF HEAD OFFICE

LAHORE BRANCH ACCOUNT
FOR THE YEAR ENDING 31ST MARCH 1994
Date Reference Rs. Date Reference Rs.
1993 Balance b/d 1994
Apr. 1 Stock 37,500 Mar. 31 Goods sent to Branch A/c (Returns) 5,000
Debtors 75,000 Bank A/c
Petty cash 750 “ Cash sales 1,50,000
1994 Goods sent to Branch A/c 630,000 Cash received from Debtors 5,25,000
Mar. 31 Bank A/c Balance c/d
” Salaries 22,500 Stock 62,500
Rent & Taxes 3,750 “ Debtors 120,000
Petty cash 2,750 Petty cash 500
“ General P & L A/c 90,750
8,63,000 8,63,000
2. From the following particulars relating to Lahore branch for the year ending 31st December
2010, prepare Lahore branch account in the books of Head Office.
Particulars Rs.
Balance on 1-1-2010
Stock at branch 8,900
Branch debtors 4,700
Petty cash at branch 20
Prepaid insurance 100
Salaries outstanding 300
Goods sent to branch during the year 28,400
Cash sales during the year 15,800
Credit sales during the year 40,400
Cash paid by debtors direct to H.O. 37,900
Cash sent to branch for expenses 9,000
Goods returned by branch 800
Balance on 31-12-2010

Solution
BOOKS OF HEAD OFFICE
LAHORE BRANCH ACCOUNT
FOR THE YEAR ENDING 31st DECEMBER 2010
1-1-10 Balance b/d 31-12-10 Balance b/d
Stock 8,900 Outstanding salaries 300
Debtors 4,700 “ Goods sent to branch
Petty cash 20 (Return) 800
31-12-10 Prepaid insurance 100 Bank A/c
“ Goods sent to Branch 28,400 “ Cash sales 15,800
Bank A/c - Expenses 9,000 Direct payment by cus. 37,900
General P & L A/c 16,310 Closing stock
Stock 5,400
Debtors 7,200
Petty cash 30
67,430 67,430
3. From the following particulars relating to Gujrat Branch for the year ending 31-12-2010,
prepare Branch Account in the books of head office and show how the relevant items will
appear in the head office Balance Sheet as on that date.
Balances on 1-1-2010 Rs. Rs.

Stock 40,000 Cash paid by debtors direct to head office 22000
Debtors 14,000 Discount allowed 1100
Petty cash 1,500 Cash sent to branch for expenses:
Furniture 12,000 Rent Rs, 12,000, Salaries Rs. 5,400, Petty cash
Prepaid fire insurance 1,150 Rs. 4,000
Outstanding salaries 2,100 Insurance (from 1-4-2010 to 31-3-2011) 1600
Goods sent to branch 280,000 Goods returned by the branch 4000
Cash sales 330,000 Goods retuned by the debtors 7000
Credit sales 183,000 Stock on 31-12-2010 38000
Cash received from debtors 135,000 Petty expenses paid by the branch 2850
Provide depreciation on furniture @ 10% p.a.
Loss of stock by the fire 4800
Total months = 1-Apr-2010 to 31-March-2011 = 12 months

Prepaid = 31-Dec.-2010 – 31-March-2011 = 3 months
Prepaid insurance = Rs. 1,600 × 3/12 = Rs. 400

Solution
GUJRAT BRANCH ACCOUNT
2010 2010 Balance b/d
Jan. 1 Balance b/d Jan. 1 Outstanding salaries 2,100
Stock 40,000 Dec. 31 Bank A/c
Debtors 14,000 Cash sales 330,000
Petty cash 1,500 Collection from Debtors 135,000
Furniture 12,000 Direct payment to H.O 22,000
Prepaid fire insurance 1,150 “ Goods sent to Branch (return) 4,000
Dec. 31 Goods sent to Branch 280,000 Loss of stock by fire 4,800
“ Bank A/c “ Balance c/d
Rent 12,000 “ Stock 38,000
Salaries 5,400 Debtors 31,900
Petty cash 4,000 Furniture (12,000 – 1,200) 10,800
Insurance 1,600 Petty cash 2,650
“ General P & L A/c 210,000 Prepaid fire insurance 400
581,650 581,650
MEMORANDUM DEBTORS ACCOUNT

Opening debtors 14,000 Cash A/c (135,000 + 22,000) 157,000
Credit sales 183,000 Discount allowed 1,100
Sales return 7,000
Closing debtors 31,900
197,000 197,000
PETTY CASH ACCOUNT

Opening petty cash 1,500 Petty exp. Paid by branch 2,850
Cash sent by H.O for petty exp. 4,000 Closing petty cash 2,650
5,500 5,500
BALANCE SHEET OF HEAD OFFICE

As at 31st December 2010
Liabilities Rs. Assets Rs.
Branch Profit 210,000 Branch Furniture 10,800
Branch stock 38,000
Branch Debtors 31,900
Branch Petty cash 2,650
Branch Prepaid fire Insurance 400

4. From the following particulars relating to Daska Branch for the year ending 31st December,
2010, pass the necessary journal entries & branch account in the Head office books. Goods
sent to the branch are invoiced at cost price and the branch makes both cash and credit sales:
Particulars Rs.
Stock at Wazirabad Branch on 1st January 2010 3,560
Branch debtors on 1st January 2010 1,880
Petty cash at Branch on 1st January 2010 80
Goods sent to Branch during the year 11,360
Cash received from Debtors 15,160
Cash sent to Branch:
Rent 800
Salaries 2,400
For expenses – petty expenses 400
Goods returned by Branch 320
Stock at Branch on 31st December 2010 2,160
Petty cash at branch on December 2010 120
Branch debtors on December 2010 2,880
HEAD OFFICE BOOK

JOURNAL
Date Details L/F Rs. Rs.
Daska Branch A/c 5,520
Branch Stock A/c 3,560
Branch Debtors A/c 1,880
Branch Petty cash A/c 80
(Opening assets transferred to branch)
Goods sent to Branch A/c 11,360
(Goods sent to branch)
Bank A/c (6,320 + 15,160) 21,480
(Cash received from branch)
Daska Brach A/c 3,600
Bank A/c 3,600
(Cash sent to branch to meet expenses)
Goods sent to Branch A/c 320
Daska Branch A/c 320
(Goods returned by branch)
Branch Stock A/c 2,160
Branch Petty cash A/c 120
Branch Debtors A/c 2,880
(Closing assets transferred from branch)
General Profit & Loss A/c 6,480
(Profit transferred to general Profit & loss
A/c)


DASKA BRANCH ACCOUNT
FOR THE YEAR ENDING 31ST DECEMBER 2010
Jan. 1 Stock A/c 3,560 Dec. 31 Bank A/c
Debtors A/c 1,880 Sales 6,320
Petty cash A/c 80 Debtors 15,160
Dec. 31 Goods sent to branch 11,360 “ Goods sent to branch (Rent) 320
“ Bank A/c “ Balance c/d
Rent 800 Stock
Salaries 2,400 Debtors 2,160
Petty expenses 400 Petty cash 2,880
General P & L A/c 6,480 120
26,960 26,960
5. From the following details regarding to Sialkot Branch, prepare a Branch Account in
respect of the year 2010:

Stock on 1-1-2010 12,000 Returns to head office 4,800
Stock on 31-12-2010 9,600 Bad debts 600
Petty cash 1-1-2010 600 Discount allowed 310
Debtors on 1-1-2010 10,000 Petty expenses paid by branch 700
Debtors on 31-12-2010 11,500 Returns from customers 3,000
Goods sent to branch during 2010 42,000 Expenses paid by head office:
Cash sales 25,800 Salaries and wages 8,400
Credit sales 36,000 Rent (from 1-1-2010 to 31-3-2011) 5,250
Normal loss 2,000 Cash sent for petty expense by H.O 800
Solution
SIALKOT BRANCH ACCOUNT
2010 2010
Jan. 1 Balance b/d Dec. 31 Goods sent to branch
Stock 12,000 “ (return) 4,800
Debtors 10,000 Bank A/c
Dec. 31 Petty cash 600 Cash sales 25,800
“ Goods sent to Brach 42,000 “ Cash from Debtors 30,590
Bank A/c Balance c/d
Salaries & Wages 8,400 Stock 9,600
Rent 5,250 Debtors 11,500
“ Petty expenses 800 Petty cash 700
General P & L A/c 4,990 Prepaid rent 1,050
84,040 84,040

MEMORANDUM BRANCH DEBTORS ACCOUNT

Reference Rs. Reference Rs.
Opening debtors 10,000 Bad debts 600
Credit sales 36,000 Discount allowed 310
Returns inwards 3,000
Cash (collection from debtors) 30,590
Closing debtors 11,500
46,000 46,000
PETTY CASH ACCOUNT

Opening petty cash 600 Petty expenses paid by branch 700
Cash sent by H.O for petty exp. 800 Closing petty cash 700
1400 1400
Total months = 1-Jan.-2010 to 31-Mar-2011 = 15 months

Prepaid = 31-Dec-2010 to 31-March-2011 = 3 month
Prepaid rent = 5,250 × 3/15 = Rs. 1,050
6. From the following particulars, prepare Branch Account showing the profit or loss of the
branch for the year ended 31-12-2010 (all figures are in rupees)

Opening stock at the branch 30,000 Expenses met by head office
Goods sent to branch 90,000 Salaries 10,000
Cash sales 1,20,000 Other expenses 4,000
Closing stock could not be ascertained, but it is known that the branch usually sells at cost
plus 20%. The branch manager is entitled to a commission of 5% on the profit of the branch
before charging such commission.
IN THE BOOKS OF THE HEAD OFFICE

BRANCH ACCOUNT
Date References Rs. Date References Rs.
Jan. 1 Stock 30,000 Dec. 31 Bank A/c
Dec. 31 Goods sent to Branch 90,000 Cash sales 120,000
Bank A/c “ Balance c/d
“ Salaries 10,000 Stock 20,000
Other expenses 4,000
“ Balance b/d
Manager’s commiss. 300
General P & L A/c 5,700
140,000 140,000
CGS = Opening stock + Goods sent to branch – Closing stock

100,000 = 30,000 + 90,000 – Closing stock
Closing stock = 30,000 + 90,000 – 100,000 = 20,000

Advanced Financial Accounting P a g e | 10
CGS = Sales – Gross profit

CGS = 120,000 – (120,000 × 20/120) = 120,000 – 20,000 = 100,000
Manager’s commission = Net profit × 5% = 6,000 × 5% = 300
Net profit = 140,000 – 30,000 – 90,000 – 10,000 – 4,000 = 6,000
7. A Company with its head office at Islamabad has a branch at Multan. The branch receives
all goods from head office, who also remits cash for all expenses. Sales are made by the
branch on credit as well as for cash.
Total sales by the branch for the year ending 31-3-2010 amounted to Rs. 5,60,000 out of
which 20% is cash sales. The following further information is relevant:
1-4-2009: Stock – Rs. 25,000; Debtors – Rs. 60,000; Petty cash – Rs. 120
Expenses paid by the head office: Salaries – Rs. 36,000; Rent – Rs. 12,000;
Petty expenses paid by branch 5,600. All sales are made by the branch at cost plus 25%
You are required to prepare the Multan Branch Account in the books of the head office for
the year ended 31st March 2010.
MULTAN BRANCH ACCOUNT
2009 2010
Apr. 1 Balance b/d Mar. 31 Bank A/c
Stock 25,000 Cash sales 112,000
Debtors 60,000 Debtors 460,000
Petty cash 120 “ Balance c/d
2010 Stock 36,000
Mar. 31 Goods sent to Branch 459,000 Debtors 48,000
“ Bank A/c Petty cash 180
Salaries 36,000
Rent 12,000
Petty expenses 5,600
“ General P & L A/c 58,400
656,180 656,180
Cash & Credit Sales

Total sales 560,000
Less: Cash sales (560,000 × 20%) 112,000
Credit sales 448,000
Goods sent to Branch

Cost of goods sold = Opening stock + Goods sent to Branch – Closing stock
448,000 = 25,000 + Goods sent to Branch – 36,000
448,000 – 25,000 + 36,000 = Goods sent to Branch
Goods sent to Branch = 459,000
Cost of goods sold = Sales – Gross profit = 560,000 – (560,000 × 25/125)

= 560,000 – 112,000 = 448,000

8. The head office of a company invoice goods to its Jehlum Branch a cost, who also
purchases goods independently from local parties for which payments are made by the head
office. All the cash collected by Branch is banked on the same day to the credit of the head
office and all expenses are directly paid by the head office except for a Petty Cash Account
maintained by the branch for which periodical transfers are made from the head office.
From the following particulars, show the Branch Account as maintained in the head office
books, reflecting the branch profit for the year ending 31-12-2010

Imprest Cash 1-1-2010 2,000 Return from Customers 3,000
Imprest Cash 31-12-2010 1,850 Goods sent to Branch from H.O 50,000
Sundry Debtors on 1-1-2010 25,000 Transfer from H.O for petty cash expenses 2,500
Stock on 1-1-2010 Bad debts 1,000
Transferred from H.O 20,000 Discount to customers 2,000
Directly purchased by Branch 16,000 Cash received from customers 1,25,000
Shortage of stock 4,000 Branch expenses 30,000
Cash sales 45,000 Goods costing Rs. 600 were destroyed due
Credit sales 1,30,000 to fire and a sum of Rs. 500 received from
Direct purchases 45,000 the Insurance Co.
Stock on 31-12-2010
Transfer from H.O 15,000
Directly purchased by Branch 12,000

JEHLUM BRANCH ACCOUNT
Date References Rs. Date References Rs.
2010 2010
Jan. 1 Balance b/d Dec. 31 Bank A/c
Dec. 31 Imprest cash 2,000 “ Cash sales 45,000
“ Sundry debtors 25,000 Debtors 125,000
“ Stock (20000 + 16000) 36,000 Abnormal Loss
Bank A/c Cash 100 600
Purchases (Direct) 45,000 P&L 500
Branch expenses 30,000 Balance c/d
Petty cash 2,500 Imprest cash 1,850
Goods sent to branch 50,000 Sundry debtors 24,000
A/c Stock 27,000
General P & L A/c 32,950 (15000 + 12000)
223,450 223,450

MEMO DEBTORS ACCOUNT

Balance b/d 25,000 Bank (Collection) 125,000
Sales 130,000 Bad debts 1,000
Discount allowed 2,000
Sales return 3,000
Balance c/d 24,000
155,000 155,000
9 .Arshad & Co have a sales branch at Bannu and charge all goods sent to branch at cost price
plus 33-1/3 %, it is arranged that all cash received by the branch is to be paid daily to the
head office account with ABL and the necessary advice to the head office ,All expenses are
paid form head office.
From the following particulars prepare Branch account in the head office ledger showing the
actual profit of the branch for the year ending 31st December, 2000.
Stock on 1-1-2000 12000

Goods sent at branch 80,000
Debtors on 1-1-2000 1,500
Cash sent to H.O. 77100
Rent, rates, etc. 3200
Salaries and wages 4800
Debtors on 31-12-2000 1600
Stock on 31-12-2000 14,800
Solution
BANNU BRANCH ACCOUNT
FOR THE YEAR ENDING 31st DECEMBER 2000
2000 2000
Stock 12,000 Cash sent to H.O 77,100
Debtors 1,500 “ Stock Reserve 3,000
Dec. 31 Goods sent to Branch 80,000
“ Bank A/c “ Goods sent to Branch 20,000
Rent rates etc. 3,200
Salaries and wages 4,800 “
“ Stock Reserve 3,700 Balance c/d 14,800
Stock 1,600
“ 11,300 Debtors
General P & L A/c
116,500 116,500

10. A head office in Kohat has a branch in Lala Musa to which goods are invoiced by the
head office at cost price plus 25%.from the following particulars shows how the branch
account will appear in the head office books (entries are to be made at invoice price)
Particulars Rs Rs
st
Stock on 1 July 2010 (invoice price) 12500
Debtors on 1st July 2010 12000
Goods invoiced from Kohat 40000
Cash sales 16000
Cash received from debtors 29500 45500
Cash paid by branch debtors direct to head office 1500
Goods returned to head office 2400
Cheques received from Kohat:
Wages and salaries 11000
Rent,rates,etc 3000
Insurance upto 31-03-2011 500 14500
Stock on 31st December 2010 (invoice price) 15000
Debtors on 31st December 2010 22500
Solution
LALA MUSA BRANCH ACCOUNT
SIX MONTH ENDING 31st DECEMBER 2010
2010 Balance b/d 2010 Bank A/c
July 1 Stock 12,500 Dec. 31 Sales 16,000
Dec. 31 Debtors 12,000 “ Debtors 31,000
“ Goods sent to Branch 40,000 “ (29500+1500)
“ Bank A/c “ Goods sent to Branch 2,400
“ Wages & Salaries 11,000 (Return)
Rent rates etc. 3,000 Stock Reserve 2,500
Insurance 500 (
Stock Reserve Goods sent to Branch 8,000
( 3,000 (Reserve)
480 Balance c/d
(Reserve) Stock
13,410 15,000
General P & L A/c 15,045 Debtors 22,500
97,525 97,525

11. K. Najum who carried on a retail business in Taxila opened a branch office at Attock on
January 1, 2010 where all sales were on credit basis. All goods required by the branch were
supplied by Taxila office and were invoiced to the branch at 20% above cost.
particulars January February March
10 10 10
Goods sent to Attock Branch (Purchase price) 10,000 12,500 15,000
Sales received from Debtors and remitted to Taxila 9,500 10,500 13,750
Cash received from Debtors and remitted to Taxila 5,000 12,750 8,750
Returns to Taxila (invoice price) 300 150 600
The stock of goods held by the branch on March 31, 2010 amounted to Rs. 13,350 at invoice
price to branch. Record these transactions in Taxila books, showing balances as on 31st
March 2010 and the branch profit for three months ended on that date.
Solution
BOOKS OF K. NAJUM
ATTOCK BRANCH ACCOUNT
FOR THE QUARTER ENDING 31st MARCH 2010
2010 Goods sent to branch 45,000 2010 Bank A/c
Jan. 1 Stock Reserve 2,225 Mar. 31 Debtors 26,500
Mar. 31 ( “ Goods sent to branch
“ “ (return) 1,050
Goods sent to branch
“ Goods sent to branch 7,500
(Reserve)
175
8,250 Balance c/d 13,350

General P & L A/c
Stock 7,250
Debtors
55,650 55,650
Goods sent to Branch (Invoice price)

Goods sent to Branch (Cost price)
(10,000 +12,500+15,000) 37,500
Profit (37,500 7,500
Goods sent to Branch (Invoice price) 45,000

Sales (Credit) 33,750 Cash 26,500
Balance c/d 7,250
33,750 33,750

12. S Ltd. maintains a branch at Wazirabad to which it sends goods at cost plus 25%.
Wazirabad branch sells goods both in cash and on credit. All collections and cash sales are
directly deposited to head office Bank Account and all expenses are paid by the head office
directly. From the following information, prepare Wazirabad Branch Account in the books of
head office.

Balances on 1-4-2009 Cash sales 30,000
Branch stock at invoice price 30,000 Cash remitted to head office 120,000
Branch debtors 40,000 Bad debts 2,000
Transactions during the year Discount allowed 3,000
Goods sent to branch at cost 140,000 Abnormal loss of goods at
Goods returned by branch at invoice invoice price 8,000
price 10,000 Cheque sent by head office to
Goods returned by debtors to branch 3,000 branch to meet expenses 12,000
Credit sales 120,000 Balance on 31-3-2010
Furniture purchased by the branch 10,000 Branch debtors 45,000
Expenses paid by branch 1,200 Stock at invoice price 40,000
Head office sent cash to purchase Computer 14,000
Computer for the branch 15,000 Furniture 9,500
Solution
IN THE BOOKS OF S. LTD.
WAZIRABAD BRANCH ACCOUNT
2009 2010
Apr. 1 Balance b/d Mar. 31 Bank A/c 120,000
Stock 30,000 Goods sent to Branch (Return) 10,000
Debtors 40,000 Abnormal loss 8,000
2010 “ Goods sent to Branch (Reserve) 35,000
Mar. 31 Goods sent to Branch 175,000 “ (175,000
“ Bank A/c “
Stock Reserve
Computer 15,000 “ 6,000
Expenses 12,000 “ (30,000
Goods sent to Branch Balance c/d
“ (Reserve) (10,000 2,000 Stock 40,000
“ Abnormal loss (Rserve) Debtors 45,000
“ (8,000 1,600 Computer 14,000
“ Furniture 9,500
Stock Reserve
8,000 Cash 5,800
(40,000
Balance c/d
General P & L A/c 9,700
293,300 293,300
Goods sent to Branch (Invoice price)

Goods sent to Branch (Cost price) 140,000
Profit (140,000 35,000
Goods sent to Branch (Invoice price) 175,000

BRANCH CASH ACCOUNT

Opening balance - Furniture purchased 10,000
Cash sales 30,000 Expenses 1,200
Collection from Debtors 107,000 Cash remitted to H.O 120,000
Closing balance 5,800
137,000 137,000

Opening balance 40,000 Bad debts 2,000
Credit sales 120,000 Bank (collection from Debtors) 107,000
Discount allowed 3,000
Sales return 3,000
160,000 160,000
13. Baby shoes of Lahore opened a branch at Multan to which goods are invoiced at cost plus
25%. From the following information regarding Multan branch, prepare Multan branch
account in the books of Baby shoes for the year ended 31-12-2010:
Particulars Rs. Rs.

Opening stock with branch 11,600
Closing stock with branch 10,000
Credit sales 30,500
Cash sales 9,450
Cash received from debtors 19,200
Goods sent to branch 18,700
Goods in transit on 31-12-2010 1,300
Discount allowed to customer 2,500
Bad debts at branch 1,000
Cash sent by head office to branch for:
Rent 1,500
Advertisement 2,600
Salaries 4,500
Sundry expenses 750 9,350

Solution
IN THE BOOKS OF BABAR SHOES OF LAHORE LTD.
MULTAN BRANCH ACCOUNT
Jan. 1 Stock 11,600 Dec. 31 Bank A/c
Dec. 31 Goods sent to Branch 18,700 Cash sales 9,450
“ Bank A/c Collection from Debtors 19,200
Rent 1,500 “ Goods in transit 1,300
Advertisement 2,600 “ Stock Reserve
Salaries 4,500 ( 2,320
Sundry expenses 750 Goods sent to Branch
“ Goods in transit 260 “ (Reserve) ( 3,740
(Reserve) Balance c/d
“ Stock Reserve 2,000 “ 10,000
Stock
( 7,800
Debtors
“ 11,900
General P & L A/c
53,510 53,810
MEMORANDUM DEBTORS ACCOUTN

Opening balance Bank A/c (collection from debtors) 19,200
Bad debts 1,000
30,500 30,500
14. A head office in Peshawar has two branches at Multan and Daska. Goods are consigned
to them at loaded figures of 10% and 20% on cost respectively. During the year, the invoices
to the branches are Rs. 44,000 and Rs. 60,000 respectively.
Included in the item Rs. 44,000 are invoiced for goods costing Rs. 12,000 and invoice to the
Multan branch at Rs. 13,200 which should have been invoiced to the Daska branch. Sales are
all for cash, with that of Multan branch being Rs. 22,000 and of Daska branch Rs. 50,400. It
may be assumed that the closing stocks are correct.
You are required to prepare (i) Multan Branch Account and (ii) Daska Branch Account.

Solution
BRANCH ACCOUNT
Date Particulars Multan Daska Date Particulars Multan Daska
Rs. Rs. Rs. Rs.
Goods sent to Branch 30,800 74,400 Goods sent to Branch 2,800 12,400
Stock Reserve 800 4,000 Bank A/c
Sales 22,000 50,400
General P & L A/c 2,000 8,400 Balance c/d
Stock 8,800 24,000
33,600 86,800 33,600 86,800
Multan = 44,000 – 13,200 = 30,800
Daska = 60,000 + (12,000 + 12,000 × 20/100) = 60,000 + 14,400 = 74,400
Closing stock = opening stock + Goods sent to Branch – Sale

Multan Branch = 0 + 30,800 – 22,000 = 8,800
Daska Branch = 0 + 74,400 – 50,400 = 24,000
15. On 1st January 2009, Kamal Co. Ltd., open its branch at Tonsa. And it charges all goods
sent to branch at 25% on invoice price. From the following particulars of 2009, 2010. Prepare
branch account for the two year.
Particulars 2009 2010

Rs. Rs.
Goods sent to branch at invoice price 1,12,500 1,75,000
Sales at branch:
Cash 37,500 75,000
Credit 49,000 1,02,500
Receipts from debtors 38,500 80,750
Discount to customers 500 1,250
Cash sent to branch (for expenses) 15,000 25,000
Goods returned to Head Office 3,750 -
Stock on 31st December at invoice price 21,000 17,250
Petty cash on 31st December 225 175


TONSA BRANCH
FOR THE YUEAR ENDING 31st DECEMBER 2009
2009 2009
Jan. 1 Goods sent to Branch 112,500 Dec. 31 Bank A/c
“ Bank A/c Sales 37,500
Expenses 15,000 Debtors 38,500
“ Goods sent to Branch “ Goods sent to Branch
(Reserve) 938 (return) 3,750
“ Stock Reserve “ Goods sent to Branch
5,250 (Reserve) 28,125
“ Balance c/d
“ General P & L A/c 5,412 Stock 21,000
Petty Cash 225
Debtors 10,000
139,100 139,100

Opening balance - Cash (Collection) 38,500
Credit sales 49,000 Discount allowed 500
49,000 49,000
TONSA BRANCH
FOR THE YUEAR ENDING 31st DECEMBER 2010
2010 2010
“ Stock 21,000 “ Sales 75,000
“ Debtors 10,000 “ Debtors 80,750
Petty cash 225 Goods sent to Branch
Goods sent to Branch 175,000 (Reserve) 43,750
Bank A/c Stock Reserve
Expenses 25,000 5,250
Stock Reserve Balance c/d
4,313 Stock 17,250
17,137 Petty Cash 175
General P & L A/c
Debtors 30,500
252,675 252,675


Opening balance 10,000 Cash (Collection) 80,750
112,500 112,500
16. A Head Office in Quetta has a branch in Hyderabad to which goods are invoiced by the
Head Office at 20% on invoice price. The branch deposits all cash received to the credit of
the Head Office Account opened at the Habib Bank, Hayderabad. All expenses are paid by
the Head Office except petty expenses which are met by the Branch Manager. From the
following particulars, show how the Branch Account will appear in the Head Office Books
on 31st December 2010.
Balances on 1st January 2010: Rs.

Stock at invoice price 50,000
Debtors 26,000
Petty cash 520
Furniture 10,000
Goods sent to Branch 1,55,000
Cheques sent to Branch:
Salaries 36,000
Rent 6,000
Insurance for the year ending 31st March, 2011 480
Cash sales 77,800
Credit sales 1,24,000
Goods returned to Head Office 5,000
Goods returned by Debtors 3,000
Cash received from Debtors 1,15,000
Discount allowed to Debtors 1,800
Bad debts written off 1,200
Petty expenses paid by the Branch Manager 440
Stock as on 31st December 2010 at invoice price 40,000
Write off 10% Depreciation on furniture

HYDERABAD BRANCH ACCOUNT
2010 Balance b/d 2010 Bank A/c
Jan. 1 Stock 50,000 Dec. 31 Sales 77,800
Debtors 26,000 Debtors 115,000
Petty cash 520 “ Goods sent Branch
Furniture 10,000 (Return) 5,000
“ Goods sent to Branch 155,000 “ Goods sent to Branch
“ Bank A/c (Reserve) 31,000
Salaries 36,000 “ Stock Reserve 10,000
Rent 6,000 “ Balance c/d
Insurance 480 Stock 40,000
“ Goods sent to Branch Debtors 29,000

(Reserve) 1,000 Petty cash 80

“ Stock Reserve 8,000 Furniture 9,000
“ General P & L A/c 24,000 Prepaid insurance 120
317,000 317,000

Balance b/d 26,000 Bank (Collection from debtors) 115,000
Bad debts 1,200
Sales return 3,000
Balance c/d 29,000
150,000 150,000
PETTY CASH ACCOUNT

Balance b/d 520 Petty expenses 440
Bank (Cash from H.O) - Balance c/d 80
520 520
Furniture closing Balance = Cost price – Depreciation

= 10,000 – (10,000 × 10%) = 10,000 – 1,000 = 9,000

PROBLEMS
1. From the following information relating to the Lahore branch for the year ending 31st
march 1994 prepare the branch account in the books of head office.
Opening balances on 1-4-93 Rs. Cheque sent to branch Rs.

Stock at branch 75,000 Salaries 45,000
Debtors at branch 150,000 Rent & taxes 7,500
Petty cash at branch 1,500 Petty cash 5,500
Cash sales 300,000 Closing balances on 31-3-94
Goods sent to branch 1,260,000 Stock at branch 125,000
Cash received from debtors 1,050,000 Debtors at branch 240,000
Goods returned by branch 10,000 Petty cash at branch 1,000
Credit sales 1,140,000
Ans. 181,500
2. A Ltd. had a Branch Office at Sialkot. The following were the transactions took place
between Head Office and its branch office for the year ending 31st December 2010.
Particulars Rs.
Branch opening Stock (1-1-2010) 6,000
Goods sent to Branch 134,000
Cash sent to Branch for expenses:
Salaries, Rent, Telephone, Petty cash, etc. 9,900
Cash sent to Head Office 158,000
Branch Stock on 31-12-2010 16,000
Branch cash balance on 31-12-2010 200
All expenses of branch were met by Head Office through Cheques. Show Branch Account in
the books of Head Office.
Ans. Rs. 24,300
3. From the following particulars relating to Lahore branch for the year ending 31st December
2010, prepare Lahore branch account in the books of Head Office.
Particulars Rs.
Balance on 1-1-2010
Salaries outstanding 600
Goods sent to branch during the year 56,800
Cash paid by debtors direct to H.O. 75,800
Cash sent to branch for expenses 18,000
Goods returned by branch 1,600

Balance on 31-12-2010
Ans. Rs. 32,620
4. X of Lahore has a branch at Gujranwala. Goods are supplied to the branch at cost. The
expenses of the branch are paid from Lahore and the branch keeps a sales journal and the
debtors ledger only. From the following information supplied by the branch, prepare a
Branch Account in the books of the head office. (all figures are in rupees).
Opening stock (1-4-2009) 48,000 Sundry Debtors on 31-3-2010 18,320

Closing stock (31-3-2010) 36,000 Goods received from H.O. 67,200
Credit sales 82,000 Expenses paid by H.O. for the Branch 20,800
Cash sales 35,000 Pilferage of goods by the employees 4,000
Receipts from debtors 75,800
Ans. Profit 17,000
5. From the following particulars relating to Gujranwal Branch for the year ending 31-12-
2010, prepare Branch Account in the books of head office and show how the relevant items
will appear in the head office Balance Sheet as on that date.
Balances on 1-1-2010 Rs. Rs.

Stock 80,000 Cash paid by debtors direct to head office 44,000
Debtors 28,000 Discount allowed 2,200
Petty cash 3,000 Cash sent to branch for expenses:
Furniture 24,000 Rent Rs, 24,000, Salaries Rs. 10,800 Petty
Prepaid fire insurance 2,300 cash Rs. 8,000
Outstanding salaries 4,200 Insurance (from 1-4-2010 to 31-3-2011) 3,200
Goods sent to branch 560,000 Goods returned by the branch 8,000
Cash sales 660,000 Goods retuned by the debtors 14,000
Credit sales 366,000 Stock on 31-12-2010 76,000
Cash received from debtors 270,000 Petty expenses paid by the branch 5,700
Provide depreciation on furniture @ 10% p.a.
Loss of stock by the fire 9,600
Ans. 4,20,000

6. From the following particulars relating to Daska Branch for the year ending 31st December,
2010, pass the necessary journal entries & branch account in the Head office books. Goods
sent to the branch are invoiced at cost price and the branch makes both cash and credit sales:
Particulars Rs.
st
Stock at Daska Branch on 1 January 2010 7120
Branch debtors on 1st January 2010 3760
Petty cash at Branch on 1st January 2010 160
Goods sent to Branch during the year 22720
Cash sales during the year 12640
Credit sales during the year 32320
Cash received from Debtors 30320
Cash sent to Branch:
Stock 1600
Salaries 4800
For expenses – petty expenses 800
Goods returned by Branch 640
Stock at Branch on 31st December 2010 4320
Petty cash at branch on December 2010 240
Branch debtors on December 2010 5760
Ans. 12,960
7. From the following details regarding to Sialkot Branch, prepare a Branch Account in
respect of the year 2010:

Stock on 1-1-2010 24000 Returns to head office 9600
Stock on 31-12-2010 19200 Bad debts 1200
Petty cash 1-1-2010 1200 Discount allowed 620
Debtors on 1-1-2010 20000 Petty expenses paid by branch 1400
Debtors on 31-12-2010 23000 Returns from customers 6000
Goods sent to branch during 84000 Expenses paid by head office:
Cash sales 51600 Salaries and wages 16800
Credit sales 72000 Rent (from 1-1-2010 to 31-3-2011) 10500
Normal loss 4000 Cash sent for petty expense by H.O 1600
Ans. 9,980
8. From the following particulars, prepare Branch Account showing the profit or loss of the
branch for the year ended 31-12-2010 (all figures are in rupees)

Opening stock at the branch 60,000 Expenses met by head office
Goods sent to branch 180,000 Salaries 20,000
Cash sales 2,40,000 Other expenses 8,000
Closing stock could not be ascertained, but it is known that the branch usually sells at cost
plus 20% the branch manager is entitled to a commission of 5% on the profit of the branch
before charging such commission. Ans. 11,400

9. A Company with its head office at Islamabad has a branch at Multan. The branch receives
all goods from head office, who also remits cash for all expenses. Sales are made by the
branch on credit as well as for cash.
Total sales by the branch for the year ending 31-3-2010 amounted to Rs. 280,000 out of
which 20% is cash sales. The following further information is relevant:
Expenses paid by the head office: Salaries – Rs. 18,000; Rent – Rs. 6,000;
Petty expenses paid by branch 2,800. All sales are made by the branch at cost plus 25%
You are required to prepare the Multan Branch Account in the books of the head office for
the year ended 31st March 2010.
Ans. P & L A/c Rs. 29,200
10. The head office of a company invoice goods to its Jehlum Branch a cost, who also
purchases goods independently from local parties for which payments are made by the head
office. All the cash collected by Branch is banked on the same day to the credit of the head
office and all expenses are directly paid by the head office except for a Petty Cash Account
maintained by the branch for which periodical transfers are made from the head office.
From the following particulars, show the Branch Account as maintained in the head office
books, reflecting the branch profit for the year ending 31-12-2010

Imprest Cash 1-1-2010 4000 Return from Customers 6000
Imprest Cash 31-12-2010 3700 Goods sent to Branch from H.O 100000
Sundry Debtors on 1-1-2010 50000 Transfer from H.O for petty cash expenses 5000
Stock on 1-1-2010 Bad debts 2000
Transferred from H.O 40000 Discount to customers 4000
Directly purchased by Branch 32000 Cash received from customers 250000
Shortage of stock 8000 Branch expenses 60000
Cash sales 90000 Goods costing Rs. 600 were destroyed due
Credit sales 260000 to fire and a sum of Rs. 500 received from
Direct purchases 90000 the Insurance Co.
Stock on 31-12-2010
Transfer from H.O 30000
Directly purchased by Branch 24000
Ans. 65,900

11. Arshad & Co have a sales branch at Bannu and charge all goods sent to branch at cost
price plus 33 1/3 %, it is arranged that all cash received by the branch is to be paid daily to
the head office account with ABL and the necessary advice to the head office ,All expenses
are paid form head office.
From the following particulars prepare Branch account in the head office ledger showing the
actual profit of the branch for the year ending 31st December, 2000.
Stock on 1-1-2000 24,000

Goods sent to branch 160,000
Debtors on 1-1-2000 3,000
Cash sent to H.O. 154,200
Rent, rates, etc, 6,400
Salaries and wages 9,600
Debtors on 31-12-2000 3,200
Stock on 31-12-2000 29,600
Ans. 22,600
12. Mr. X has a branch in Sargodha. He invoices goods to the branch at selling price which is
cost plus . From the following particulars prepare Branch Account and Goods Sent to
Branch Account in the books of Mr. X.

Stock on 1-1-10 (Invoice price) 15,000 Discount allowed to customers 300
Debtors on 1-1-10 11,400 Bad debts written off 250
Goods sent to branch at invoice price 67,000 Cheques sent to branch
Cash sales 31,000 Salaries 5,000
Credit sales 37,400 Sundry expenses 1,700
Cash received from Debtors 40,000 Stock on 31-12-10 (Invoice price) 13,400
Ans. Profit 9,700

13. A head office in kohat has a branch in lala musa to which goods are invoiced by the head
office at cost price plus 25%.from the following particulars shows how the branch account
will appear in the head office books (entries are to be made at invoice price)
Particulars Rs Rs
st
Stock on 1 July 2010 (invoice price) 25000
Debtors on 1st July 2010 24000
Goods invoiced from kohat 80000
Cash sales 32000
Cash received from debtors 59000 91000
Cash paid by branch debtors direct to head office 3000
Goods returned to head office 4800
Cheques received from kohat:
Wages and salaries 22000
Rent,rates,etc 6000
Insurance upto 31-03-2011 1000 29000
Stock on 31st December 2010 (invoice price) 30000
st
Debtors on 31 December 2010 45000
Ans. 30,090
14. The Naveed stores Ltd. Multan has a branch at Hyderabad. Goods are invoiced to the
branch at a selling price, being cost plus 25%. The branch keeps its own sales ledger and
deposits all cash received daily to the credit of the Head office Account opened at the MCB,
Hyderabad. All expenses are paid by Cheques from Multan.
From the following information, prepare Branch Account in the Head office Books and make
the necessary adjustments therein to arrive at the actual branch Profit and Loss during the
year 2010.
Rs.
Stock on 1-1-10 30,000
Stock on 31-12-10 36,000
Sundry debtors on 1-1-10 16,800
Sundry debtors on 31-12-10 21,600
Goods invoiced from H.O. 2,18,400
Rent, rates and taxes 9,600
Sundry expenses 1,920
Cash sales for the year 1,29,600
Credit sales 84,000
Cash received from debtors 79,200
Wages paid 8,960
Ans. 23,200

15. K. Najum who carried on a retail business in Taxila opened a branch office at Attock on
January 1, 2010 where all sales were on credit basis. All goods required by the branch were
supplied by Taxila office and were invoiced to the branch at 20% above cost.
particulars January February March
10 10 10
Goods sent to Attock Branch (Purchase price) 20000 25000 30000
Sales received from Debtors and remitted to Taxila 19000 21000 27500
Cash received from debtors and remitted to Taxila 10000 25500 17500
Returns to Taxila (invoice price) 600 300 1200
The stock of goods held by the branch on March 31, 2010 amounted to Rs. 26,700 at invoice
price to branch. Record these transactions in Taxila books, showing balances as on 31st
March 2010 and the branch profit for three months ended on that date.
Ans. 16,500
16. K.W. who carried on a retail business, opened a Z Branch on 1-1-2010 where all sales
were on credit basis. All goods required by the branch were supplied from the head office and
were invoiced to the branch at 10% above cost. The following were the transactions.
Jan. Feb. Mar.

2010 2010 2010
Goods sent to branch (purchase price) 40,000 50,000 60,000
Sales as shown by the branch monthly report 38,000 42,000 55,000
Cash received from debtors and remitted to Head Office 20,000 51,000 35,000
Returns to head office (Invoice price) 1,200 600 2,400
The stock of goods held by the branch on 31-3-2010 amounted to Rs. 53,400 at invoice price
to branch. Record these transactions in the head office books, showing balances as on 31-3-
2010 and the branch gross profit for the three months ended on that date. All working should
be part of your answers.
Ans. 37,363
17. S Ltd. maintains a branch at Wazirabad to which it sends goods at cost plus 25%.
Wazirabad branch sells goods both in cash and on credit. All collections and cash sales are
directly deposited to head office Bank Account and all expenses are paid by the head office
directly. From the following information, prepare Wazirabad Branch Account in the books of
head office.

Balances on 1-4-2009 Cash sales 60000
Branch stock at invoice price 60000 Cash remitted to head office 240000
Branch debtors 80000 Bad debts 4000
Transactions during the year Discount allowed 6000
Goods sent to branch at cost 280000 Abnormal loss of goods at
Goods returned by branch at invoice invoice price 16000
price 20000 Cheque sent by head office to
Goods returned by debtors to branch 6000 branch to meet expenses 24000
Credit sales 240000 Balance on 31-3-2010

Furniture purchased by the branch 20000 Branch debtors 90000

Expenses paid by branch 2400 Stock at invoice price 80000
Head office sent cash to purchase Computer 28000
Computer for the branch 30000 Furniture 19000
Ans. 19,400
18. Baby shoes of Lahore opened a branch at Multan to which goods are invoiced at cost plus
25%. From the following information regarding Multan branch, prepare Multan branch
account in the books of Baby shoes for the year ended 31-12-2010:
Particulars Rs. Rs.

Opening stock with branch 23200
Closing stock with branch 20000
Credit sales 61000
Cash sales 18900
Cash received from debtors 38400
Goods sent to branch 37400
Goods in transit on 31-12-2010 2600
Discount allowed to customer 5000
Bad debts at branch 2000
Cash sent by head office to branch for:
Rent 3000
Advertisement 5200
Salaries 9000
Sundry expenses 1500 18700
Ans. 23,800
19. A head office in Peshawar has two branches at Multan and Daska. Goods are consigned
to them at loaded figures of 10% and 20% on cost respectively. During the year, the invoices
to the branches are Rs. 88,000 and Rs. 120,000 respectively.
Included in the item Rs. 88,000 are invoiced for goods costing Rs. 24,000 and invoice to the
Multan branch at Rs. 26,400 which should have been invoiced to the Daska branch. Sales are
all for cash, with that of Multan branch being Rs. 44,000 and of Daska branch Rs. 100,800. It
may be assumed that the closing stocks are correct.
You are required to prepare (i) Multan Branch Account and (ii) Daska Branch Account.
Ans. Multan Branch Rs. 4,000 ; Daska Branch Rs. 16,800

20. On 1st January 2009, Kamal Co. Ltd., open its branch at Tonsa. And it charges all goods
sent to branch at 25% on invoice price. From the following particulars of 2009, 2010. Prepare
branch account for the two year.
Particulars 2009 2010

Rs. Rs.
Goods sent to branch at invoice price 225000 350000
Sales at branch: 0
Cash 75000 150000
Credit 98000 205000
Receipts from debtors 77000 161500
Discount to customers 1000 2500
Cash sent to branch (for expenses) 30000 50000
Goods returned to Head Office 7500 0
Stock on 31st December at invoice price 42000 34500
Petty cash on 31st December 450 350
Ans. 2009 Rs. 10,824; 2010 Rs. 34,274
21. K Stores of Gujranwala has a branch at Sargodha. Goods are invoiced to the branch at
selling price, being 20% profit on selling price. The branch keeps its own sales ledger, and
deposits all cash received daily to the credit of the Head Office account, in the Union Bank
Sargodha. All expenses are paid by Cheque from Gujranwala. From the following particular
prepare a Branch Account in the Head Office Books (Make necessary adjustments to arrive at
the actual Branch Profit or Loss) for the year 2010.
Particulars Rs
Stock on 1st Jan. 2010 5,000
Stock on 31st Dec. 2010 6,000
Sundry Debtors on 1st Jan. 2010 2,800
Cash sales for the year 21,600
Credit sales for the year 14,000
Cash received on Ledger Account 13,200
Goods invoiced from Head Office 36,400
Rent, rates, etc. (paid from H.O) 1,600
Wages unpaid 1,360
Sundry expenses 320
Rent still owing 140
Ans. Profit 3,860

22. A Head Office in Lahore has a branch in Multan to which goods are invoiced by the Head
Office at 20% on invoice price. The branch deposits all cash received to the credit of the
Head Office Account opened at the Habib Bank, Multan. All expenses are paid by the Head
Office except petty expenses which are met by the Branch Manager. From the following
particulars, show how the Branch Account will appear in the Head Office Books on 31 st
December 2010.
Balances on 1st January 2010: Rs.

Stock at invoice price 25,000
Debtors 13,000
Petty cash 260
Furniture 5,000
Goods sent to Branch 77,500
Cheques sent to Branch:
Salaries 18,000
Rent 3,000
Insurance for the year ending 31st March, 2011 240
Cash sales 38,900
Credit sales 62,000
Goods returned to Head Office 2,500
Goods returned by Debtors 1,500
Cash received from Debtors 57,500
Discount allowed to Debtors 900
Bad debts written off 600
Petty expenses paid by the Branch Manager 220
Stock as on 31st December 2010 at invoice price 20,000
Write off 10% Depreciation on furniture
Ans. General P & L A/c Rs. 12,000

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ADVANCED FINANCIAL ACCOUNTING

Rooh Ullah (M.Com)

THE STANDARD GIRLS COLLEGE

Following accounts will not be recorded in Branch Account

Memorandum Branch Debtors A/C

Particulars Rs. Particulars Rs.

Roohullah (M.Com) 0333-87 86 389 Lecturer: The Standard College

Petty Cash Account

1- Petty cash opening

Petty Cash Account

Particulars Rs. Particulars Rs.

1. Goods sent to branch

Branch Cash Account

Particulars Rs. Particulars Rs.

Roohullah (M.Com) 0333-87 86 389 Lecturer: The Standard College

Date Details L/F Rs. Rs.

Roohullah (M.Com) 0333-87 86 389 Lecturer: The Standard College

Opening balances on 1-4-93 Rs Cheque sent to branch Rs

IN THE BOOKS OF HEAD OFFICE

Roohullah (M.Com) 0333-87 86 389 Lecturer: The Standard College

Balances on 1-1-2010 Rs. Rs.

Total months = 1-Apr-2010 to 31-March-2011 = 12 months

Prepaid insurance = Rs. 1,600 × 3/12 = Rs. 400

Roohullah (M.Com) 0333-87 86 389 Lecturer: The Standard College

MEMORANDUM DEBTORS ACCOUNT

PETTY CASH ACCOUNT

BALANCE SHEET OF HEAD OFFICE

Roohullah (M.Com) 0333-87 86 389 Lecturer: The Standard College

HEAD OFFICE BOOK

Roohullah (M.Com) 0333-87 86 389 Lecturer: The Standard College

BOOKS OF HEAD OFFICE

Particulars Rs. Particulars Rs.

Roohullah (M.Com) 0333-87 86 389 Lecturer: The Standard College

MEMORANDUM BRANCH DEBTORS ACCOUNT

PETTY CASH ACCOUNT

Total months = 1-Jan.-2010 to 31-Mar-2011 = 15 months

Prepaid rent = 5,250 × 3/15 = Rs. 1,050

Particulars Rs. Particulars Rs.

IN THE BOOKS OF THE HEAD OFFICE

CGS = Opening stock + Goods sent to branch – Closing stock

Roohullah (M.Com) 0333-87 86 389 Lecturer: The Standard College

CGS = Sales – Gross profit

Manager’s commission = Net profit × 5% = 6,000 × 5% = 300

Net profit = 140,000 – 30,000 – 90,000 – 10,000 – 4,000 = 6,000

Cash & Credit Sales

Goods sent to Branch

Cost of goods sold = Sales – Gross profit = 560,000 – (560,000 × 25/125)

Roohullah (M.Com) 0333-87 86 389 Lecturer: The Standard College

Particulars Rs. Particulars Rs.

IN THE BOOKS OF THE HEAD OFFICE

Roohullah (M.Com) 0333-87 86 389 Lecturer: The Standard College

MEMO DEBTORS ACCOUNT

Stock on 1-1-2000 12000

Roohullah (M.Com) 0333-87 86 389 Lecturer: The Standard College

Roohullah (M.Com) 0333-87 86 389 Lecturer: The Standard College

8,250 Balance c/d 13,350

Goods sent to Branch (Invoice price)

MEMORANDUM DEBTORS ACCOUNT

Roohullah (M.Com) 0333-87 86 389 Lecturer: The Standard College

Particulars Rs. Particulars Rs.

Goods sent to Branch (Invoice price)

Roohullah (M.Com) 0333-87 86 389 Lecturer: The Standard College

BRANCH CASH ACCOUNT