(Branch Account)

Dependent branch
Illustration 1: A head office in Nagpur supplies good to it s branch at Wardhaat cost. The branch sells the
goods for only cash and remits the proceeds to the head office promptly ,the branch expenses being met by the
head office by cheque . The
following are transactions relating to the brach for the year ended 31 stDecember2000 :-
RS.
Stock at branch on 1-1-2000 12000
Petty Cash at Brach on 1-1-2000 400
Goods sent toBrach during the year 55,000
Goods returned by Branch 5,000
Cheque sent by Head Office towards Branch Expenses:-
Salaries 2,400
Insurance 600
Rent 800
Petty Expenses 1,000—4,800
Stock at Brach on 31-12-2000 8,000
Petty Cash at Branch on 31-12-2000 200
Cash Sales 75,000
From the above information ,pass the necessary journal entries and prepare Wardha Branch Account in the
books of the Head Office.

Illustration 2: Assuming that the goods are sent to the brach at cost,cash collected brach is remitted to the Head
Office.
Prepare Branch Account from the following particulars showing the working(Rough work) properly:
RS.
Opening stock at Branch 60,000
Goods sent to Branch 1,80,000
Cash Sales 2,40,000
Closing stocks could not be asceriained, but it is known that the branch usully sells at cost plus 20%. The
Branch Manager is entitled to a commission of 5% on the profit (befor charging such commission) in addition
to yearly salary to Rs. 12,000 . Other expenses of the branch are Rs.16,000.

Illusration:3M/s P. &A, Chandrapur have a branch at Warora. Haed Office sends goods to branch at a cost
price. The branch sells the goods for cash as well as on credit . Brach remits all the cash to the Head Office. All
the expenses of the branch paid by the Head Office.
From the following information, prepare Branch Account and Branch Trading and Profit& Loss
Account in the books of Head Office .
Rs.
Opening Blance on 1-4-1999: 19,000
Trade Stock 15,000
Petty Cash 42
Goods Received from the Head Office 70,000
Goods Returned to Head Office 2,000
Cash Sales 43,600
Discount to debtors 70
Gross Sales 89,200
Rebate to debutors 640
Cash received from debtors 48,400
Cheque sent to Branch for expenses:
Salaries & Wages 3,220
Notes By:- Lavendra Thakre(9049089325) Faculty :- Tulsi Bibhar Sir(8928465509) Page 1
 Rent, Rates & Taxes 940
Petty Cash 480
Insurance 1,640-6,280
Goods returned by debuters 800
Bad Debts 1,200
Closing Balaces on 31-3-2000:
Trad Stock 15,800
Debtors 9,490
Petty Cash 64

Illusrations4: A Company makes purcheses at the a Head Office and sends the goods brought to the Branch
Offices for sales,no stock being retained at the Head Office. The Branch Offices effect sales,keep their own
Sales Ledger, receives cash against Ledger Accounts and play in whole of their cash receipt every day to the
Head Office .Branch Office to expenses are paid from cash remitted by the Head office to the Branches for the
purpose.
From the following particulars show:
1) The Branch Accounts in the Head Office Books and
2) General Profit & Loss Accounts showing the net profit for the whole
Concern,assuring that the Head Office expenses amounted to Rs.15,000.

Amravati Bhabdara
(Rs) (Rs)

Credit Sales 40,500 39,000

Returns Inward 300 360
Allowance to customers 75 60
Cash received from Ledger Accounts 35,700 36,000
Cash sales 21,300 36,000
Stock at commencement at cost 8,100 7,200
Stock at end ,at cost 9,300 8,700
Debtors at commencement 18,750 18,000
Bad Debts 225 150
Goods bought by Haed Office and Supplied
to the branch 31,800 30,900
Rent and taxes paid 12,00 1,050
Wages etc. 5,700 5,340

Illustration:5 Prepare Arvi Branch Account in the books of Wardha Head Office from the following particulars:
Rs.
Stock on 1-1-2002 8,000
Debtors on 1-1-2002 3,000
Furniture on 1-1-2002 10,000
Prepaid Insurance on 1-1-2002 2,000
Goods supplies to Branch 800
Cash sent to Branch for expenses 80,000
Salaries 5,000
Insurunce 1,500
Petty Cash 1,000-7,500
Outstanding Wages on 31-12-20002 600

Notes By:- Lavendra Thakre(9049089325) Faculty :- Tulsi Bibhar Sir(8928465509) Page 2

Outstanding Wages on 1-1-20002 32,00
Cash sales 65,000
Debtors made direct payment to Head Office 5,000
Debtors made direct payment to Branch 4,000
Debtors returned goods direct to Head Office 2,500
Branch returned goods to Head Office 4,000
Debtors on 31-12-20002 10,000
Stock on 31-12-2002 8,000
Credit Sales 25,000
Goods retured by Debtors 3,400
Discout allowed to Debtors 1,200
Petty Expenses paid by Branch 500
Depreciation is to be charged on Furniture by 10% p.a. Goods of Rs. 2,000 were destroyed by fire and
Insurance Company admitted the claim for Rs. 1,500 only and this amount is received from Insurance company
.branch remmited necessary cash to Head office.
Illustration:6 M/s. Renuka& Co. Ltd. Nagpur has a branch at Pulgaon an all the goods sent to branch at
cost price. Branch
sales the goods for cash and on credit .All the expenses are paid by the Head Office. Branch
keeps their Sales Ledrer
and Books only.
From the information given below, you are required tob prepare Branch Account and Profit Loss
Account for the year ended 31st Dec.,2001 in the Head Office. Rs.
Stock(on 1-1-2001) 45,000
Stock (on 31-12-2001) 50,000
Debtors (on 1-1-2001) 18,000
Goods sent to Branch 2,00,000
Goods returned by Branch 6,0000
Gross Sales 2,50,000
CashSales 1,60,000
Bad Debts written off 300
Discount allowed to customers 500
Returns Inward 600
Cash sent to Branch toward expenses:
Manager’s Salaries 8,000
Rent 4,000
Petty Cash 14,00-13,400
Cash remitted by Branch during the year 2,30,000
Petty Cash (on 1-1-2001) 300
Petty cash (on 31-12-2001 500
The Branch Manager is entitled to a commission of 10% on the profit after charging such commission.

Illustration :7Pratibha Agencies of Pune has branch at Nagpur . Goods are invoiced to the branch at costplus 20
percent . The expenses of the branch are paid from Pune and the Branch keeps a sales Journal and the Debtors
Ledger only .Following information supplied by the branch:
(a) Prepare Trading and P&L Account of the branch for the year ending 31 st March, 2003
(b) Show the account of the branch as it would appear in the books of Head Office :-
Rs
Credit Sales 20,000
Cash Sales 8,700
Opening Stock (at Invoice Price ) 12,000
Closing Stock (at Invoice Pric ) 9,000
Receipt from Debtors 18,950
Sundry Debtors on 31stMarch ,2003 4,580

Notes By:- Lavendra Thakre(9049089325) Faculty :- Tulsi Bibhar Sir(8928465509) Page 3

 Goods received from Head Office 15000
Expences paid by the Head Officefor the brach:
Salaries & Rent 4,800
Petty Cash 400
Petty Cash with branch on 1stapril, 2002 20
Petty Cash with branch 31st March, 2003 25
The Branch Manager is entitled to a commission of 2% on credit sales

.
Illustation:8 Anil Company of Nagpur have a Branch at Armori Goods are sent by the head office at
invoice price which is at a profit of 20% on invoice p[rice.Allexpences of branch are paid by the
head office.
From the foolowing particulars, prepare Branch Account in the books of Head Office.
Rs.
Opening Balances :

Stock at invoice price 24,200

Petty Cash 200
Goods sent to the branch at invoice price 60,000
Expences met by the head office :
Rent 1,200
Wages 2,400
Salary 4,800-8,400

Remittance made to head office :

Cash Sales 18,300
Cash coolect from Debtors 44,000
Goods returned by branch at invoice price 1,800
Credit Sales
Balances at the end:
Stock at invoice price 26,000
Debtors 14,000
Petty Cash 50

[N.U. March 1999& Oct. 2005,March

2007 ,Old, Oct.2007,March,2009 New with figures2 ½ times,March,2010]

Illustrataion 9:Pratibha Ltd. Nagpur started a branch at Gondia on1st April ,1996 to which goods where sent
20%above cost ,the branch makes both credit and cash sales.Branch expenses are mete by H.O.The branch does
not mentane regular books of account and necessary account relating to branch are maintain in H.O.

Following particulars are available for the year ended onn31st March ,1997: Rs.
Goods sent to branch at invoice price 60,000
Goods received by branch till 31st March,1997 at invoice price 58,000
Credit Sale for the year 20,800
Debtors as on 31st March,1997 200
Bad debits 17,000
Cash sales 2000
Cash in hand at brach on31st March,1997 6000
Closing stocks at branch at invoice price
Branch expences made by H.O.

Notes By:- Lavendra Thakre(9049089325) Faculty :- Tulsi Bibhar Sir(8928465509) Page 4

Wages 3000
rent 8000
Petty expenses 1000-12000
Show the following books of H.O. :
(1) Branch account
(2) Branch Debtors account
(3) Branch trading and profit&and loss account
[N.U. Oct .1998]

Illustration 10: From the following particulars prepare a Branch Account ,Branch Debtors Account and Branch
Trading and Profit &Loss Account in Head Office book.Branch invoiced goods at selling price to have 20%
profit on invoice value . Branch Manager is allowed 2% commission on remittes from branch Debtors .All
branch expenses are met by H.O. by sending required cheques. All the cash received by branch is remmited by
H.O.:
Rs.

Branch stock (1-1-93)(at invoice price) 80,000

Branch Debtors (1-1-93) 40,000

Goods sent to branch (at invoice price 3,80,000

Cash received from branch 5,73,400

Credit sale of branch 2,50,000

Discount allowed to costomer 1,600

Total sale of branch 5,60,000
Branch stock (31 -12-93)(at invoice price) 30,000
Branch debtors (31-12-93) 25,000
Branch expense paid by H.O. 48,200
[N.U.Oct.1994& Oct.2008 with
figures ½ times]

Illustration 11 ; The Head Office has a branch at Nagpur. Goods are sent by the head office to the jBranch at
selling price which is cost plus 25% All the expenses of the Branch arte paid by the Head Office. All cash
collected by the branch is remitted to the jHead Office.
From the following prepare Branch Trading and Profit & Loss account in the jbooks of Head office. Also
give a Branch a/c at it would appear in the Head Office.
Debtors as on 1-1-2008 12,000
Debyors as on 31-12-2008 14,000
Inventory in Invoice Price on 1-1-2008 16,000
Inventory in invoice Price on 31-12-2008 17,000
Cash Sales during the year 60,000
Total cash remitted to Head Offices 1,27,000
Goods send to branch at Invoice Prices 1,40,000
Good returned to Head Office 5,000
Cash send to Branch for -
Rent (upto -31-3 2009) 5,000
Salaries 6,000
11,000
Discount allowed to Debtors 1.500

Notes By:- Lavendra Thakre(9049089325) Faculty :- Tulsi Bibhar Sir(8928465509) Page 5

Bad Debts written off 1,000
Spoilage of Goods 2,000
Goods returned by Brach Debtors 500

Illustration 12 : Nagpur Traders have their head office at Nagpur and a branch at Chandrqpur. Branch is allowed
to sell goods sent to them by H.O. on credit as well as on cash. All cash collection s are paid in the bank daily in
H.o. on credit as well as on cash. All cash collections are paid in the bank daily in H.O. account and cheques are
sent to branch to meet its expenses. Good are sent to brach at Invoic e Price so as to realize 20% profdit on
cost.
Prepare the following accounts in the boods of Nagpur head offices :
(1) Branch Debtgors Account
(2) Branch Account j
(3) Branch Trading and Profit & Loss Account
Opening balances with branch (1-1-90) :
Rs
Goods 24,000
Debtors 26,000
Petty Cash 120
Closaing balances with branch (31-12-90) :
Goods 30,000
Debtors 23,000
Petty Cach 150
Cheques sent to jbranchfor ;
Salaries 24.000
Rent 18,000
Petty Cash 2,600
Goods Sent to branch 3,30,000
Total sales of branch 3,60,000
Cash sales of branch 1,85,000
Furniture with the branch the account of which is maintained by the H.O. Rs. 40,000.
Depreciation at 15% p.a. is to be Charged on it. The branch is to be given a debit @ 1 ½ % of total Sales
for Administrative Expenses. Thje branch allowed discoiunt of Rs. 3,000 to its customers and intere3st of Rs.
1,500 is charged on them.

Illustration 13 : R.K. Ltd. Rajura, Invoiced goods to its KatoljBranch at Cost plus 25% thereon. jBranch is
allowed to effect both Cash and Credit Sales. Branch expenses are paid directly from head Office and all cash
collected being remitted to a Head Office A/c by the Branch directly.
You are required to prepare in the books opf H.O. :
(1) Branch Debtors Account,
(2) Katol Branch accont
(3) Gods sent to Katol branch account.
The transactions of the branch for the year ended on March 31st 2013 were as under :
Rs
(1) Goods sent to Branch at Invoice Price 4,50,000
(2) Return to H.O. at Invoice price 25,000
(3) Stock at branch on 1-4-2012 (at Invoice Prices ) 1,00,000
(4) Credit sales for the year 3,50,000
(5) Gross sales for the year 5,37,000
(6) Debtors on 1-4-2012 60,000
(7) Cash received on Ledger Accounts 3,00,000

Notes By:- Lavendra Thakre(9049089325) Faculty :- Tulsi Bibhar Sir(8928465509) Page 6

 (8) Customers Billsa accepted by Branch 5,000
(9) Bad debts written off 8,000
(10) Goods returned from customers 7,000
(11) Cheques sent Branch Expenses for:
Salaries 25,000
Rent & Taxes 16,000
Sundry expenses 9,000
50,000
(12) Stock at branch on 31-3-2013 (at invoice price)

Illustration 14: Grihlaxmicompany. Akola started a branch at Hinganghat on 1 st January,1998 .Goods are sent to
branch at cost plus 25%. Branch keeps its own sales Ledger.All expenses of the branch are paid by the head
office and all cash collected by the branch is remitted daily to the Head Office.
From the following information prepare Branch Account and Trading and Profit & Loss Account for the
year ended 31stDecember ,1998 in the books of Head Office.
Rs.
Goods Sent to Branch at Invoice Price 66,600
Cheque sent for Branch Expenses 10,800
Discount allowed to debtors 75
Bad Debts written off 120
Total Sales 49,500
Cash Sales
31,500
Good returned by Coustomers at selling price 750
Cash remitted toHead Office 45,750
Branch Stock on31-12-98 17,700
Petty Cash with branch at the end of the year 450

Illustration 15 ;Purti Sales Ltd. Nagpur has a Branch at Amravati. The Branch has been instructed to send all
cash received to the Head office Daily and all aits expenses are paid by the head Office.
Rs.
Branch Stock on 1-4-2011 (at Invoice Price) 40,000
Branch Debors on 1-4-2011 16,000
Branch Petty Cash on 1-4-2011 400
Goods send to Branch (at cost Price) 2,00,000
Expenses paid by Head Office :
Salary 48,000
Rent 12,000
Stationery 6,000
Petty Cash 2,800
68,000
Goods returned by Branch (at Invoice Price) 4,000
Cash Sales 1,17,200
Credit Sales 1,40,000
Cash received from Customers 1,20,000
Goods Returned by customers 10,000
Discount allowed to Customers 6,000
Branch Petty Cash on 31-3-2012 (at Invoice Price) 50,000
Branch petty cash on 31-3-2012 800
From the above prepare:
(1) Branch Account,
(2) Branch Debtors Accoount
(3) Branch

Notes By:- Lavendra Thakre(9049089325) Faculty :- Tulsi Bibhar Sir(8928465509) Page 7

 (4) Trading and Profit & Loss Account in the Books of Head office.

Illustration 16 : M/s Sarda Oil Industries, Nagpur is having a branch at branch at chandrapur, Goods are
supplied to the branch at 20% profit on sales. The Branch has been instructed to send all the cash daily to tge
head office. All expenses are paid by the head office except expences which are met by the branch manager.
From the following particulars prepare, Branch account in the books off head office.
Rs.
Stock on 1stJan , 2002 15,000
Sundary Debtors on 1 st Jan. 2002 9,000
Cash in hand on 1st jan,2002 400
st
Office Furniture on 1 jan 2002 1,200
Goods invoiced from the Head Office 80,000
Goods returned from the Head Office 1,000
Goods returned by Debtors 480
Cash received from Debtors 30,000
Cash sales 50,000
Credit Sales 30,000
Discount allowed to Debtors 300
Expenses paid by head office:
Rent 1,200
Salary 2,400
Printing and Stationary 300

Illustration 17 ; the chawla co. Ltd. Nagpur is having its branch at Amaravati. Goods are invoiced to the branch
at selling prices which is cost plus 25% .branch has been jinstructed to send all the casjhdailyu to the head
office. All expenses are paid by the head office except petty expenses which are met by the branch manager.
From the following particulsars prepare branch account in the books of Chawala Co, Lid.
Nagpur:-
Stock (1stjan 2004) 10,000
Sundry Debtors (1stjan 2004) 5,600
st st
Transactiobs from 1 Jan 2004 to 31 Dec. 2004
Goods send to branch 72ss,800
Expenses incurred by branch manager 480
Credit sales 30,000
Cash sales 43,000
Head office sent a cheque to the branch for purchase of safe 5,200
Goods sent ot branch were stolen 3,500
Cash remitted to head office 60,000
Furniture purchased by branch manager 2,400
Expenses paid by the head office 6,560
Gioods returned byt the customers 1,500
Bad debts 520
Discount allowed 200
Goods returned by the branch 2,500
Stock (31st Dec. 2004) 12,000
Debtors (31st Dec. 2004) 7,200

Illustration 18 :santosh traders opened a branch at sagar on 1st July 2005 . goods are sent from the head offices
at cost plus 25%.
From the following particulars prepare branch account in the books of head office for the half year
period ending 31st Dec. 2005.

Notes By:- Lavendra Thakre(9049089325) Faculty :- Tulsi Bibhar Sir(8928465509) Page 8

 Rs.
Cheques sent to branch for :
Petty expenses 440
Rent 1,200
Advertisements 800
Salaries 4,000
Insurances (upto 30th June 2006) 300
6,740
Furniture purchased for the branch 8,000
Goods sent to branch at invoice price 1,20,000
Cash sales by branch 61,500
Credit sales during 6 months 26,000
Casah received from debtors 20,000
Discount allowed to debtors (at Invoice Price) 600
Bad debts written off 50
Petty expenses paid by the branch 650
Stock at invoice prices 32,500
Petty cash balance on 31-12-2005 440
Provide depreciation on furniture at 10% p.a.
Petty cash at branch is maintained on imprest system

Illustrations 19 :Adelhi merchant has a branch at madras to which he charges out he goods at cost plus 25% .
The madras branch deeps its own sales ledger and transmits all cash received to the head office every day. All
expenses are paid from the head office. The transactions of the branch for the year ended Dec. 31 st 2004 were as
follows :-
Rs.
Stock (1-1- 2004) (at Invoice Price) 11,000
debtors (1-1- 2004) 1,700
Petty cash (1-1- 2004) 100
Cash sales 2,650
Goods send by branch at invoice price 20,000
Collections on ledger accounts 21,000
Goods returned to H.O. 400
Allowances to customers 250
Bad debts 300
Retuerns inward 500
Cheques sent to branch :
Rent 600
Wages 200
Other expenses 900
Stock (31-12-2004) 1,700
Debtors (31-12-2004) 13,000
Petty cash (31-12-2004) including miscellaneous
Income rs 25 not remitted to H.O. 125
Prepare a branch account and trading and profit and loss account for the year ended Dec. 31.2004 in
books of
Head office.

Illustration 20 : the head office of a company invoices goods to its Narkhed branch at cost plus 20% .
thenarkhed branch also purchases independently from local parties goods for which payments are made by the
head office. The cash collected by the branch is banked on the same day to the credit of the head office except
petty expenses for the which periodical transfers are made from the head office.

Notes By:- Lavendra Thakre(9049089325) Faculty :- Tulsi Bibhar Sir(8928465509) Page 9

 From following particulars show the branch account as maintained in the head office books, reflecting
the branch profit for the year ended 31-12-2000.
Rs.
Imprestcash :
1-1-2000 2,500
31-12-2000 2,000
Sundry debtors on 1-1-2000 28,000
Stock 1-1-2000 :
Transferred from H.O. at invoice price 26,000
Directly purchased by branch 16,000
Cash sales 42,000
Credit sales 50,000
Direct purchases 1,42,000
Returns from customers 50,000
Goods sent to branch from head office invoice price
66,000
Transfer from head office for petty cash expenses 3,000
Bad debts 1,200
Discount to customers 2,500
Cash received from customers 1,30,000
Branch expenses 3,600
Stock on 31-12-2000
Transfer form head office at invoice pries 18,000
Direct purchased by branch 15,000
33,000
Illustration 21 :vidarbha traders Nagpur have a branch at tumsar. Goods are send from the head office at
cost plus 33 1/3% .from the following particulars relating to the branch for the ended 31-12-2001. Prepare
branch account in the head office books ;-
Rs.
Balances on 1-1-2001 ;-
Stock at branch at invoice price 12,000
Branch debtors 5,000
Petty cash 600
furniture 2,000
Prepaid insurance 200
Salaries outstanding 300
Goods sent to branch at invoice price 1,20,000
Cash sales during the year 1,50,000
Credit sales during the year 50,000
Cash received from debtors 40,000
Cash paid by debtors direct to head office 3,000
Discount allowed to debtors 200
Cash sent to branch fro :
Rent 2,400
Salary (Rs. 300 p.m.) 3,600
Petty expenses 1,000
Insurance ( upto 31-3-2002 ) 800
Goods returned by branch at invoice price 1,200
Goods returned by debtors 1,500
Stock on 31-12-2001 at invoice price
(books values of furniture on 1-7-2001 Rs. 475 ) 400
Provide depreciation on furniture @ 10% p.a. goods costing rs 3,000 were damaged in treansit and sum
of Rs. 2,600 was received from the insurance company in full settlement of the calim.

Notes By:- Lavendra Thakre(9049089325) Faculty :- Tulsi Bibhar Sir(8928465509) Page 10

Notes By:- Lavendra Thakre(9049089325) Faculty :- Tulsi Bibhar Sir(8928465509) Page 11
Illutration22 : Maharashtra Ltd. , of Mumbai has abranch at Nagpur.The branch does not maintain according
book to all the collection of branch are remitted to Head office.The head office Reimburses the expenses of the
branch.
Goods are invoice to branch at selling price which is cost plus 25% and the branch is not entitled
to vary this price .From the following information prepare branch account in the books of head office:
Oppning rate Closing rate

Balance at branch Rs Rs.

Stock 3,200 ?
Debtors 5000
?
Cash 400
400
Transactions during the year :-
Goods sent to Branch 40,000
Goods returned to H.O. 2,000
Credit sales at Branch 32,000
Cash sales at Branch 8,000
Cash received from customers at Branch 28,000
Bills Received accepted by Customers at Branch 2,000
Cash sent to Branch for Expenses 4,800
Shortage in stock of Branch 500
Discount allowed to Branch Customers 320

Illusration23: The Calcutta Toy Company Ltd.,has branch office at Bombay.

Show in the Bombay branch :-
(a) Trading and Profit & Loss Account
(b) Head Office Account and
(c) Balance Sheet
Also prepare Bombay Branch Account in head office books
The Trial Balance is given below:
Bombay Branch Trial Balance

On 31st Dec.,2000

Particulars Dr.(Rs.) Cr.(Rs.)

Motor Car 2,750
Furniture 720
Sundry on 1st Jan .,2,000 10,750 2,110
Purchase from H.O. 7,500
Sales 28,560
Discount Received 39,750
Cash in hand 1,310 190
Rent ,Rates & Taxes 930
Sundary Expenses 650
Depreciation 340
Carriage Inwards 820
Head Office Account 33,850
Salaries & Wages 3690
Bad Debts 320
Remittances to H.O. 16,800

Notes By:- Lavendra Thakre(9049089325) Faculty :- Tulsi Bibhar Sir(8928465509) Page 12

 Discount Allowed 760

Stock on 31st Dec.,2000Rs. 8,250

75,900 75,900

Notes By:- Lavendra Thakre(9049089325) Faculty :- Tulsi Bibhar Sir(8928465509) Page 13

Illustration 24:Branch ‘A’ has sent the following Trial Balance to Head Office:
Trial Balance on 31-12-2004
Particulars Dr.(Rs.) Cr.(Rs.)
Cash at Bank 49,000
Cash in hand 1,140
Sundary Debtors 74,000
Purchases 2,25,000
Rent &Taxes
General 6,000
Salary 9,000
Bad Debts 18,000
Fixtures & Fitting 960
Plant 3,800
Stock (1-1-2004) 46,000
Sundary Creditors 98,000
Sales 44,600
Head Office Account 3,40,400
1,45,900
5,30,900 5,30,900

Additional information:
(1) Head Office has to charge Rs. 65,500 as proportionate supervision charges on the branch.
(2) Fixed assets are tobe depreciated by 10%.
(3) Branch Manager is to get commission at 15% on profit prior to charges commission.
(4) Closing Stock was Rs. 69,500.
(5) Rs. 6,000 remitted by Branch to Head Office are in transit.
Prepare Branch Trading and Profit & Loss Account for the year ended 31 st December,2004 and Balance
Sheet as on that date.

Illustration25:A Nagpur Merchant has a Branch at Nanded .The Ledger Balances of the Branch for the year
ended 31-3-2002 were as follows:
Rs.
Intrest received 50,000
Purchases 18,000
Sales 60,000
Goods from Head Office 28,000
Creditors 2,400
Sundary Expenses 800
Bank (Dr.) 6,600
Head Office Current Account 44,000
Machinery 20,000
Stock (1-4-2001) 30,000
Debtors 8,000
Closing Stock 14,000
You get the following information from the Head Office :
(1) The Head Office sent goods to Branch Rs. 2000 on 30-3-2002,which the Branch received on 3-4-
2002.
(2) Branch Furniture Account Account stood in Head Office book,at Rs.1,600.
(3) Branch Current Account inHead Office had a debit balance of Rs. 46,000
Prepare Trading and Profit & Loss Account and Balance sheet in the branch book
afterdepreciatingbyfurniture by 5% and machinery by 10%.
Also give the branch current account in H.O.book after posting incorporating entries to the account.

Notes By:- Lavendra Thakre(9049089325) Faculty :- Tulsi Bibhar Sir(8928465509) Page 14

Illusration:26 United Ltd., of Mumbai has a branch at Amravati.The following are the Ledger balances in (Trial
balances of the branch as 31 March 2013)

Particulars DR.(Rs.) Dr.(Rs.)

Parchases 18,000 -

Debtors 8000 -
Cash in hand 6,600 -
Sales
Creditors - 60,000
Machinery
Stock on (1-4-2012) - 24,400
Interest received
Goods form head office 40,000 -
Office expenses
Head office account 30,000
Return inwards
Return outwards - 5000

28,000 -

800 -

- 44,000

4000 -

- 2,000

1,35,400 1,35,400

Other Information:
1. Stock on 31-3-2013 was RS.34,000.
2. The branch account in the head office books Rs.54,000
3. The branch furniture in head office books stood at Rs. 4,000.
4. Depreciate branch furniture and Machinery@10% p.a.
5. The head office sent goods to branch worth Rs.10,000on 28-3-2013,but the
branch received the same on 2-4-2013.
Prepare branch treading and profit&loss A\Cfor the year ended 31,March,2013
and the baiance as on the date in the books of Branch and BranchA\C in the books
of H.O.

Illustration 27: A firm whose Head Office is in Pune has Branch at Amravati. The Branch keeps its own books
and the following was the Trial Balance of these Books as 31st December 2001:
Amravati Branch Trial Balance

Notes By:- Lavendra Thakre(9049089325) Faculty :- Tulsi Bibhar Sir(8928465509) Page 15

Particulars Dr.(Rs.) Cr.(Rs.)
Cash in hand 200
Bank balance 7,000
Stock (at cost) on 1-1-2001 41,000
Dbtors& Creditors 35,000 12,000
Remitted toHead Office 60,000 1,15,200
Head Office
Shop Fittings 3,000
Motor Van 4,000
Purchase by Branch 80,000
Goods from Head Office 36,000
Sales 1,83,000
Sales Return 12,000
Rent
Salaries 5,000
Motor Expenses
Trade Expenses 15,000

2,400

96,00

3,10,200 3,10,200

Additional information:
(1) The branch Stock on 31st Dec.,2001 amounted at Rs. 32,000.
(2) Depreciating is to be provided at the rate of 5% p.a. on Shop Fitting sand 20% p. a. on Motor Van.
(3) Rs. 2,000 of Head Office salaries are to be charged to the Branch account for supervision.
(4) The Branch Manager is entitled to a commission of 1% of the net sales of the branch.
(5) Goods which cost Rs.5,000 had been forwarded by the Head Offuce to the Branch on 31-12-2001. The
transaction had been entered in the Head Office books, but no record had been made in the branch
books nor had goods been taken into stock.
Prepare to incorporate these transaction in the books of Head Ofice:
(a) Branch Trading and Profit & Loss A/c and
(b) Branch A/c
(c) Balance sheet as on 31- 12- 2001.
Illustration 28: Madras H.O. has two branches one in Bangalore and other at Cochin. The Branch keeps a
complete set of Books. On 31stdec., 2005 the Bangalore and Cochin Branch account in H.O. Books showed
debit balances of Rs.67,500 and Rs.75,000 respectively.
From the following information pass journal entries and prepare Bangalore and Cochin Branch A/c in the Books
of Madras H.O. :
(1) Goods worth R.s 75,000 were transferred from Bangalore to Cochin under instruction from H.O.in
Bangalore.
(2) Bangalore Branch paid Rs.11,250 for Priya scooter purchased by H.O. in Bangalore.
(3) Cochin Branch collected Rs.6,000 from a Cochin customer of Head Office.
(4) Goods worth Rs.14,250 were sent by H.O. to Cochin Branch on 23rd Dec., 2005 but the same was
received by Cochin Branch on 6th Jan., 2006.
(5) The Bangalore Branch received on behalf of H.O.Rs. 2,250 as Dividend from Bangalore Tyre Company,
Bangalore.
(6) Rs.9,750 remitted by Bangalore branch to Madras H.O. on 28th Dec., 2005 but the same was received on
2nd Jan ., 2006.

Notes By:- Lavendra Thakre(9049089325) Faculty :- Tulsi Bibhar Sir(8928465509) Page 16

 (7) Depreciation on Furniture and Machinery in Bangalore and Cochin Branch were written off Rs.6,000
and Rs.7,500 respectively.
(8) For the year 2005 the Bangalore branch showed net profit of Rs.12,750 and Cochin branch a net loss of
Rs.7,500.

Illustration 29: A firm in Mumbai has two branches, one at Nagpur and the other at Bhandara. The Branches
keep a complete set on 31st Dec., 2000, the Nagpur and Bhandara branch Account in Mumbai books showed
debit balances of Rs.55,000 and Rs.48,000 respectively before taking the following information into account
:
(1) Goods worth a Rs.2,000 supplied by H.O. to the Nagpur branch on 25th Dec.,2000 was received by the
latter on 2nd Jan 2001.
(2) Remittances of Rs. 3500 made by Bhandara branch to its head office on 30 th Dec., 2000 received by
head office on 4thJanuary , 2001.
(3) Goods valued of Rs. 15,000 were transferred from the Nagpur branch to the Bhandara branch under
instruction from head office.
(4) Nagpur branch paid Rs.6,000 for a machine purchased by head office in Nagpur.
(5) Provide depreciation at 10% on furniture worth Rs.15,000 when Bhandara branch Furniture A/c is
maintained in the head office books.
(6) Nagpur branch paid Rs.5,00 from a Bhandara Debtors on behalf of the Head Office.
(7) Nagpur branch draws a bills receivable for Rs.3,000 on Bhandara branch which sents its acceptance.
(8) Bhandara branch collected Rs.5,000 from a Bhandara debtors on behalf of the Head Office.
(9) The head office charged to the Nagpur branch with Rs.600 for share in the administrative services
rendered by H.O.
(10) On 31st Dec., 2000,the Nagpur showed a net profit of Rs. 18,000 and Bhandara branch a net loss
of Rs. 8000.
Pass the necessary Journal entries in the books of head office and both the branches. Also prepared Branch
A/c in the books of Head office.

Illustation 30: Hind Trading Co. with its Head Office in Delhi has a branch at Agra which obtain supplies
partly from head office at cost and partly from outside suppliers. The branch keeps a separate set of books.
On 30th June, 2000 the following trial balances were extracted:
Particular Head office Branch
Dr. Cr. Dr. Cr.
Rs. Rs. Rs. RS.

Notes By:- Lavendra Thakre(9049089325) Faculty :- Tulsi Bibhar Sir(8928465509) Page 17

 Share capital 1,50,000 _ _
Fixed assets 47,300 _ 16,000 _
Debtors and creditors 65,000 18,200 5,000 12,800
Opening Stock at 15,000 _ _ 1,800
cost _ _ 9,800 _
P&L A/c 1-7-1999 1,50,000 1,60,000 8,200 33,000
Purchases and Sales 41’000 _ 3,500 _
Sundry Expenses _ 24,300 22,500 _
Goods from H.O. to _ 2,000 _
Branch 27,800
Cash 16,200 _ _ 13,800
Current Account on
30-6-2000

3,62,000 3,62,000 59,000 59,000

Additional Information
(1) Fixed asset are to be depreciated at 20%
(2) Stock on 30th June 2000 were :
(3) Head Office Rs.45,000 and Branch Rs. 3,500
(4) Prepare the company’s Trading and Profit & Loss Account for the year ended 30 th June, 2000 and its
consolidated balance sheetas on that date . also prepare branch account in the books of Head Office.

31. A Limited Company, Delhi has a branch at Kanpur which obtains supplies party from Head Office at cost
and party form outside supplies. The branch maintains its independent set of books.
On 31st Dec. 2001, the following balance were extracted:
Head Office Brnch
Particulars Dr. (Rs.) Cr. (Rs.) Dr.(Rs.) Cr.(Rs.)
Share Capital ---- 1,00,000 --- ---
Fixed Assets 90,000 --- --- ---
Debtors 15,000 --- 4,000 ---
Creditors --- 3,000 --- 2,500
Purchases 80,000 --- 10,000 ---
Sales --- 1,10,000 --- 35,000
Goods from H.O. to Branch --- 30,000 28,000 ---
Head office account ---- --- --- 15,000
Branch Account 18,000 --- --- ---
Miscellaneous expenditures 30,000 --- 7,500 ---
Cash at bank 10,000 --- 3,000 ----
_____________________________________
2,43,000 2,43,000 52,000 52,000

1. Stock on 31st Dec. 2001 : Head office Rs. 8,100; Brnch rs. 11,400.
2. Depreciation is to be charged o Fixed Assets at 10%.

Notes By:- Lavendra Thakre(9049089325) Faculty :- Tulsi Bibhar Sir(8928465509) Page 18

 Prepare Trading and Profit and Loss a/c of the company for the yyear ended 31 st Dec. 2001 and
consolidated Balance sheet as on that date and Branch A/c in the books of H.O.

32. Following are the trial balance of X Ltd. and its Nagpur Branch:
Debit Balances Head Office Branch
Rs. Rs.
Opening Stock 45,000 16,400
Purchases 1,10,100 25,600
Wages 80,800 13,100
Manufacturing exp. 35,400 6,800
Machinery : With H.O. 1,00,000 ---
With Branch 50,000 ---
Furniture : With H.O. 5,000 ---
With Branch 2,000 ---
Rent and Salaries 38,000 14,400
Misc. Exp. 18,000 4,000
Goods from H.O. --- 14,400
Cash and Bank 10,300 1,500
Branch A/c
Debtors

Credit Balances:
Creditors
Gods to Branch
Sales
Head Office A/c
Capitl (in shares of Rs. 10 each)
Discount
Return Outward

Adjustment:-
1. Closing Stock: Head office Rs. 38,000
Branch Rs. 28,700
2. Charge depreciation on Machinery at 10% and Furniture at 15% Accounts of Machinery and Furniture
with the branch re maintained by the H.O.
3. Outdtsnfin rent for Branch is Rs. 300
4. Prepare trading and profit and loss A/c in tabular form and consolidated Balance sheet.

33. A limited company with its head office in Kolkata has a branch at Amritsar which obtains supplies prtly
from the Head office at the cost and party from other local suppliers. The Branch keeps a separate set of
books. On 31st March, 2010 the following balances were exerted:
particular Kolkata Head Office Amritsar Branch

Dr. (Rs.) Cr. (Rs.) Dr. (Rs.) Cr. (Rs.)

Share capiraal -

Notes By:- Lavendra Thakre(9049089325) Faculty :- Tulsi Bibhar Sir(8928465509) Page 19

Fixed Assets 4,31,000
Profit and loss A/c (1-4-2009) -
Debtors and creditors 1,02,600
Cash 43,200
Opening stock 86,400
Purchases and sales
Sunday expenses
Goods from Head Office tp branch
Current Accounts
Salary

Fixed asets are to be depreciated at 10% p.a. Stock on 31-3-2010 was valued at H.O. Rs. 1,08,000 and branch
/Rs. 54,000.
Prepare combined trading aand profit and loss A/c Balance Sheet for the year ended.

Notes By:- Lavendra Thakre(9049089325) Faculty :- Tulsi Bibhar Sir(8928465509) Page 20