13.

82 ACCOUNTING

Sales 360
Head Office 80
448

Additional Information:
Stock on 31st March, 20X2 was valued at ` 62 lacs. On 29th March, 20X2 the Head
Office dispatched goods costing ` 10 lacs to its branch. Branch did not receive
these goods before 1st April, 20X2. Hence, the figure of goods received from Head
Office does not include these goods. Also, the head office has charged the branch
` 1 lac for centralized services for which the branch has not passed the entry.
You are required to:
(i) Pass Journal Entries in the books of the Branch to make the necessary
adjustments
(ii) Prepare Final Accounts of the Branch including Balance Sheet, and
(iii) Pass Journal Entries in the books of the Head Office to incorporate the whole
of the Branch Trial Balance.
Question 7
M/s Marena, Delhi has a branch at Bangalore to which office goods are invoiced at
cost plus 25%. The branch sells both for cash and on credit. Branch Expenses are
-
- -

paid direct from head office and the Branch has to remit all cash received into the
-

-
-
-
-
Head Office Bank Account.
- I

From the following details, relating to calendar year 20X1, prepare the accounts in
the Head Office Ledger and ascertain the Branch Profit under Stock and Debtors
Method’.
Branch does not maintain any books of account, but sends weekly returns to the
Head Office.
`
- Goods received from Head Office at invoice price 45,00,000
-
E E
- Returns to Heads Office at invoice price
n
-
-
-
90,000
-
-

-Stock at Bangalore as on 1st January, 20X1

- -
->
IP 4,50,000
-
-
- -

Sales during the year - Cash 15,00,000

-

- e
- n -
-

- Credit -
27,00,000
-
-

Sundry Debtors at Bangalore as on 1st January, 20X1

v 5,40,000
-
-
-

© The Institute of Chartered Accountants of India

 CA INTERMEDIATE
Bu stock
OS 450000
-S

To GSTB
,
3600000
-
By GSTB .

&
72000

To,
br adj 900000
By bu ad 18000

By bank (110)
,
- ↑

To bu debtors
,
.
60000 ,
1500000
-
-

By budebtors
,
2700000
-

To br .
.

adj 180000
-
CS 900000
-

- -

Br Debtors
·

OB S20000
-

To br Stock
,
.
2100000
↑ - By , bank (110) 2400000
-

By .br .
P2L 45000
&

11 11 30000
S

By .
br stock 60000
&

CB TO50O
--
- =
Br istment
.

Ad
bid
By balance
, 90000 &

To bustock
,
brstock 18000
-

By 900000
-

180000
By ,
Dr stock - -

To balance 4d
,
180000
-

To br P2L
,
.
972000
-
-
· -
- -

Bu P2L
.

To Dr.debtors 45000
By br adj 974000
.
,
,
-
-

To .
I 11 30000
-

To ,
(10) Bank 135000
-
-

To (10) Bank .
450000 1

To , (10) Bank 45000

To ,
P2L(40) -
-
-
267000
-
-

GSTB
To br stock 72000
By br stock 3600000
·

.
, &
& ↑

To , (40) Trading 3528000

-

- -
- -

2 L IP
100 25 125

3600000 900000 4500000

1 -
I ↑
↳

7000 18000 90000

/ -
-

360 90000 450000

CA Tejas Suchak
000
,
-

120000 180000 900000 I