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5.A trader having his Head office at Delhi supplied goods to his Branch at pune at cost.

The Branch sells the goods for cash ,credit and remit(pay ) the proceeds (profits ) to
Head office regularly .The branch expenses are met by the Head office .
Following transaction relate to the branch for the year ended relate to the branch for the
year ended 31st march 2003. Prepare branch A/c for the yrs end in the books of H.O.
Particular Amount Particular Amount
Opening balance : Discount allowed 2,00,000
Branch stock 6,00,000 Bad debt written off 1,00,000
Branch Debtors 8,00,000 Cash sent by the H.O. towards
Transaction during the year : the Branch expenses :
Goods sent to branch 45,00,00 Salaries 5,00,000
Cash sales by the Branch 0 Rent 2,50,000
Credit sales by Branch 22,00,00 Petty expenses 50,000
Return from the customer 0 Closing balance:
Collection form the customer 52,00,00 Branch stock 9,00,00

6.Followinginformation is given to you from the books of shivam law agency for its
branch at Virar for the financial year 1995-96.Prepare Virar branch A/c in the books of
shivam law agency.
Particular Amt Particular Amt
Balance as on 01.04.1995: Credit sales 3,600
Branch debtors 1,200 Insurance claim received by Br. 600
Stock 600 Cash received by debtors’ 2,400
Cash 100 Discount allowed 480
Balance as on 31.03.1995: Bad debts 520
Branch debtors ? Goods returned by debtors’ 100
Cash 600 Branch Expenses paid by H.O.:
Stock 1000 salaries 320
Transaction during 1995-96: advertisement 780
Goods sent by H.O. 7,800 Amount remitted by the branch
Cash sent by H.O. 2,000 to head office 8,460
Goods lost by branch 750


Some times head office does not want to make known profitability and cost of goods
sent to branch. In such a case, goods are sent to branch at a price higher than cost ,such
price is called as “INVOICE PRICE” . Invoice price is also known as “ selling price”.
Invoice price includes cost and some % of profit .
When goods are sent to branch by H.O. at invoice price , the following are valued at
Invoice price :
1. Opening stock & closing stock
2. Goods sent to branch and goods returned by branch
when above transactions are valued at invoice price , the amount of profit included
therein recorded in branch A/c.
In the books of head office
Particulars Amt Particulars Amt
To opening stock(I.P.) xxxBy stock reserve (load in opening
stock) xxx
To goods sent to branch (I.P.) xxx By goods sent to branch (Load) xxx
To goods return to Head By goods return to Head
office(Load) xxx office(I.P.) xxx
To closing stock(load) xxx By closing stock(I.P.) xxx
7. Madras H.O. had a Branch at Mumbai to which goods are Invoice at cost Plus 20%.
From the following information prepare Branch account in the books of head office .
Particular Amt Particulars Amt
Goods sent to branch at Branch Dr’s (opening ) 24,000
invoice price 2,11,872 Branch stock (opening) 7,680
Total sales 2,06,400 Branch stock (Closing ) 13,440
Cash sales 1,10,400 Branch Dr’s (closing ) ?
Cash received from Dr’s 88,000

8. “X” ltd has a branch at nashik to which goods are invoice at cost Plus 25%. The
following information is supplied to you for 1997.
Particulars Amt Particular Amt
Stock on 1.1.1997 30,000 Discount allowed to debtors 1,600
Debtors on 1.1.1997 20,000 Cash remitted to branch for
Petty cash on 1.1.1997 160 expenses 16,000
Goods sent to branch (cost ) Petty cash at Br. On 31.12.97 180
Sales -Cash 52,000 Stock on 31.12.1997 24,000
Credit 72,000 Liabilities for the expenses on
Cash received from debtors 68,400 31.12.97 500

9. From the following details prepare Mumbai branch account for the six months ended
31st December, 1995 after depreciating branch furniture at 20% per annum :-
Particulars Amounts Particulars Amount
Opening Branch Assets Remittance received from the 2,32,800
Branch Stock 20,000 Branch
Branch Petty Cash 6,000 Closing Branch Assets:
Branch Furniture 26,000 Branch Stock 24,000
Branch Debtors 30,000 Branch Petty cash 4,000
Opening Branch Liabilities: Branch Debtors 34,000
Branch outstanding expenses 1,000 Closing branch Liabilities:-
Goods sent to the Branch 1,80,000 Branch Outstanding Salaries 1,400
Petty Cash sent to the Branch 16,000
Branch expenses paid by the
Head office 34,000
10. Mandar Chemicals (P) Ltd. has a branch at Patna. Goods are invoiced to the Branch
at cost plus 30%. From the following details prepare Branch Account.
Particulars Amounts Particulars Amount
Stock on 1.1.1996 26,000 Goods returned by Branch Debtors 3,000
Debtors on 1.1.1996 50,000 to Branch
Cash – n – hand on 1.1.1996 250 Total Sales of the Branch 2,23,000
Goods sent to Patna Branch 1,30,000 Cash sales 1,70,000
Cheque sent to branch :- Expenses paid by Branch 23,000
a. Salary 3,000 Collection from Debtors 84,000
b. Rent 2,000 Closing Stock on 31.12.1996 1,04,000
Furniture purchased by H.O for 10,000 Cash Balance on 31.12.1996 130
the Branch Depreciation Furniture by 10 %
Goods returned to H.O. 6,500