J.K.

SHAH CLASSES CA INTERMEDIATE - ACCOUNTING

BRANCH ACCOUNTS

Q.21
In the Books of Buckingham Bros, Bombay (H.C)
Dr. Nagpur Branch A/c Cr.
To Balance b/d By Bank (Remittance) 1,65,000
Imprest Cash 2,000 By Cash – in-transit 5,000
Debtors 25,000 (Remittance not received by HO.
Stock (H.O) 24,000
Stock (Purchase) 16,000 67,000 By Bal c/d
To Bank payment for Direct purchase 45,000 Stock (Purchase) 10,000

Stock (H.O) 15,000

To Goods sent to Br. 60,000 Imprest Cash 2,000
To Bank (Trf. for petty cash) 4,000 Debtors 24,000 51,000
To Bank (Br. Expenses) 30,000
To Profit & Loss (Net Profit) 15,000
2,21,000 2,21,000

* Calculation of Collection from Debtors

Remittence Received by HO. 1,65,000

Remittence not Received by HO. 5,000
Total Cash collection by Branch 1,70,000
(-) Cash sales (45,000)
Collection from Debtors 1,25,000

Dr. Memorandum Branch Debtors A/c Cr.

To Bal b/d 25,000 By Cash/ Bank 1,25,000
To Cr. sales 1,30,000 By Sales Return 3,000
By Bad debts 1,000
By discount 2,000
By balance c/d 24,000
1,55,000 1,55,000

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Q.22 In the Books of Harrison
Dr. Branch Stock Account Cr.
Particulars ` Particulars `
To Balance b/d (25,000 +20%) 30,000 By Branch debtors 1,65,000
To Goods sent to Branch A/c 2,40,000 By Branch bank 59,000
(2,00,000 + 20%)
To Surplus* By Balance c/d:
Branch Adjustment 333 Goods in transit 20,000
Branch P & L 1,667 2,000 (2,40,000 – 2,20,000)
Stock at Branch 28,000
2,72,000 2,72,000
Goods are sold at invoice price. Excess Profit is not possible

Dr. Branch Debtors Account Cr.

Particulars ` Particulars `
To Balance b/d 35,750 By Branch P & A/c 750
To Branch stock 1,65,000 (Bad debts)
By Branch cash 1,74,000
By Balance c/d 26,000
2,00,750 2,00,750

Dr. Branch Cash Account Cr.

Particulars ` Particulars `
To Balance b/d 5,000 By Bank remittance to HO 2,22,500
To Branch stock 59,000 By Branch expenses 13,000
To Branch debtors 1,74,000 (Expenses paid by branch)

By Balance c/d 2,500

2,38,000 2,38,000

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Dr. Branch Adjustment Account Cr.
Particulars ` Particulars `
To Stock reserve By Stock reserve 5,000
Goods in transit 3,333 (25,000 × 20%)
Stock at Branch 4,667
To Gross Profit c/d 37,333 By Goods sent to Branch 40,000
By Branch Stock A/c 333
(Surplus)
45,333 45,333

Dr. Branch Profit / Loss Account Cr.

Particulars ` Particulars `
To Branch expenses 25,000 By Gross Profit A/c 37,333
To Branch debtors (Bad debts) 750 By Branch stock (Surplus) 1,667
To Net profit 13,250
39,000 39,000

Dr. Branch Expenses Account Cr.

Particulars ` Particulars `
To bank (H.O) 12,000 By Branch P & L (Transfer) 25,000
To Branch cash 13,000
25,000 25,000

Dr. Goods sent to Branch Account Cr.

Particulars ` Particulars `
To Branch adjustment 40,000 By Branch stock 2,40,000
To Purchases A/c
- Transfer 2,00,000
2,40,000 2,40,000

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Q.23 In the Books of Hindustan Industries, Mumbai
Dr. Cochin Branch Stock Account Cr.
Particulars ` Particulars `
To Balance b/d 60,000 By Branch cash 2,00,000
To Goods sent to Branch 6,00,000 By Branch debtors 3,60,000
To Branch debtors 8,000 By Goods sent to Branch 12,000
To Branch Adjustment 24,000 By Balance c/d 1,20,000
(Excess Profit)
6,92,000 6,92,000

Dr. Branch Stock Adjustment Account Cr.

Particulars ` Particulars `
To Goods sent to Branch 2,400 By Balance b/d 12,000
(1/5 × 12,000) (1/5 × 60,000)
To Branch Profit / Loss A/c 1,29,600 By Goods sent to Branch 1,20,000
(G.P) (1/5 × 6,00,000)
To Balance c/d 24,000 By Branch stock 24,000
(1/5 × 1,20,000)
1,56,000 1,56,000

Dr. Goods sent to Branch Account Cr.

Particulars ` Particulars `
To Branch stock By Branch to stock A/c 6,00,000
adjustment A/c 1,20,000 To Branch stock
To Branch stock 12,000 adjustment A/c 2,400
To Purchases A/c 4,70,400
6,02,400 6,02,400

Dr. Branch Debtors Account Cr.

Particulars ` Particulars `
To Balance b/d 72,000 By Branch cash 3,20,000
To Branch stock A/c 3,60,000 By Branch Profit / Loss A/c
Discount 6,000
Bad debts 4,000 10,000
By Branch stock A/c 8,000
By Balance c/d 94,000
4,32,000 4,32,000

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Dr. Branch Expenses Account Cr.
Particulars ` Particulars `
To Bank A/c By Branch Profit / Loss A/c 84,000
Rent Rates & Taxes 18,000 (Transfer)
Salary wages 60,000
To office expenses 6,000
84,000 84,000

Dr. Branch Profit / Loss Account for the year 31.12.11 Cr.
Particulars ` Particulars `
To Branch expenses A/c 84,000 By Branch stock
To Branch Debtors Adjustment A/c(G.P) 1,29,600
Discount 6,000
Bad debts 4,000 10,000
To Net profit transferred to
Profit / Loss A/c 35,600
1,29,600 1,29,600

Q.24
Particulars Delhi Mumbai Chennai Kolkata
A. Delhi Branch
1. Received goods 50,000 Dr 35,000 Cr 15,000 Cr
2. Sent goods 45,000 Cr 25,000 Dr 20,000 Dr
3. Received B/R 20,000 Dr 20,000 Cr
4. Sent acceptance 35,000 Cr 25,000 Dr 10,000 Dr.
B. Mumbai Branch
1. Received goods 30,000 Dr 30,000 Cr
2. Sent goods 30,000 Cr 30,000 Dr
C. Chennai Branch
1. Received goods 20,000 Cr 35,000 Dr 15,000 Cr
2. Sent cash & acceptance 15,000 Dr 22,000 Cr 7,000 Dr
D. Kolkata Branch
1. Sent goods 35,000 Dr 35,000 Cr
2. Sent cash 15,000 Dr 15,000 Cr
3. Sent acceptance 15,000 Dr 15,000 Cr
15,000 Cr 3,000 Dr 70,000 Dr 58,000 Cr
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30.04.11 Mumbai Branch A/c Dr. 3,000

Chennai Branch A/c Dr. 70,000
To Delhi Branch A/c 15,000
To Kolkata Branch A/c 58,000
(Being Incorporation of inter branch
transaction)

Q.25
Sydney Trail Balance (in `) as on 31.03.12 (`’000)
Debit Credit
Particulars Rate per Debit Credit
A$ A$
Plant & Machinery (Cost) 200 - ` 18 3,600
Plant & Machinery depreciation - 130 ` 18 2,340
Debtors / Creditors 60 30 ` 24 1,440 720
Stock (01.04.11) 20 - ` 20 400
Cash & Bank balances 10 - ` 24 240
Purchase / Sales 20 123 ` 22 440 2,706
Goods received from HO 5 - - 100
Wages & Salaries 45 - ` 22 990
Rent 12 - ` 22 264
Office expenses 18 - ` 22 396
Commission received - 100 ` 22 2,200
HO Current A/c - 7 - 120
7,870 80,86
Exchange loss (Bal. fig.) 216
8,086 8,086

Q.26
(i) Calculation of profit earned by the branch

Dr. Trading & Profit / Loss Account Cr.

Particulars ` Particulars `
To Opening stock 2,20,000 By Sales 12,00,000
To Goods received from HO 11,00,000 By Closing stock (WN) 3,60,000
To Expenses 45,000
To Net Profit 1,95,000
15,60,000 15,60,000

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(ii) Stock reserve in respect of unrealised profit
20
3,60,000  = 60,000
120

WN: Calculation of closing stock at invoice price

Opening stock at invoice price 2,20,000
Goods received during the year 11,00,000
13,20,000
(-) IP of goods sold (9,60,000)

150 - 12,00,000  120

120  12,00,000 
 - ?  150

3,60,000

Q.27
(a) Debtors Method
Dr. Delhi Branch Account Cr.
Particulars ` ` Particulars ` `
To Balance b/d: By Bank A/c:(Remittence)

Stock 7,000 Cash sales 17,500

Debtors 12,600 Cash from Debtors 28,500 46,000
Petty cash 200 19,800 By Goods sent to
To Goods sent to Branch A/c
Branch A/c 26,000 (Return to HO) 1,000
To Bank A/c: By Balance c/d:
Salaries & wages 6,200 Stock 6,500
Rent & Rates 1,200 Debtors 9,800
Sundry expenses 800 8,200 Petty cash 100 16,400

To profit / loss A/c 9,400

(Profit)
63,400 63,400

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(b)
Dr. Branch Stock Account Cr.
Particulars ` Particulars ` `
To Balance b/d 7,000 By Branch Cash 17,500
To Goods sent to By Branch Debtors 28,400
Branch A/c 26,000 By Goods sent to
To Branch Debtors 500 Branch A/c
To Branch Profit / (Return) 1,000
Loss A/c (Gross profit) 19,900 By Balance c/d 6,500

53,400 53,400

Dr. Delhi Branch Debtors Account Cr.

Particulars ` Particulars `
To Balance b/d 12,600 By Branch cash 28,500
To Branch stock 28,400 By Branch stock 500
By Allowances 200
By Discounts 1,400
By Bad debts 600
By Balance c/d 9,800
41,000 41,000

Dr. Delhi Branch Expense Account Cr.

Particulars ` Particulars `
To Bank A/c By Branch Profit / Loss A/c 10,500
Salaries & Wages 6,200
Rent & Rates 1,200
Sundry expenses 800 8,200
To Petty cash expenses 100
To Allowance to customer 200
To Discounts 1,400
To Bad debts 600
10,500 10,500

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Dr. Delhi Branch Profit / Loss Account Cr.
Particulars ` Particulars `
To Branch expenses A/c 10,500 By Gross Profit b/d 19,900
To Net Profit to General
Profit / Loss A/c 9,400
19,900 19,900

(c)
Dr. Branch Trading & Profit / Loss Account Cr.
Particulars ` ` Particulars ` `
To Stock 7,000 By Sales:
To Goods sent from Cash 17,500
HO 26,000 Credit 28,400
(-) Returns (1,000) 25,000 (-) Return (500) 27,900 45,400
To Gross Profit c/d 19,900 By Closing stock 6,500
51,900 51,900
To Salaries & Wages 6,200 By Gross profit b/d 19,900
To Rent & Rates 1,200
To Salary expenses 800
To Petty cash Exp. 100
To Allowance 200
To Discounts 1,400
To Bad debts 600
To Net Profit 9,400
19,900 19,900

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