On 31 st March, 2024 Delhi Branch submits the following Trial Balance to its Head Office at Mumbai: Debit Balances ₹ in lacs Furniture and Equipment…
CA Intermediate · Advanced Accounting · MTP · May 2025
On 31 st March, 2024 Delhi Branch submits the following Trial Balance to its Head Office at Mumbai: Debit Balances ₹ in lacs Furniture and Equipment 36 Depreciation on furniture 4 Salaries 50 Rent 20 Advertising 12 Telephone, Postage and Stationery 6 Sundry Office Expenses 2 Stock on 1 st April, 2023 120 Goods Received from Head Office 576 Debtors 40 Cash at bank and in hand 16 Carriage Inwards 14 896 Credit Balances Outstanding Expenses 6 Goods Returned to Head Office 10 Sales 720 Head Office 160 896 Additional Information: Stock on 31 st March, 2024 was valued at 124 lacs. On 29 th March, 2024 the Head Office dispatched goods costing 20lacs to its branch. Branch did not receive these goods before 1 st April, 2024. Hence, the figure of goods received from Head Office does not include these goods. Also the head office has charged the branch 2lac for centralized services for which the branch has not passed the entry. You are required to prepare Final Accounts of the Branch including Balance Sheet.
Suggested Answer and Working Notes:
Trading and Profit & Loss Account of the Branch for the year ended 31 st March, 2024 ₹ in lacs ₹ in lacs To Opening Stock 120 By Sales 720 To Goods received from Head Office 576 By Closing Stock 124 Less: Returns (10) 566 To Carriage Inwards 14 To Gross Profit c/d 144 844 844 To Salaries 50 By Gross Profit b/d 144 To Depreciation on Furniture 4 To Rent 20 To Advertising 12 To Telephone, Postage & Stationery 6 To Sundry Office Expenses 2 To Head Office Expenses 2 To Net Profit Transferred to Head Office A/c 48 144 144 Balance Sheet as on 31 st March, 2024 Liabilities ₹ in lacs Assets ₹ in lacs Head Office 160 Furniture & Equipment 36 Add: Goods in transit 20 Less: Depreciation (4) 32 Head Office Expenses 2 Stock in hand 124 Net Profit 48 230 Goods in Transit 20 Outstanding Expenses 6 Debtors 40 Cash at bank and in hand 16 236 236
Topics: Accounting for Branches including foreign branch
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