Shanti Limited situated at Chennai was incorporated on 1 st April 2024. It opened two branches at Madurai and Tiruchi during the year. All goods…

1. When Goods are sent and recorded at Invoice price: In the Books of Head Office Branch Account (For the year ended 31 st March, 2025) Particulars Madurai ₹ In Lakhs Tiruchi ₹ In Lakhs Particulars Madurai ₹ In Lakhs Tiruchi ₹ In Lakhs To Goods sent to Branch A/c (at invoice price) 1,50,000 1,25,000 By Cash Account - Cash Sales 78,600 85,200 - Collection from Debtors (W.N.-1) 82,400 85,200 To Rent & Taxes A/c 3,200 4,500 By Debtors 34,500 23,600 To Salaries A/c 16,000 18,000 By Closing Stock (at invoice price) 45,000 35,000 To General Expenses A/c 2,600 1,500 By Goods sent to Branch (Stock reserve) 30,000 25,000 To Advertisement A/c 7,500 5,200 To Stock reserve A/c 9,000 7,000 To Net profit transferred to General P&L A/c 82,200 92,800 Total 2,70,500 2,54,000 Total 2,70,500 2,54,000 Note: Head Office invoices goods to the Branch at cost + 25% (i.e., 1/4 th of the cost). Thus, loading = 1/4 th on cost, which equivalent to 1/5 th on invoice price. Working Note Memorandum Branch Debtors Account Particulars Madurai ₹ In Lakhs Tiruchi ₹ In Lakhs Particulars Madurai ₹ In Lakhs Tiruchi ₹ In Lakhs To sales 1,25,200 1,10,000 By sales return 2,300 1,200 By bad debt 6,000 By Cash sales 82,400 85,200 By balance C/d 34,500 23,600 1,25,200 1,10,000 1,25,200 1,10,000 Note: As per the information provided in the question, the weekly statements sent by the branches show the stock as on 31 st March 2025 at 45,000 and - 35,000, respectively. This indicates that the closing stock figures are stated at the invoiced price. Alternative Solution 1. When Goods are sent and recorded at Cost Price: In the Books of Head Office Branch Account (For the year ended 31 st March, 2025) Particulars Madurai ₹ In Lakhs Tiruchi ₹ In Lakhs Particulars Madurai ₹ In Lakhs Tiruchi ₹ In Lakhs To Goods sent to Branch A/c (at cost price) 1,20,000 1,00,000 By Cash Account Cash Sales 78,600 85,200 Collection from Debtors (W.N.-1) 82,400 85,200 To Rent & Taxes A/c 3,200 4,500 By Debtors 34,500 23,600 To Salaries A/c 16,000 18,000 By Closing Stock (at cost price) 36,000 28,000 To General Expenses A/c 2,600 1,500 To Advertisement A/c 7,500 5,200 To net profit transferred to General P&L A/c 82,200 92,800 Total 2,31,500 2,22,000 Total 2,31,500 2,22,000 Note: Head Office invoices goods to the Branch at cost + 25% (i.e., 1/4 th of the cost). Thus, loading = 1/4 th on cost, which equivalent to 1/5 th on invoice price. Working Note Memorandum Branch Debtors Account Particulars Madurai ₹ In Lakhs Tiruchi ₹ In Lakhs Particulars Madurai ₹ In Lakhs Tiruchi ₹ In Lakhs To Sales 1,25,200 1,10,000 By sales return 2,300 1,200 By bad debt 6,000 By Cash sales 82,400 85,200 By balance C/d 34,500 23,600 1,25,200 1,10,000 1,25,200 1,10,000