Care who carried on a retail business opened a branch Omega on January 1st, 2025 where all sales were on credit basis. All goods required by the…
CA Intermediate · Advanced Accounting · MTP · January 2026
Care who carried on a retail business opened a branch Omega on January 1st, 2025 where all sales were on credit basis. All goods required by the branch were supplied from the Head Office and were invoiced to the branch at 10% above cost. The following were the transactions: Jan. 2025 ₹ Feb. 2025 ₹ March 2025 ₹ Goods sent to Branch (Purchase Price) 60000 75000 90000 Sales as shown by the branch monthly report 57000 63000 82500 Cash received from Debtors and remitted to H.O. 30000 76500 52500 Returns to H.O. (Invoice price to Branch) 1800 900 3600 The stock of goods held by the branch on March 31, 2025 amounted to 80,100 at invoice to branch. Record these transactions in the Head Office books, showing balances as on 31st March, 2025 and the branch gross profit for the three months ended on that date. All workings should form part of your solution.
Suggested Answer and Working Notes:
Books of Care Branch Account Particulars ₹ Particulars ₹ To Goods sent to Branch A/c (2,25,000 + 10%) 2,47,500 By Goods sent to Branch-Loading 22,500 To Goods sent to Branch A/c (6,300 X 10/110) 573 By Goods sent to Branch-returns 6,300 To Stock Reserve (80,100 x 10/110) 7,283 By Bank 1,59,000 To Net Profit (Bal fig) ts/f to General P&L A/c 56,045 By Balance c/d -Closing Branch Assets Stock 80,100 Debtors (Sales-Collection) 43,500 3,11,400 3,11,400 Working Note Memorandum Branch Debtors Account Particulars ₹ Particulars ₹ To Balance b/d --- By Cash/Bank 1,59,000 To Sales 2,02,500 By Balance c/d 43,500 2,02,500 2,02,500 Goods Sent to Branch Account Particulars ₹ Particulars ₹ To Branch A/c – Loading 22,500 By Branch A/c 2,47,500 To Branch A/c – Returns 6,300 By Branch A/c – Loading on returns 573 To Purchases A/c 2,19,273 2,48,073 2,48,073
Topics: Accounting for Branches including foreign branch
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