M/s Shrikant operates a number of retail outlets to which goods are invoiced at wholesale price which is cost plus 25%. These outlets sell the goods…

CA Intermediate · Advanced Accounting · MTP · September 2026
M/s Shrikant operates a number of retail outlets to which goods are invoiced at wholesale price which is cost plus 25%. These outlets sell the goods at the retail price which is wholesale price plus 20%. Following is the information regarding one of the outlets for the year ended 31.3.2026: Stock at the outlet 1.4.2025 ₹ 45,000 Goods invoiced to the outlet during the year ₹ 4,86,000 Gross profit made by the outlet ₹ 90,000 Goods lost by fire ? Expenses of the outlet for the year ₹ 30,000 Stock at the outlet 31.3.2026 ₹ 54,000 You are required to prepare the following accounts in the books of M/s Shrikant for the year ended 31.3.2026: [a] Outlet Stock Account [b] Outlet Profit & Loss Account

Suggested Answer and Working Notes:

Outlet Stock A/c Particulars ₹ Particulars ₹ To balance b/d 45,000 By Sales (90,000/20 × 120) 5,40,000 To Goods sent at outlet 4,86,000 By goods lost (balancing figure) 27,000 To Gross Profit 90,000 By balance c/d 54,000 6,21,000 6,21,000 Outlet Profit and Loss A/c Particulars ₹ Particulars ₹ To Expenses 30,000 By Gross Profit 90,000 To Goods lost 27,000 To Net Profit (balancing figure) 33,000 90,000 90,000

Topics: Accounting for Branches including foreign branch

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