Question

Branch's cash sale is Rs 25,000 and credit sale is Rs 45,000. If cashof Rs 50,000 is received from debtors, then in the books of H.O. branch account will be credited with -

Answer 1

The answer is Rs.75,000.

The journal entries that will be passed are

Particulars                                          Debit          Credit

Cash/bank           A/c Dr.                   25,000

            To Branch stock          A/c                        25,000

(Cash sales)

Branch debtors           A/c Dr.             45,000

            To Branch stock          A/c                       45,000

(Credit sales)

Cash/bank           A/c Dr.                    50,000

            To Branch debtors          A/c                       50,000

(Cash received from debtors)

Therefore, the branch account will be credited with Rs.75,000.

Answer 2

In this question, we are asked to tell by which amount the Head Office branch account will be credited.

• The answer is Rs.75,000.

• The journal entry for the following transaction will be-

Cash         A/c Dr.                   25,000

           To Branch stock          A/c                        25,000

(Being cash sale done by the branch)

Branch debtors           A/c Dr.             45,000

  To Branch stock          A/c                       45,000

(Being credit sale done by the branch)

Cash           A/c Dr.                    50,000

      To Branch debtors          A/c                       50,000

(Cash received from debtors)

Therefore, the branch account will be credited with Rs.75,000.

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