From the following particulars, prepare a branch account in head office books, showing the profit or loss of the branch: ₹ Opening stock at the branch 30,000 Goods sent to branch 90,000 Sales (cash) 1,20,000 Expenses : Salaries 10,000 4,000 Other expenses Closing stock could not be ascertained, but it is known that the branch sells at cost plus 20 per cent. The branch manager is entitled to a commission of 5 per cent on the profits of the branch before charging such commission.
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Answers
Explanation:
In this article we will discuss about the top sixteen accounting problems on Branch Accounts with their relevant solutions.
Accounting Problems on Branch Accounts
Branch Accounts: Problem and Solution # 1.
The Kanpur Shoe Company opened a branch at Delhi on 1st April 2010. From the following figures, prepare all the necessary accounts for the year ended 31st March, 2011 and Delhi Branch Account for the year ended 31st March 2012:


Branch Accounts: Problem and Solution # 2.
From following particulars relating to Patna Branch for the year ending 31st March, 2012, prepare accounts in the head office books:



Branch Accounts: Problem and Solution # 3.
Amrit Oils Ltd. open a branch at Delhi on 1st April, 2010. Goods are invoiced to the branch at cost plus 33⅓% which is the selling price. From the following particulars relating to 2010-11 and 2011-2012 ascertain the profit made at Delhi Branch in the two years. For 2010-11 give journal entries and show how the relevant items will appear in the company’s Balance Sheet as on 31st March, 2011.





Branch Accounts: Problem and Solution # 4.
Vijay Merchant of Mumbai has a branch at Poona. Goods are invoiced to the branch at cost plus 25%. Branch is instructed to deposit cash every day in the head office account with the bank. All expenses are paid through cheques by the head office except petty cash expenses which are paid by the branch manager.
Prepare Branch Account in the books of head office after taking into account the following information also:


Branch Accounts: Problem and Solution # 5.
Kanpur Cloth Mills opened a branch at Delhi on 1st April, 2011. The invoiced to the branch at selling price which was 125% of the cost to the head office.
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The following are the particulars of the transactions relating to branch during the year March, 2012:


Branch Accounts: Problem and Solution # 6.
Calico Printers Ltd. opened a shop at Delhi branch does not maintain separate books of accounts. The branch has the following assets and liabilities on 31st August, 2011, and 30th September, 2011:

During the month, Dibrugarh branch:
(a) Received by electronic mail transfer of Rs 10,00,000 from Kolkata head office;
(b) Purchased tea worth Rs 12,00,000;
(c) Sent tea costing Rs 12,30,000 to Kolkata, freight of Rs 80,000 being payable at the destination by the receiver;
(d) Spent Rs 25,000 on office expenses;
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(e) Paid Rs 3,00,000 as advance to suppliers ;
(f) Paid Rs 6,50,000 to suppliers in settlement of outstanding dues.
2012:

Goods from head office were invoiced in head e books at Rs 90,000. The Branch Account in head office books shows a debit balance of Rs 1,62,000. Convert the Nairobi trial balance and prepare the Nairobi
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