Question

HW 1: From the following details relating to Kolkata Branch for the year ended December 31, 2018, prepare the Branch Account in the books of Head Office. Stock on 1/1/18 Rs. Rs. Debtors on 1/1/18 15,000 30,000 Petty Cash 300 Goods sent to Branch during the Year 2,52,000 Cash Sales during the year 60,000 Credit Sale 2,28,000 Cash received from Debtors 2,10,000 Goods return by Branch 2,000 Cheque sent to Branch for Expenses: Rent & Taxes 1,500 Salary 9,000 Petty Cash Stock at Branch on 31/12/'18 1.100 11,600 Petty Cash at Branch 25,000 Debtors at Branch 200 48,000​

Answer 1

Answer:

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Explanation:

The first is to transfer all accounts to the head office account-separate entries being passed for revenue items and for assets and liabilities. The second method is to prepare the Trading and Profit and Loss Account and then to transfer the net profit or net loss to the head office account.

Branch Stock Adjustment Account is prepared at Invoice Price. The difference between the two sides of this account reveals either gross profits (if credit side to greater than the debit side) or gross loss (if debit side is greater than the credit side).