Question

S Account in the books of X and Hire Purchaser's Account and Goods
ICU Account in the books of Y Also Show the Items related to Hire Purchase in the Balance Sheet of X as at 31st
March, 2020. (4+4+4+4+2.33=18.33 Marks]
4.PARMATMA Ltd. Delhi invoices goods to its Mumbai and Kolkata branch offices at 20% less than the list price which is cost
plus 50% with instructions that cash sales are to be made at invoice price and credit sales at list price.
Opening Stock at Mumbai at its cost * 1,53,600.
Goods Sent to Mumbai (at cost to Delhi) 2,20,000.
Cash Sales 1,49,600, Credit Sales < 2,90,000.
Goods returned by Credit Customers to Mumbai 90,000.
Goods returned by Mumbai to Delhi 2 72,000.
Loss of Goods by fire (at invoice price) 6,000 against which 80% of cost was recovered from the insurance Company.
Loss of Goods at Mumbai through normal pilferage (at list price) 6,000.
Debtors at Mumbai:Opening 10,000
Cash remitted by Mumbal Branch to HO: 3 3,24,870.
Discount Allowed to Debtors * 26,730.
Goods received by Mumbai till close of the year 3 2,54,000.
Provision is to be made for discount on Debtors at 15% on prompt payments at year end on the basis of year's trend of prompt
payments.
Cash remitted by HO to Branch for Expenses:
18,000
Branch Expenses still outstanding:
* 1.482
Manager is entitled to a commission @ 6% of net profits after charging such commission.
Required: Prepare Mumbai Branch Debtors A/c, Mumbai Branch Stock Account, Mumbai Branch Adjustment A/c, Mumbai
Branch Expenses Account and Mumbai Branch Profit & Loss A/c under Stock & Debtors Method.​

Answer 1

Answer:

We know that the basis for accounting in the books of the hire purchaser is the total cash price.