Question

S. Ltd maintains a Branch at Kolkata to which it sends goods at cost plus 25%. Kolkata
Branch sells goods both in Cash and on Credit. All collections and cash sales are directly deposited
to Head Office Bank Account and all expenses are paid by the Head office directly.From the
following information, prepare Kolkata Branch Account in the books of the Head office
Rs.
Balances on 1.4.13:
Branch Stock at Invoice Price
30,000
Branch Debtors
40,000
Transactions during the year :
Goods sent to branch at cost
1,40,000
Goods returned by branch at Invoice Price
10,000
Goods returned by debtors to branch
3,000
Credit Sales
1,20,000
Cash Sales
30,000
Bad Debts
2,000
Discount Allowed
3,000
Abnormal Loss of goods at Invoice Price
8,000
Cheque sent by Head Office to Branch :
Rent Rs. 4,000: Salaries Rs. 6,000; Petty Expenses Rs. 2,000
Balances on 31.3.2014 :
Debtors
45,000
Stock at Invoice Price
40,000
Outstanding Rent
1.000
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Answer 1

Explanation:

goods sent ro branch (invoice price):

140000 ×25%

=140000 + 35000

=175000