Branch Accounting

KUNAL SIR 9871518388
( EDUCATION + PASSION = EDUPASSION )

FINANCIAL ACCOUNTING
B.COM Hons.
BRANCH ACCOUNTING
Q1. Prepare branch Account under debtor system with following information.
Balance as on 1ST Jan, 2015
Building = 2,00,000
Cash = 40,000
Debtors = 30,000
Stock = 35,000
Furniture = 1,00,000
Goods sent to Branch during the year = 3,80,000
Expenses paid by Branch = 28,000
Expenses paid by H.O = 22,000
Bad debts = 10,000
Cash sales = 2,20,000
Credit sales = 8,00,000
Collection from debtors = 6,30,000
Balances as on 31st December, 2015
Stock = 25,000
Charge depreciation @ 10% on furniture.
Q2. Opening balance of Cash = Nil

Cash sales = 40,000
Expenses paid by H.O = 20,000
Q3. Opening balance of cash = 15,000

Cash sales = 80,000
Expenses Paid by Branch = 22,000
Expenses paid by H.O. = 8,000

Q4. Opening balance of Cash = 10,000
Remittance by Branch to H.O = 2,30,000

Cash Sales = 1,40,000
Cash sent by H.O to Branch = 15,000
Expenses incurred by Branch = 22,000

Expenses incurred by Branch = 45,000
Cash sent by H.O to Branch = 12,000
Remittances by Branch = 6,70,000
Q7. Prepare branch account under debtor system.

Debtors (opening) = 40,000
Stock (opening) = 25,000
Goods sent to Branch = 7,00,000
Credit sales = 5,80,000
Goods returned to HO = 35,000
Discount allowed = 80,000
Bad debts = 2,000
Stock lost by fire = 8,000
Normal loss of stock due to spoilage = 4,000
Expenses paid by HO = 10,000
Goods are sold at a profit of 40% on sales.

Q8. The X Ltd. invoices goods to their various branches at cost and the branches sell on
credit as well as for cash. From the following details relating to the Bombay branch,
prepare the necessary accounts in the Head Office books.
Debtors, 1st January, 2011 = 26,200
Debtors, 31st December, 2011 = 31,100
Cash Balance, 1st January, 2011 = 300
Stock, 1st January, 2011 = 15,000
Stock, 31st December, 2011 = 13,900
Goods received from Head Office = 50,800
Cash received from Head Office = 1,500
Goods returned to Head Office = 700
Cash sales = 33,500
Credit Sales = 60,000
Allowances to Customers = 320
Returns from Customers = 580
Discount allowed to Customers = 2,400
Bad Debts = 600
Remittance to Head Office = 74,900
Rent and Rates = 1,800
Wages and Salaries = 6,000
General Trade Charges = 1,300
Normal loss of goods due to wastage = 1,200
Abnormal loss of goods due to pilferage = 3,000
Q9. Opening Balances at Branch as on 1 Jan 2015

Cash = 30,000
Debtors = 50,000
Stock = 20,000
Machine = 1,00,000
Creditors = 15,000
O/s rent = 5,000
Prepaid salary = 10,000
During the year:
Goods sent to Branch = ₹ 6,50,000
Cash sales = ₹ 2,00,000
Credit sales = ₹ 9,00,000
Collection from debtors = ₹ 7,80,000
Credit purchase of goods = ₹ 60,000

Expenses Paid by H.O

Rent paid @ 5,000 p.m = 65,000
Salary (including ₹ 8,000 for next year) = 70,000
Office expenses = 12,000
Insurance paid for the year ending on 31st March 16 = 12,000
Payment to creditors by H.O = 58,000
Petty expenses paid by Branch = 16,000
Closing balance of Stock = 75,000
Charge depreciation @ 10 % on Machine
Prepare Branch Account.
Q10. A Ltd. with its Head Office at Delhi has a branch at Bombay. The Branch receives all
goods from Head Office who also remits cash for all expenses. Sales are made by the
Branch on credit as well as for cash. Total Sales by the Branch for the year ended 31st
March, 2012 amounted to ₹5,60,000 out of which 20% is cash sales. The following
further information is also relevant.
1-4-2011 31-3-2012
Stock-in-Trade 25,000 36,000
Debtors 60,000 48,000
Furniture 8,000 ?
Petty Cash 120 180
Expenses actually incurred by the Branch during the year were:
Salaries = ₹ 36,000
Rent = ₹ 9,000 (up to 31stDecember 2011)
Petty expenses = ₹ 5,600
Sale of furniture on 1st October 2011 (Book value of furniture on the date of sale ₹950)
amounted to ₹900. All sales are made by the Branch at cost plus 25% Depreciation on
furniture is 10% p.a.
Prepare Mumbai Branch Account in the books of A Ltd. (Head Office) for the year ending
on 31sl March, 2012.
Q11. Hindustan Industries, Bombay has a branch in Cochin to which goods are invoiced at cost
plus 25%. The Branch sells both for cash and on credit. Branch expenses are paid direct
from Head Office and the Branch has to remit all cash received into the Head office Bank
Account at Cochin.
From the following details relating to the calendar year 2012, prepare the accounts in
the Head Office Ledger and ascertain the Branch Profit. Branch does not maintain any
books of account, but sends weekly returns to Head Office:
Goods received from Head Office at invoice price 6,00,000
Returns to Head Office at invoice price 12,000
Stock at Cochin as on 1st Jan. 2012 60,000
Sales in the year - Cash 2,00,000
- Credit 3,60,000
Sundry Debtors at Cochin as on 1st Jan, 2012 72,000
Cash received from Debtors 3,20,000
Discount allowed to Debtors 6,000
Bad Debts in the year 4,000
Sales returns at Cochin Branch 8,000
Rent, Rates, Taxes at Branch 18,000
Salaries, Wages, Bonus at Branch 60,000
Office Expenses 17,600
Stock at Branch on 31st December, 2012 at invoice Price 1,20,000
Q12. Gola Cloth Emporium has a head office in Bombay and many retail branches which are
supplied goods from head office at 25% profit on cost price. Accounts are kept at head
office from where all expenses (except petty expenses) are paid. Such petty expenses
are paid by the branches which are allowed to maintain petty cash balance of ₹ 1500 on
imprest system. From the following balances as shown by the books, prepare branch
account:
Balances as on 1 January 2011:
Petty cash at Branch 1,500
Stock in hand at Branch at sale price 32,000
Sundry Debtors at Branch 8,700
Sundry Creditors at Branch 2,500
Furniture and fixtures at Branch 7,500
Prepaid Rent 600
Transactions for the year ended 31 December 2011 were as follows:

Goods sent to Branch (less returns) 1,15,000
Cash sales at Branch 95,000
Credit Sales at Branch 65,000
Allowances to Debtors 1,200
Cash received from customers 55,000
Bad Debts to be written off 350
Cash purchases by the Branch (on permission from head office) 15,000
Cash paid to creditors 10,000
Creditors at the end 3,500

Payments made by Head Office:
Rent for one year (paid on July 1, 2011) 2,400
Salaries (paid in advance ₹500) 2,500
Insurance paid for the year ending 31 March 2012 1,800
Payments made by the Branch:

Petty expenses 1,200
Balances on December 31, 2011
Stock at cost 40,000
Provide Depreciation on furniture at 20% p.a.
Q13. X Limited invoices goods to its branch at cost plus 20%. The branch sells goods for cash
as well as on credit. The branch meets its expenses out of cash collected from its debtors
and cash sales and remits the balance of cash to head office after withholding ₹ 10,000
necessary for meeting immediate requirements of cash. On 31st March, 2011 the assets
at the branch were as follows:
₹ (,000)
Cash in Hand 10
Trade Debtors 384
Stock (at invoice price) 1,080
Furniture and fittings 500
During the accounting year ended 31st March, 2012 the invoice price of goods
dispatched by the head office to the branch amounted to ₹1crore 32 lakh. Out of the
goods received by it, the branch sent back to head office goods invoiced at ₹72,000.
Other transactions at the branch during the year were as follows:
₹ ('000)
Cash Sales 9,700
Credit Sales 3,140
Cash collected by Branch from Debtors 2,842
Cash Discount allowed to Debtors 58
Returns by Customers 102
Bad Debts written off 37
Expenses paid by Branch 842
On 1st January, 2012, the branch purchased new furniture for ₹1 lakh for which payment
was made by head office through a cheque.
On 31st March, 2012 branch expenses amounting to ₹ 6,000 were outstanding and cash
in hand was again ₹ 10,000. Furniture is subject to depreciation @ 16% per annum on
diminishing balances method. Prepare Branch Account in the books of Head office for
the year ended 31st March, 2012.

Q14. A Head Office in Calcutta has a branch in Delhi to which goods are invoiced by the Head
Office at cost. All cash received by the branch is daily remitted to Head Office. From the
following particulars, Show how the Branch Account will appear in the H.O. books.
Stock with the Branch (1-1 -2000) 60,000
Debtors (1-1-2000) 16,500
Petty Cash (1-1 -2000) 2,000
Office Furniture (1-1-2000) 10,800
Goods sent by H.O. to Branch 1,30,000
Goods received by Branch up to 31 -12-2000 1,15,000
Cheque sent to Branch:
Salaries 5,000
Rent 2,000
Other Expenses 1,500
for Petty Cash 1,000 9,500
Sales (including ₹72,000 on cash basis) 1,77,000
Cash received from Debtors 95,000
Discount allowed 1,500
Petty Expenses paid by Branch Manager 1,800
Depreciate furniture by 10% p.a.
Closing Stock could not be ascertained, but it is known that the branch usually sells at
cost plus 20 percent on cash basis and at cost plus 25% to credit customers. Prepare
Branch Account to ascertain the profit in the books of Head office.
Q15. Poonam Ltd., Mumbai has a branch in Delhi to which goods were sent at selling price,
which is fixed at 25% above cost. The branch makes both credit and cash sales. Branch
expenses are met from branch cash, balance money remitted to H.O. The branch does
not maintain double entry books of account and necessary accounts relating to branch
are maintained in H.O.
Opening Balances (as on 1-4-2011) ₹
Stock at Branch at its cost 75,000
Petty cash Balance 1,200
Office Furniture 12,000
Branch Debtors 32,000
Outstanding Salary 1,280
Following further details are given for the year ended 31st March, 2012:
Cost of Goods sent to Branch 1,80,000

Cheques sent by H.O. to Branch:
Salaries (including ₹ 600 o/s paid) 10,280
Other Office Expenses 4,600
For petty Cash 3,500 18,380
Sales made by the Branch 2,51,800
(including credit sales ₹ 1,40,000)
Theft of Stock (at invoice price) 1,700
Other Abnormal loss of Stock (at IP) 3,500
Loss in weight at IP (Normal Loss) 1,000
Cash collected from Debtors 1,23,700
Bad Debts written off 4,000
Petty Expenses paid 3,850
Office furniture purchased by branch Manager 4,500
Provide Depreciation @ 10% p.a. on furniture. You are required to prepare (a)
Memorandum Debtors A/c. (b) Memorandum Stock A/c. and (c) Branch A/c.
Q16. H.O. sends goods to its branch at cost + 25%. From the following information prepare
necessary accounts under stock and debtor system.
Opening balance at Branch
Furniture 50,000
Stock at invoice price 40,000
Debtors 60,000
Goods sent to Branch at invoice price 2,00,000
Cash sales 60,000
Credit sales 1,20,000
Cash collected from debtors 1,35,000
Bad debts 2,000
Expenses paid by Branch 4,000
Expenses paid by HO 3,000
Charge deprecation @ 10% on furniture
Q17. Prepare Branch stock Account, Branch adjustment account and Branch profit & loss
account from following information H.O sends goods to its Branch at 25% profit on cost.
Opening stock at Branch (I.P) 2,00,000
Sales (Cash basis) 4,80,000
Goods Lost by fire (I.P) 12,000
Branch expenses 6,500
Goods sent to branch 5,00,000
Q18. Assume in previous Question goods were lost due to spoilage (normal Loss). Prepare
necessary accounts.
Q19. Bombay Traders Ltd. sends goods to its Madras Branch at cost plus 25%.
The following particulars are available in respect of the Branch for the year ended 31st
March 2016:
Opening Stock at Branch (at cost to Branch) 80,000
Goods sent to Branch at invoice price 12,00,000
Loss-in-transit at invoice price 15,000
Pilferage at invoice price 6,000
Sales 12,19,000
Expenses 60,000
Closing stock at Branch (at cost to Branch) 40,000
Recovered from insurance Co. against Loss-in-transit 10,000
Show ledger accounts in the head office books for
a) Branch Stock Account
b) Goods Sent to Branch Account
c) Branch Adjustment Account
d) Branch Profit & Loss Account.
Q20. Delhi head office supplied goods to its branch at Kanpur at invoice price which is cost
plus 50%. Branch strictly sells at invoice price only. All cash received by the branch is
remitted to Delhi and all branch expenses are paid by the head office. From the
following particulars relating to Kanpur branch for the year 2016, prepare, Branch Stock
Account, Branch Debtors account, Branch Expenses Account and Branch Adjustment
Account in the books of the head office so as to find out the gross profit and net profit
made by the branch:
Stock with Branch on 1.1.2016 (at invoice price) 60,000
Branch Debtors on 1.1.2016 12,000
Petty cash balance 1.1.2016 100
Goods received from Head Office (at invoice price) 1,86,000
Goods returned to Head Office 13,000
Credit Sales less Returns 86,000
Cash received from Debtors 90,000
Discount allowed to Debtors 2,400
Expenses (cash paid by Head Office)
Rent 2,400
Salaries 24,000
Petty Cash 1,000 27,400
Cash Sales 1,04,000
Stock with Branch on 31.12.2016 54,000
(at invoice price)
Petty cash balance on 31.12.2016 320
Q21. Aakash established a retail business in Delhi several years ago and has since opened
branch shops at Mumbai, Calcutta and Chennai. All the purchasing and administration is
done at the Head Office. Branches are also allowed to purchase locally in special
circumstances. Branches sell both for cash and credit terms, but all invoices for credit
sales are sent from Delhi and payments from credit customers received there. The
branches are expected to achieve a profit of 50% on cost price. The following
information relates to the Mumbai branch for the first six months of 2016:
Opening stock of goods at branch (Cost to H.O.) 28,000
Opening Debtors 9,000
Goods received by Branch at selling price 1,80,000
Credit Sales 60,000
Cash sales 1,18,000
Transfer from other branches to Mumbai Branch at selling price 12,000
Transfer to other Branches from Mumbai at selling price 21,000
Goods returned to H.O. at selling price 6,000
Cash from Debtors received at H.O. 53,000
Bad debts written off 2,000
Goods returned by credit customers to Branch 2,400
Goods returned by credit customers to H.O. 1,200
Goods purchased by Bombay Branch from local suppliers (cost) 15,000
Expenses at the Branch 7,500
Closing stock at Branch:
From H.O. at selling price 45,000
From local purchases 3,000
Additional Information:
(i) Goods amounting to ₹ 6,000 at cost to H.O. were in transit.
(ii) Branch had on 1 January, 2016 furniture and other equipment at a book value of ₹
7,500. Depreciation at 10% p.a. is to be provided on this item.
(iii) Goods purchased locally were sold at 25% profit on sales price.
Prepare: (i) Branch Stock Account; (ii) Branch Debtors Account and; (iii) Mumbai Branch
Account. (iv)Branch adjustment account
Q22. Kali Baba of Karol Bagh, Delhi invoices goods to its Mumbai Branch at 20% less than the
list price which is cost plus 100 percent with instructions that cash sales were to be
made at invoice price and credit sales at list price. From the following particulars
available from Mumbai Branch, prepare Branch Stock A/c, Branch Debtors A/c. and
Branch Account to reveal the profit for the year ending on 31st December 2011.
Stock on 1st January 2011 at invoice Price 18,000
Debtors on (1-1-2011) 10,000
Personal Computer at Branch 50,000
Goods received from H.O. at Invoice Price 1,80,000
Cash Sales 82,000
Credit Sales 1,20,000
Goods in transit on 31st Dec 2011 10,000
Cash sent to Branch for expenses 32,000
Actual expenses at Branch 30,000
Stock at the end at Invoice Price 16,000
Bad Debts written off 400
Goods returned by customers direct to Head Office at list price 1,500
Debtors at the end 8,100
Depreciate Computers by 20% p.a.
Q23. Sonika Electronics Limited with its Head Office in Kanpur operates a retail branch at
Delhi. All purchases are made by the head office. Goods are supplied to branch at cost
only. All the branch expenses are paid by the Head Office directly with the exception of
petty expenses which are paid by branch manager out of petty cash maintained for the
purpose. You are given the following particulars relating to Delhi branch for the year
ended 31st March 2001:
Balances as on 1st April, 2000
Stock at Branch 15,900
Branch debtors 16,900
Petty Cash 110
Total sales at Branch (including ₹ 20,000 for cash sales) 73,800
Cash received from debtors 52,700
Goods sent to branch during the year 45,200
Goods returned by branch 3,500
Cash sent to Branch for expenses

Salary 11,900
Petty cash 2,600
Rent 3,900
Petty cash (as on 31/03/2001) 85
Stock (as on 31/03/2001) 18,900
Prepare a Branch Trading and Profit and Loss Account and Delhi Branch Account in the
books of Head Office.
Q24. A Delhi merchant has a branch at Mumbai to which he charges the goods at cost plus
25%. From the following particulars, determine profit under final Account system:-
Opening Stock (at IP) 75,000
Goods Sent to B.O. 2,30,000 (IP)
Goods returned by B.O. 11,250 (IP)
Cartage and freight 18,000
Rent & Taxes 8,000
Insurance 1,200
Cash sales 98,500
Credit sales 1,95,000
(Trade discount allowed ₹ 3,000)
Normal Loss of stock (at IP) 1,000
Shortage (abnormal) (at IP) 5,000
Closing stock at IP 35,625
Salaries paid 19,000
Salaries owing 300
Bad debts 2,000
Depreciation 3,500
Advertisement 8,250
Q25. A head Office send goods to its branch at 20% less than the list price. Goods are sold to
customers at cost plus 100%. From the following particulars ascertain the profit made at
the Head office and the branch on wholesale basis:
Head Office (₹) Branch (₹)
Purchases 20,00,000
Goods sent to Branch (invoice price) 8,00,000
Sales 17,00,000 8,00,000
Q26. A Head Office sends goods to its branch at 20% less than list price i.e. catalogue price.
Goods are sold to customers at cost plus 100%. From the following particulars,
ascertain the profit made at the head office and the branch on the wholesale basis for
the year ended 31st December, 2002:
HEAD OFFICE (₹) BRANCH (₹)
Opening Stock at its cost 1,69,500 40,000
Purchases 5,10,000
Goods sent to Branch (at Invoice Price) 4,80,000
Sales (at list price) 3,40,800 5,97,500
Expenses 21,000 4,500
Assume that the head office sells goods to customers at list price.

Q27. A Ltd with their Head office at Calcutta, invoiced goods to their Mumbai Branch at
invoice price. The invoice price is 20% less than the list price, which is cost plus 100%
with instruction that sales are made at list price. From the following particulars ascertain
the profit earned by the Head Office and Branch:
Calcutta H.O. Mumbai Branch
Opening Stock 40,000 32,000
Purchases 2,00,000
Goods sent to Branch (cost to H.O.) 62,500
Goods received from H.O. (invoice price) - 96,000
Sales (List price) 1,70,000 80,000
Trade Expenses 14,000 8,000
Stock at Head office are valued at cost price but those of Branch are valued at invoice
price.
Q28. Bata Limited with its head office at Delhi has a branch at Punjab. The company supplied
goods to its branch at selling price less 20%. The company as well as branch sells goods
to customers at a profit of 100% on cost. The company also sells goods to their approved
stockiest at the same price at which they are selling to their branch at Punjab. From the
following particulars, prepare Trading Account of the head office and of the branch for
the second year of their business and show the provisions for unrealized profits on stock
at the branch supplied by the head office.
Head Office Branch
Opening Stock 82,000 4,000
Purchases during the year 3,10,000 -
Goods Sent to the Branch 48,000
Goods received from the H.O. - 48,000
Goods Sold to approved stockiest 35,000 -
Goods Sold to Customers. 4,20,000 42,000
Q29. Rahul Limited operates a number of retail outlets to which goods are invoiced at
wholesale price which is cost plus 25%. These outlets sell the goods at retail price which
is wholesale price plus 20%. Following is the information regarding one of the outlets for
the year ended 31.3.97:
Stock at the outlet (1-4-1996) 30,000
Goods invoiced to the outlet during the year 3,24,000
Gross Profit made by the branch 60,000
Goods lost by fire ?
Expenses of the outlet for the year 20,000
Stock at the outlet (31 -3-1997) 36,000

You are required to prepare the following account in the books of Rahul Limited for the
year ended 31.3.97:
(a) Outlet Stock Account
(b) Outlet Profit & Loss Account
(c) Stock Reserve Account


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KUNAL SIR 9871518388

( EDUCATION + PASSION = EDUPASSION )

Q2. Opening balance of Cash = Nil

Q3. Opening balance of cash = 15,000

KUNAL SIR 9871518388

Q5. Opening balance of Cash = 20,000

Q6. Opening balance of Cash = 30,000

Q7. Prepare branch account under debtor system.

KUNAL SIR 9871518388

Q9. Opening Balances at Branch as on 1 Jan 2015

KUNAL SIR 9871518388

Expenses Paid by H.O

Transactions for the year ended 31 December 2011 were as follows:

KUNAL SIR 9871518388

Payments made by the Branch:

KUNAL SIR 9871518388

KUNAL SIR 9871518388

Cash sent to Branch for expenses

KUNAL SIR 9871518388

KUNAL SIR 9871518388

KUNAL SIR 9871518388

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