A company has three branches and their summarized accounting particulars for a period are given as follows:

Central Offi ce at (Mumbai) expenses:
Rs. 3,10,000 apportioned to branches on the basis of sales 25% of sales is taken as the Gross Profi t.
Based on the above information, prepare a comparative profi t and loss statement for the different branches. Offer your views on the contemplated closure of the branch which shows a loss assuming that in the event of closure of a branch, the Central Offi ce expenses:

(a) ill remain unaffected.

(b) Can be reduced by 30%

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Chennai Cuttack Jaipur Branches Sales Rs. Rs. Rs. Branch expenses: 9,00,000 8,00,000 14,00,000 Salaries, commission 82,000 80,000 1,20,000 and travelling expenses: Advertisement 18,000 20,000 22,000 Other expenses 20,000 22,000 24,000