J McFarlane Ltd has a branch in Perth at which a full set of books is kept. At the end of the year the following summary is compiled of the transactions between the branch and headquarters as recorded in the latter’s books:

£

Balance due from branch 1 April 120,960 Cash received from branch 180,000 Goods supplied to branch 138,960 Goods returned by branch 2,400 Expenses paid on behalf of branch 22,000 At 30 September the branch profit and loss account showed a net profit of £84,000 for the six months.

(a) Show the above items as they would appear in the ledger of the head office.

(b) How can any resulting balance from these figures be proved, and what does it indicate?