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51 3 Z To Balance b/d By Balance b/d Stock 30,000 Stock Reserve 5,000 Debtors 32,750 By Goods Sent to Branch A/C 40,000 Cash 5,000

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51 3 Z To Balance b/d By Balance b/d Stock 30,000 Stock Reserve 5,000 Debtors 32,750 By Goods Sent to Branch A/C 40,000 Cash 5,000 By Bank-Remittance To Goods Sent to Branch Alc 2,40,000 received from the Branch To Bank (Exp. paid by H.O.) 12,000 Cash sales 59,000 To Net Profit Transferred to 16,250 Debtors Collection 1.63.500 2,22,500 H.O. Profit and Loss A/C (Net of expense) To Balance cld (Stock reserve By Balance c/d on closing stock) 8,000 Stock (including Transit) 48,000 Debtors 26,000 Cash 2,500 3,44,000 3,44,000 Trading and Profit and Loss Account (Final Accounts) Method All items of memorandum Branch Trading and Profit and Loss Account are to be converted into cost price if the goods are invoiced to branch at selling price. Other points will remain same as already discussed in Para 5.1 for this method if goods are invoiced at cost. Illustration 8 Following is the information of the Jammu branch of Best New Delhi for the year ending 31st March, 2012 from the following: (1) Goods are invoiced to the branch at cost plus 20%. (2) The sale price is cost plus 50%. (3) Other information: Stock as on 01.04.2011(invoice price) 2,20,000 Goods sent during the year(invoice price) 11,00,000 Sales during the year 12,00,000 Expenses incurred at the branch 45,000 Ascertain () the profit earned by the branch during the year. (ii) branch stock reserve in respect of unrealized profit

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