58 If it is desired that profitability of the branch should be kept secret from the branch staff, the head office would hold back some key information from the branch, e.g., amount of opening stock, cost of goods sent to the branch, etc. The head office, in such a case would maintain a record of goods sent to the branch by passing the entry: Goods Supplied to the Branch Account Dr. To Purchases Account The value of the closing stock will also be adjusted only in head office books. In such a case, for closing its books at the end of the year, the branch will simply transfer various revenue accounts to the head office without drawing up a Trading and Profit & Loss Account On that basis, supplemented by the record of transactions maintained at the head office, it will be possible to construct the Trading and Profit & Loss Account of the branch. Illustration 16 AFFIX of Kolkata has a branch at Delhi to which the goods are supplied from Kolkata but the cost thereof is not recorded in the Head Office books. On 31st March, 2012 the Branch Balance Sheet was as follows: Liabilities Assets Creditors Balance 40,000 Debtors Balance 2,00.000 Head Office 1,68,000 Building Extension A/c closed by transfer to H.O. A/C Cash at Bank 8.000 208.000 2.08.000 During the six months ending on 30-9-2012, the following transactions took place at Delhi. Sales 2,40,000 Manager's Salary 4.800 Purchases 48,000 Collections from Debtors 1,60,000 Wages paid 20,000 Discounts allowed 8,000 Salaries (inclusive of advance Discount earned 1,200 of 2,000) 6,400 Cash paid to Creditors 60,000 General Expenses 1,600 Building Account (further 4.000 payment) Fire Insurance (paid for one 3,200 Cash in Hand 1,600 year) Remittance to H.O. 38,400 Cash at Bank 28.000 Set out the Head Office Account in Delhi hooks and the Branch Balance Sheet as on