Question
ILLUSTRATION 19.sunrise Traders is a retail trading company having its head office in Calcutta and a branch at Bombay. The selling price is determined at
ILLUSTRATION 19.sunrise Traders is a retail trading company having its head office in Calcutta and a branch at Bombay. The selling price is determined at a fixed percentage on cost price. The records maintained at the head office and the branch were incomplete. The summarised trial balance of the books of Sunrise Traders on 31-12-2014 was as follows
(1) All the goods were received by the branch from head office for resale with the exception of good purchased by the branch at 74,800 paid from branch takings before banking (2) Goods amounting to 70,000 at selling price were sent by H.O to branch during the year but these transactions were not entered in head office books
(3) Furniture is to be depreciated at 10% of the cost. (4) A commission of 10% on the net profit of the branch is payable to the Branch Manager The cat profit of the branch is to be determined after charging such commission, depreciation on branch furniture, and 7 600 payable to head office as supervision charges (5) The closing stock at H.O at cost was 35,000 and at branch at selling price was 10,200 (6) Sundry expenses for 300 were incurred by branch which were paid before sending the remittance to head office (7) On 31-12-2014 the cash in hand was 400 and debtors were 500 at the branch. You are required to prepare. (a) Trading and Profit & Loss A/c for the year ended 2014.
$ 35000 13,000 4,300 4,200 5,000 20,000 6,000 Stock as at 31-12-2013 (H.O.) Furniture (H.O.) at cost Depreciation to 31-12-2013 Furniture (Branch) at cost Profit & Loss A/c on 31-12-2013 Capital General Reserve Balance at Bank Drawings Cash received from branch Imprest at branch Debtors and Creditors Administrative expenses (H.O.) Administrative expenses (Branch) Purchases (H.O.) Sales (H.O.) 29,000 2,000 60,000 30,500 200 20,000 35,400 4,500 3,50,000 3,67,500 4,93,300 4,93,300Step by Step Solution
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