Question
JK Cement Is a manufacturing company operating since 1992.It has head office in Delhi and have branch in Mumbai. It sends goods to branch at
JK Cement Is a manufacturing company operating since 1992.It has head office in Delhi and have branch in Mumbai. It sends goods to branch at 40% margin on cost price.
During FY 2019-20 Head office sent goods worth Rs 5,00,000/- to its branch at invoice price. At the time of receipt of goods from head office it had balance of Rs 1,00,000/- in its stock. Monthly expenses paid by branch are as follows :
Rent Rs 50,000/-, Salary Rs 1,00,000/-
Branch returned 15% of goods received from head office at invoice price. Branch sales stood for the year as follows :
15% Cash Sales
85% Credit Sales.
Debtors were offered 10% discount. Stock worth Rs 25,000/- was damaged by fire at branch level.
Branch do not any books of accounts at its end.
Based on above questions answer following questions
1. What will be the balance in Stock reserve account in Head office books?
2. Calculate the balance of Branch stock at the end of the year in head office books.
3. Prepare Branch debtors ledger account in head office books.
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