Tandon Commerce Academy # 1831, FF, Nirvana Society, Opp.

Ryan School, Sector 49B, Chandigarh

Phone : 098159-84228, 094654-84228
(Redefining Success- A Ladder to Ascend)

Branch Accounting Practice Questions

Dear Students. The following questions have been taken from the last 10 years’ question paper and other
different books for your Practice. Endeavour has been made to make this compilation error–free, yet
mistakes may have crept in for which I am apologetic. Suggestions are welcome for improving this
compilation from every walk of the society. Readers should feel free to write me about their queries at
my email [email protected].

1. Goods are invoiced to the newly opened branch by the Head Office at Rs.9,200 being 25% profit on cost. From
the following particulars prepare branch Profit and Loss Account and Branch Account.
Rs.
Sales by the branch 8,460
Cash remitted by the branch 8,060
Returns to Head Office 200
Expenses Paid by the Head Office 200
Furniture purchased by the Head Office for the branch 800
Stock at the end (invoice) 600
Write off Furniture at 10%
Also calculate profit by preparing branch account. [Ans : 1460]

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2. A company has its Head Office in Delhi with branches at Chandigarh and Patiala. The books are closed on 31
December. Pass adjusting entries in the books of Head Office for the following:
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i) Remittances of Rs.5,000 made by Chandigarh Branch to its Head Office on 30 December received by
Head Office in January.
ii) Depreciation amounting to Rs.1,000 on Patiala Branch fixed assets, when accounts of such assets are
maintained at the Head Office.
iii) Patiala Branch paid Rs.500 dividend to a local shareholder on behalf of the Head Office.
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iv) Goods worth Rs.8,000 dispatched by Chandigarh branch on 25 December under instructions from Head
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Office and received by Patiala Branch on 31 Dec.

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3. A Calcutta firm whose accounting year ends on 31 December has two branches one at Allahabad and the other
at Varanasi. The branches keep a complete set of books. On 31–12–1999, the Allahabad and Varanasi Branch
Accounts in the Calcutta books showed balance of Rs.30,450 and Rs.45,000 respectively before taking the
following into account :
i) Goods valued at Rs.2,000 were transferred from Allahabad branch to Varanasi branch under instruction
from the Head Office.
ii) Allahabad branch collected Rs.2,500 from an Allahabad customer of the Head Office.
iii) Varanasi branch paid Rs.5,000 for certain goods purchased by the Head Office in Varanasi.
th rd
iv) Rs.5,000 remitted by Allahabad branch to Calcutta on 29 December, 1999 were received on 3 January
following.
v) For the year 1999, the Allahabad branch showed a net loss of Rs.1,250 and the Varanasi branch a net
profit of Rs.5,400.
Pass Journal entries to record the above transactions in the books of the Head Office.

4. Give journal entries for the following transactions in the books of the Head Office.
i) Goods sent by the Head Office on December 28 worth Rs.150 to its Kanpur branch not received by the
branch upto December 31.
ii) Goods sent by Bombay branch to Kanpur branch for Rs.300 are yet to be recorded.
iii) Kanpur branch paid Rs.3,000 for a machine purchased by the Head Office for the latter.
iv) Provide depreciation at 10% on furniture when Kanpur branch Furniture Account is maintained in the
Head Office books (Furniture Rs.25,000).
Classes By RASESH TANDON [1]
(+1,+2, B.COM, CA,CS,CMA) Mobile : 98159-84228, 94654-84228
 Tandon Commerce Academy # 1831, FF, Nirvana Society, Opp. Ryan School, Sector 49B, Chandigarh
Phone : 098159-84228, 094654-84228
(Redefining Success- A Ladder to Ascend)

5. The Atlas Cycle Carriage Outwards. Has a branch at Rohtak. Goods are invoiced to the branch at cost plus 25%.
Branch is instructed to deposit cash every day in the Head Office account in the Bank. All expenses are paid by
cheque by the Head Office except petty cash expenses which are paid by the branch manager. From the
following particulars, prepare the branch account in the books of Head Office :
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Stock on 1 April, 2000 5,000
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Stock on 31 March 2001 6,000
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Sundry Debtors on 1 April, 2000 2,800
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Sundry Debtors on 31 March 2001 3,600
Cash Sales for the year 21,600
Credit Sales for the year 14,000
Cash remitted to the Head Office 30,000
Machinery purchased by the branch 2,400
Goods invoiced from the Head Office 36,400
Expenses paid by the branch 240
Expenses paid by the Head Office 3,280
Head Office sent cash to purchase safe for the branch 2,600 [Ans : 3,760]

6. Ludhiana Traders have opened a branch at Chandigarh on 1.7.1999. The goods were sent by the Head Office to
the branch and invoiced at selling price of the branch which was 125% of the cost price of the Head Office. The
following are the particulars relating to the transactions of Chandigarh Branch:
Goods sent to Branch (at Cost to Head Office) 2,80,800
Sales : Credit 1,75,000
Cash 1,25,000
Cash collected from debtors 1,56,000
Discount allowed 4,000
Cash sent to Branch for:
Freight 11,000
Wages 3,000
Other expenses 6,000 20,000
Spoiled cloth in bales written off at invoice price 500
Stock on June 30, 2000 at invoice price 55,500
Ascertain the gross profit and net profit for the Chandigarh Branch for the year ended 30–06–2000 after preparing
(i) Branch Stock Account, (ii) Goods sent to branch account, (iii) Branch Debtors Account, (iv) Branch Expenses
Account and (v) Branch Adjustment Account. [Ans : 34,600]

7. A Delhi merchant has a branch at Madras to which he supplies goods at cost +25%. The branch keeps its own
sales ledger and transmits all cash received to the Head Office every day. All expenses are paid from the Head
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Office. For the year ended 31 December 1999, the transactions of the branch were as follows :
Stock on 1–1–1999 11,000 Returns inwards 500
Debtors on 1–1–1999 1,700 Cheques sent to Branch:
Petty cash on 1–1–1999 100 Rent 600
Cash sales 2,650 Wages 200
Goods sent to Branch 20,000 Other Expenses 900
Collection on Ledger Accounts 21,000 Stock on 31–12–1999 13,000
Goods returned to Head Office 400 Debtors on 31–12–1999 2,000
Bad Debts 300 Petty cash on 31–12–1999 125
Allowances to customers 250 (Including Miscellaneous inc of
Rs.25 not remitted to Head Office)
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Prepare the Branch trading and Profit and Loss Account and Branch Account for the year ended 31 Dec.
[Ans : 8,195]
8. X Ltd. Has a retail branch at Allahabad. Goods are sent by the Head Office to the branch marked at selling price
which is cost plus 25%. All the expenses of the branch are paid by the Head Office. All cash collected by the
branch (from customers and cash sale) is deposited to the credit of Head Office Account.
Particulars Rs. Particulars Rs.
Debtors on 1.1.1999 12,000 Goods returned to Head Office at I.P. 5,000
Debtors on 31.12.1999 14,000 Salaries paid 6,000
Inventory with Branch at Invoice Rent paid 4,000
Price on 1.1.1999 16,000 Discount allowed to customers 2,000
Inventory with Branch at Invoice Bad debts written off 1,000
Price on 31.12.1999 17,000 Spoilage at Invoice Price 2,000

Classes By RASESH TANDON [2]

(+1,+2, B.COM, CA,CS,CMA) Mobile : 98159-84228, 94654-84228
 Tandon Commerce Academy # 1831, FF, Nirvana Society, Opp. Ryan School, Sector 49B, Chandigarh
Phone : 098159-84228, 094654-84228
(Redefining Success- A Ladder to Ascend)
Cash Sales during the year 60,000
Amount deposited in the Head Office A/c
During the year 1,27,000
[Ans : 11,800]

9. Alok Ltd. Invoiced goods to its Coimbatore Branch at selling price which is cost plus 25%. From the following
particulars, prepare accounts under ‘Stock and Debtors System’;
Stock at branch (1–4–99) (Invoice Price) 7,500
Branch Debtors (1–4–99) 13,100
Goods from Head Office (Invoice Price) 50,400
Cash Sales 16,750
Total Sales 50,750
Branch Debtors (31–3–2000) 16,550
Stock at branch (31–3–2000) 6,950
Allowances to debtors 160
Goods Return to Head Office 350
Goods returned by debtors 290
Discount Allowed 1,200
Bad Debts 300
Rent and Rates 900
Salaries and Wages 3,000
Trade Expenses 650 [Ans : 3,770]

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10. Calico Printers Ltd. Opened a shop at Delhi on 1 April 1999. Goods were invoiced at selling price which was
fixed by adding 25% top cost. From the following particulars relating to 1999–2000, ascertain the profit or loss
made in the year by the ‘Stock and Debtors System’.
Goods sent to branch 11,40,000
Sales– Cash 7,50,000
Credit 2,70,000
Cash received from debtors 2,22,400
Discount allowed to customers 6,600
Goods returned by customers 7,000
Cash remitted to branch for:
Rent 12,000
Salaries 60,000
Sundry expenses 7,800
Defective cloth found in bales written off 5,200
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Stock of branch on 31 March, 2000 1,22,200 [Ans : 1,12,040]

11. Indian Soap Mills Ltd. Has two branches at Agra and at Kanpur. Goods are invoiced to branches at cost +50%.
Branches remit all cash received to Head Office and all expenses are met by Head Office. From the following
particulars, prepare the necessary accounts, on the Stock & Debtors System, to show the profit earned at the
branches:
Agra Kanpur
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Stock on 1 April, 1990 (Invoice Price 9,300 15,600
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Debtors on 1 April 1990 6,800 8,700
Goods invoiced to branches (cost price) 34,000 36,000
Sales at Branches :
Cash Sales 25,010 35,000
Credit Sales 31,000 30,100
Cash collected from debtors 30,400 29,800
Goods returned by debtors 1,200 1,500
Goods returned by branch to Head Office 1,500 –
Goods transferred from Kanpur Branch to Agra Branch 2,100 2,100
Surplus of stock – 300
Shortage of Stock 450 –
Discount allowed to customers 200 350
Expenses at Branches 5,400 6,700
[Ans : 12,370 and 14,350]

Classes By RASESH TANDON [3]

(+1,+2, B.COM, CA,CS,CMA) Mobile : 98159-84228, 94654-84228
 Tandon Commerce Academy # 1831, FF, Nirvana Society, Opp. Ryan School, Sector 49B, Chandigarh
Phone : 098159-84228, 094654-84228
(Redefining Success- A Ladder to Ascend)

12. A Ltd. Has a retail branch at Kanpur. Goods are sold to the customers at cost plus 100%. The wholesale price is
cost plus 80%. Goods are invoiced to Kanpur at wholesale price. From the following particulars, find out the profit
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made at Head Office and Kanpur Branch for the year ended 31 March 2000.
Head Office (Rs.) Kanpur Branch (Rs.)
Stock on April 1, 1999 2,25,000
Purchases 21,50,000
Goods sent to branch (at invoice price) 9,54,000
Sales 28,53,000 9,50,000
Sales at Head Office are made only on wholesale basis and that at branch only to consumers. Stock at branch is
valued at invoice price. [Ans : 16,48,000 and 95,000]

13. A Head Office sends goods to branch at 20% less than the list price. Goods are sold to customers at cost plus
100%. From the following particulars, fund out the profit made at Head Office and the branch on the wholesale
basis:
Head Office (Rs.) Kanpur Branch (Rs.)
Opening Stock at cost 10,000 –
Opening Stock at invoice price – 8,000
Purchases 1,00,000 –
Goods sent to branch (at invoice price) 48,000 –
Sales 85,000 40,000
Expenses 11,000 6,000
[Ans : : 43,500 and 2,000]

14. A Head Office sends goods to its branch at 20% less than the list price. Goods are sold to customers at cost plus
100%. From the following particulars ascertain the profit made at the Head Office and branch on the wholesale
basis:
Head Office (Rs.) Branch (Rs.)
Opening Stock at Cost
(at wholesale price in case of Branch) 40,000 32,000
Purchases 2,00,000 –
Goods sent to Branch (wholesale price) 96,000 –
Sales 1,70,000 80,000
Sundry Expenses 14,000 8,000
[Ans : 95,000 and 8,000]

15. The following is the Trial balance of Kolkatta branch as on 31–3–2003. You are required to submit the journal
entries necessary to incorporate the under–mentioned figures showing the result of trading at Branch separately
in the Head Office books and to give the Kolkatta Branch Account appearing finally in the Mumbai Head Office
books.
Particulars Debit (Rs.) Credit (Rs.)
Mumbai Head Office Account 3,240
Stock (1–4–2002) 6,000
Purchases 17,800
Sales 38,000
Goods from Head Office 9,000
Goods supplied to Head Office 6,000
Salaries 1,500
Debtors 3,700
Rent 960
Creditors 1,850
Office Expenses 470
Cash in Hand 1,780
Furniture 1,400
45,850 45,850
Stock on 31–3–2003 was valued at Rs.2,700. The Branch Account in the Head Office books as on 31–3–2003
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stood at Rs.460 (Debit balance). On 28 March, the Head Office forwarded goods to the value of Rs.2,500 to the
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Branch where they were received on 3 April. Similarly a cash remittance of Rs.1,200 by branch on 29 March,
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was received by the Head Office on 1 April. [Marks 15]

Classes By RASESH TANDON [4]

(+1,+2, B.COM, CA,CS,CMA) Mobile : 98159-84228, 94654-84228
 Tandon Commerce Academy # 1831, FF, Nirvana Society, Opp. Ryan School, Sector 49B, Chandigarh
Phone : 098159-84228, 094654-84228
(Redefining Success- A Ladder to Ascend)

16. R Company of Allahabad has a branch at Delhi. The Delhi Branch not only receives goods from the Head Office
but also purchases and sells goods. It does not prepare Profit and Loss Account but closes all accounts at the
end of each year and reopens them on the advice of Head Office. The accounts of fixed assets are maintained in
the Head Office. The Head Office supplies goods at 20% profit on sale price, but the branch sends goods to Head
Office at cost price. Prepare the Branch Account, Branch Trading and Profit and Loss Account and Branch Fixed
assets account in the books of Head Office.
Balance of Head Office on 1–1–1998 15,000
Goods received from Head Office 50,000
Purchases 20,000
Opening Stock (Head Office goods at invoice price) 4,000
Opening stock of other goods 500
Salaries 7,000
Office Expenses 2,000
Rent 3,000
Cash at Bank 4,500
Sundry debtors 15,000
Sales 1,00,000
Goods sent to Head Office 3,000
Head Office Current Account 15,000
Sundry Creditors 3,000
1,21,000 1,21,000
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Following were the balances of the branch on 1 January, 1998:
Furniture Rs.,5,000 Debtors Rs.9,500; Cash at Bank Rs.1,000; Creditors Rs.30,000; Stock (Head Office goods at
invoice price) Rs.4,000; Other goods Rs.500; Closing stock at invoice price at the branch of Head Office
Rs.3,000; Closing stock of purchased goods at cost price Rs.1,000. Calculate 10% depreciation on branch fixed
assets. [Ans : 30,200]

17. Calculate the invoice price of the Goods sent to branch and the profit included therein in each of the following
alternative cases :
a) Goods sent to branch (at cost) Rs.1,20,000. Goods are invoiced to the Branch at cost plus 25%.
b) Goods sent to branch (at cost) Rs.2,40,000. Goods are invoiced to the Branch at 25% above the cost.
c) Goods sent to branch (at cost) Rs.4,80,000. Goods are invoiced to the Branch at 125% of the cost price of Head
Office.
d) Goods sent to Branch (at cost to Branch) Rs.1,20,000. Goods are invoiced to the branch to give a gross margin of
20% on sale price.
e) Goods sent to Branch (at cost to Branch) Rs.1,50,000. Goods are invoiced to the Branch at 25% above the cost.
f) Goods received from Head Office Rs.1,00,000. Goods in transit from Head Office Rs.50,000. Goods are invoiced
to the Branch at cost plus 25%.

18. M Ltd. Mumbai has a branch in Kolkata. Goods are invoiced to the branch at selling price designed to produce a
gross profit of 20% on sales. From the following data, prepare a Kolkata Branch Account for the year ending on
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31 December 20X1:
Branches as on 1 January 20X1 : Rs.
Branch Stock (at Cost to Head Office) 20,000
Branch Debtors 17,000
Branch Cash 4,000
Personal Computers 50,000
Transactions during the year
Cash Sales at Branch 1,75,000
Cash Sales at Branch 1,02,500
Goods returned to Head Office at selling price 12,500
Cash received from customers 1,57,300
Bills receivable received from debtors at branch 10,000
Discounting of bills stated above 9,800
Cash sent to branch for expenses 36,000
Actual cash expenses at branch 35,900
Shortage of stock at branch at selling price 150

Classes By RASESH TANDON [5]

(+1,+2, B.COM, CA,CS,CMA) Mobile : 98159-84228, 94654-84228
 Tandon Commerce Academy # 1831, FF, Nirvana Society, Opp. Ryan School, Sector 49B, Chandigarh
Phone : 098159-84228, 094654-84228
(Redefining Success- A Ladder to Ascend)
Cash discount allowed to branch customers 780
Sale of one personal Computer on 1.7.20X1
(Book value on the date of sale Rs.18,000) 12,000
Balances as on 31 December 20X1 :
Balance Stock (at Cost to Branch) 59,850
Branch Debtors ?
Branch Cash 9,000
Depreciation at 20% p.a. is to be provided on Personal Computers.
The Manager is entitled to commission of 10% of profit of branch after charging such commission.

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19. Linken Ltd. with a Head Office in Calcutta opened on 1 April 19X1, a branch at Kanpur where all sales were to
be made on credit basis. All goods required by the branch were supplied by the company from Calcutta and
invoiced to the branch at 20% above cost. During the year ended 31.03.20X2, the following transactions took
place:
Rs. Rs.
Goods sent to Kanpur Branch Cash received from debtors
(at cost to Head Office) 22,000 and remitted to Calcutta 15,190
Returns to Calcutta Office Debtor’s balances at branch
(at cost to Head Office) 840 written off as bad 640
Sales as shown by Kanpur
Branch report 19,670
Loss of Goods at branch through pilferage is estimated at 1% of goods received. The stock of goods held by
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Branch on 31 march 20X2 amounted to Rs.5,820 at invoiced price.
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Required Record the entries in the appropriate accounts in the Head Office Ledger showing the balances as on 31
March 20X2 and the Branch Gross Profit for the year ended on that date.

20. S.K. Bros. has a small branch at Indore. You are required to prepare Indore Branch account in the books of S.K.
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Bros. for calculating profit made at Indore Branch. Transactions during the year ended 31 March 2001 were as
follows :
Rs. Rs.
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Stock at cost as on 1 April 2000 8,000 Stock on 31 March 2001 11,000
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Furniture as on 1 April 2000 10,000 Sale of Plant on 30 September 2000 4,800
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Plant as on 1 April 2000 25,000 (Book value as date of
Goods sent to Branch at cost 75,000 sale Rs.4,500)
Cash Sales 1,22,000 Expenses paid by Head Office 6,300
Furniture purchased by It is required to write off furniture
branch with Head Office 5,000 At 10% p.a. and plant at 20% p.a.
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Permission on 1 January. 2001

21. Bata Ltd. has a Head Office and many retail branches which are supplied goods from the Head Office at 20%
profit on sales price. Account are kept at Head Office from where all expenses are paid by the branches which are
allowed to maintain petty cash balances of Rs.2,300 on imprest system. From the following balances as shown by
the books, prepare branch accounts.
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Balances on 1 January, 2000 :
Rs. Rs.
Petty cash in hand at branch 2,300 Cash purchases by the branch (on
Stock in hand at branch at sales price 50,000 permission from Head Office) 40,500
Sundry debtors at branch 24,000 Credit purchases 99,800
Sundry Creditors at Branch 11,200 Creditors at the end 23,000
Furniture and fixture at branch 28,000 Payment made by branch :
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Rent prepaid (upto 31 March, 2000) 1,300 Rent for one year (paid on 1
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Transactions for the year ended 31 April, 2000) 2,800
December, 2000 were as follows: Salaries 12,000
Goods sent to branch (Less Returns) 4,04,000 Insurance paid for the year
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Cash sales at branch 5,80,000 ending 31 March, 2000 960

Classes By RASESH TANDON [6]

(+1,+2, B.COM, CA,CS,CMA) Mobile : 98159-84228, 94654-84228
 Tandon Commerce Academy # 1831, FF, Nirvana Society, Opp. Ryan School, Sector 49B, Chandigarh
Phone : 098159-84228, 094654-84228
(Redefining Success- A Ladder to Ascend)
Credit sales at branch 95,000 Petty expenses 480
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Allowances to debtors 1,500 Balance on 31 December, 2000
Cash received from customers 80,000 Stock at Sales Price 37,500
Bad debts to be written off 1,200 Write off 10% depreciation on furniture

22. From the following particulars, prepare branch Account showing the Profit and Loss of the Branch :
Rs.
Opening stock at branch 30,000
Goods sent to branch 90,000
Sales (Cash) 1,20,000
Expenses :
Salaries 10,000
Other expenses 4,000
Closing stock could not be ascertained, but it is known that the branch usually sells at cost plus 20 per cent. The
Branch Manager is entitled to a commission of 5 per cent on the profit of the branch before charging such
commission. ]

23. D of Delhi has a branch at Calcutta. Goods are invoiced to branch at cost plus 33 1/3 %. Branch is allowed to
make sales at invoice price only. Expenses of the branch except petty expenses are paid directly by H.O. From
the following information, prepare branch account in the books of Head Office to ascertain profit of the branch.
BALANCES as on 1.1.2000
Rs. Rs.
Branch debtors 12,000 Goods returned by branch to Head Office 2,000
Petty cash 1,200 Cash remitted by branch to Head Office 74,600
Stock at invoice price 6,000 Branch Expenses :
Branch Furniture 5,000 Petty Expenses 3,400
Goods sent by head freight & cartage 4,000
office at invoice price 90,000 Bad debts 100
Cash sent by Head Office Salaries 1,500
to branch for petty expenses 2,800 Depreciation on Furniture 500
Sales – cash 40,000 Advertisement 800
– credit 36,000 Rent 2,400
Sales returns by branch debtors 1,000
Goods damaged at invoice price 1,000
(Amount received from insurance
Rs.600 by branch)

24. A Head Office has number of branches. Goods are sent to branches as cost plus mark up of 25%. Branch
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accounts are maintained on stock and debtors systems. At the Patna branch on 1 January. 2000 goods costing
Rs.24,000 were in stock but some of these goods costing Rs.1,600, had been reduced in selling price to Rs1,750.
Opening branch debtors were Rs.8,200. The following information is available relating to Patna Branch for the
year ended
Rs.
Goods sent to branch at cost 52,000
Cash sales (including all the mark down goods in the opening stock 60,000
and same other costing Rs.4,400 were sold for half of normal selling price)
Cash received from debtors 16,000
Goods return by debtors direct to Head Office 1,250
Bad debts written off 100
Closing stock at invoice price 16,000
Closing branch debtors 4,850
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Prepare various ledger accounts to ascertain profits of branch for the year ended 31 December, 2000.

25. Delhi Trading Company. Ltd. Operates a number of retail shops of its own as well as supplies goods to
independent retailers. The wholesales price is cost plus 20%, in retail shop sells the goods at 10% above the
wholesale price. Goods are invoiced to retail shop at wholesale price and it is one that basis that Profit and Loss
of each shop is calculated. From the following figures, calculate the profit made at the shop No.104.
Rs.
Classes By RASESH TANDON [7]
(+1,+2, B.COM, CA,CS,CMA) Mobile : 98159-84228, 94654-84228
 Tandon Commerce Academy # 1831, FF, Nirvana Society, Opp. Ryan School, Sector 49B, Chandigarh
Phone : 098159-84228, 094654-84228
(Redefining Success- A Ladder to Ascend)
Stock at the shop on January 1, 2000 (invoice price) 30,000
Goods sent to the shop during 2000 (cost to Head Office) 1,20,000
Sales at shop during the year 1,54,000
Shortage of goods (selling price) 660
Expenses at the shop 4,000

Wishing You All The Best

Remember You Can Do Wonders , Nobody Can Stop You From Achieving Success Except You
Get Up and Keep Going, World Is Waiting For You
— Rasesh Tandon
Believe me it’’ll work. So be ready to face such situations

Classes By RASESH TANDON [8]

(+1,+2, B.COM, CA,CS,CMA) Mobile : 98159-84228, 94654-84228