1. Advanced Financial Accounting FIN-611
Mian Ahmad Farhan
Lecture-16
Branch Accounting (Whole sale branch)

2. Question & Solution
in Word Format

3. Reconciliation Branch Book Goods in transit A/c 3,700
Head office A/c 3,700

4. Murree Branch A/c
Balance b/f
460
Balance c/f

5. Head Office A/c
Balance b/f
Balance c/f
3,240
460
Goods in transit
3,700

6. Additional Information
Advertisement expenses allocated by HO Rs. 1,000
Depreciation charged by HO on branch equipments
@10% using straight line method.

7. Journal Entry Head office Branch Branch A/c 1,000
Advertisement A/c 1,000
Advertisement A/c 1,000
Head office A/c 1,000
Provision for dep. A/c 500
Head office A/c 500
Branch A/c 500
Provision for dep. A/c 500

8. Murree Branch A/c Balance b/f Advertisement Depreciation Exp. 460
1,000
500
Balance c/f
1,960

9. Head Office A/c Balance c/f 1,960 Balance b/f Advertisement
Depreciation Exp.
460
1,000
500

10. Journal Entry (HO Book)
Incorporation of branch net profit
Murree branch A/c 20,570
Profit & Loss A/c 20,570
Incorporation of branch Assets
Murree branch goods in transit A/c 3,700
Murree branch furniture A/c 6,000
Murree branch debtors A/c 3,700
Murree branch stock A/c 7,700
Murree branch cash A/c 1,780
Murree branch A/c 22,880
Incorporation of branch Liabilities
Murree branch A/c 1,850
Murree branch creditors A/c 1,850

11. Journal Entry (HO Book)
Incorporation of branch net profit
Murree branch A/c 19,070
Profit & Loss A/c 19,070
Incorporation of branch Assets
Murree branch goods in transit A/c 3,700
Murree branch furniture A/c 6,000
Murree branch debtors A/c 3,700
Murree branch stock A/c 7,700
Murree branch cash A/c 1,780
Murree branch A/c 22,880
Incorporation of branch Liabilities
Murree branch A/c 1,850
Murree branch creditors A/c 1,850

12. Partnership

13. A B
Total
Net Profit
----
70,000
Interest on capital
10,000
20,000
(30,000)
Partner salary
24,000
(24,000)
16,000
(16,000)
Profit sharing
A 16,000 x3/5
B 16,000 x 2/5
9,600
6,400
43,600
24,600
---

14. Balance sheet Murree Branch A/c As at 31st December,2007
Liabilities
Amount
Assets
Head office
Opening balance (Cr) 460
Add profit (Cr) ,570
Creditors
21,030
1,850
Fixed Assets
Furniture
Closing stock
Debtors
Goods in transit
Cash at bank
6,000
7,700
3,700
1,780
1,960

15. Balance sheet Murree Branch A/c As at 31st December,2007
Liabilities
Amount
Assets
Balance b/f
Add Advertisement 1,000
Depreciation
Profit & Loss
Creditors
1,960
19,070
1,850
Fixed Assets
Furniture
Closing stock
Debtors
Goods in transit
Cash at bank
6,000
7,700
3,700
1,780