VRV Ltd., Delhi has a branch in Chennai to which goods are sent @ 20% above cost. The branch sells goods at cash and credit basis. Branch expenses are met partly from H.O. and partly by the branch. Following further details are given for the year ending on Dec 31, 2008.
|
Rs |
|
|
Cost of Goods sent to Branch at cost |
1,00,000 |
|
Goods received by Branch at Invoice Price |
1,10,000 |
|
Credit Sales for the year at Invoice Price |
82,000 |
|
Cash Sales for the year at Invoice Price |
29,000 |
|
Cash remitted to H.O. |
1,11,250 |
|
Expenses paid by H.O. |
6,000 |
|
Bad Debts written off |
375 |
|
Balances as on |
|
Jan 1, 2008 |
Dec 31, 2008 |
|
|
Rs |
Rs |
|
|
Stock |
12,500 (cost) |
14,000 (Invoice Price) |
|
Debtors |
16,375 |
13,000 |
|
Cash in Hand |
2,500 |
1,250 |
Show necessary ledger accounts in the books of H.O. and calculate the profit and loss of the branch for the year ended Dec 31, 2008 under:
- Debtors Method
- Stock and Debtors Method