The H.O. of a business and its branch keep their own books and each prepares its own Profit and Loss Account. The following are the balances appearing in the two sets of books as on Mar 31, 2009 after ascertainment of profit and after making all adjustments except those referred to below:
|
Particulars |
H.O. |
Branch |
||
|
Dr. (Rs) |
Cr. (Rs) |
Dr. (Rs) |
Cr. (Rs) |
|
|
Capital |
2,00,000 |
|||
|
Fixed Assets |
72,000 |
32,000 |
||
|
Debtors and Creditors |
15,640 |
7,920 |
9,680 |
3,840 |
|
Profit and Loss A/c |
29,320 |
6,120 |
||
|
B.O. A/c |
59,720 |
|||
|
H.O. Account |
56,040 |
|||
|
2,37,240 |
2,37,240 |
66,000 |
66,000 |
|
Set out the Balance Sheet of the business as on Mar 31, 2009 and the Journal entries necessary (in both sets of books) to record the adjustments dealing with the following:
- On Mar 30, 2009, the branch had sent a cheque for Rs 2,000 to the H.O., neither received by H.O. nor credited to branch A/c till Apr 5, 2009.
- Goods valued at Rs 1,680 had been forwarded by the H.O. to the branch and invoiced on Mar 28, 2009, but were neither received by the branch nor dealt with in branch’s books till Apr 9, 2009.
- The profit shown by the branch to be transferred to the H.O. books.
- Branch assets and liabilities are to be recorded in the H.O. books.