A company has three branches and their summarized accounting particulars for a period are given as follows:

Branches Sales

Chennal
Rs.

Cuttack
Rs.

Jaipur
Rs.

Branch expenses:

9,00,000

8,00,000

14,00,000

Salaries, commission and travelling expenses:

82,000

80,000

1,20,000

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18,000

20,000

22,000

Other expenses

20,000

22,000

24,000

Central Office at (Mumbai) expenses:

Rs. 3,10,000 apportioned to branches on the basis of sales 25% of sales is taken as the Gross profit.

Based on the above information, prepare a comparative profit and loss statement for the different branches. Offer your views on the contemplated closure of the branch which shows a loss assuming that in the event of closure of a branch, the Central Office expenses:

  1. ill remain unaffected.
  2. Can be reduced by 30%