Branch account managing directors salary wages

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BRANCH ACCOUNT Managing Director’s salary Wages & salaries Rent Office Expenses Commission receipts Branch / H.O. current A/c Total 50 100 25 800 5,600 12 275 5,600 18 6 - 280 100 15 280 The following information is also available: (1) Stock as at 31.1.2013 Delhi Rs. 2,00,000 New York - $ 10 (all stock received from Delhi) (2) Head office always sent goods to the branch at cost plus 25% (3) provision is to be made for doubtful debts at 5% (4) Depreciation is to be provided on Building at 10% and on Building at 10% and on plant and Machinery at 20% on written down values. You are required. ( a) To convert the Branch Trial balance into rupees, using the following rates of exchange Opening Rate 1$ = Rs. 50 Closing rate 1$ = Rs. 55 Average rate 1 $ = Rs,. 52 For fixed assets 1$ = Rs. 45 (b) To Prepare the Trading and Profit & Loss Account for the year ended 31 st March, 2013, showing to the extent possible, Head office result and branch results separately. ABCD Ltd. New York Branch Trial Balance (As on 31 st March, 2013) ( $ ‘000 (Rs’000) Particular Dr. Cr. Conversion rate per $ Dr. Cr. Plant & Machinery (cost) Plant & Machinery Dep. Reserve Trade receivable / payable Stock (1.4.2012) Cash & Bank Balances Purchase /sales 100 60 25 4 25 20 20 125 Rs. 45 Rs. 45 Rs. 55 Rs. 50 Rs. 55 Rs, 52 4,500 3,300 1,250 220 1,300 900 1,100 6,500
BRANCH ACCOUNT Goods received from H.O 30 1,500 Wages & Salaries Rent Office expenses Commission Receipts H.O. Current A/c Exchange loss (bal. fig) 18 6 12 100 15 Rs. 52 Rs. 52 Rs. 52 Rs. 52 936 312 624 13942 558 14,500 5,200 800 14,500 14,500 (b) Trading and Profit & Loss Account For the year ended 31 st March, 2013 H.O. Branch Total H.O. Branch Total To Opening stock To purchase To Goods receive form Head Office To wages & salaries To Gross Profit c/d To Rent To Office expenses To Provision for doubtful Debts @ 5% To Deprecation(W.N.1) To Balance c/d To Exchange loss To Managing dire ctor’s Salary To balances c/d 250 275 - 100 1675 2,300 - 25 25 380 1520 1950 1250.00 1300.00 1500.00 936.00 1514.55 6500.55 312.00 624.00 165.00 720.00 4893.55 1500.00 1575.00 1500.00 1036.00 3189.55 8800.55 312.00 649.00 190.00 1100.00 6413.55 8664.55 558.00 50.00 5870.44 6478.44 By Sales By Goods Sent to Branch Closing stock By Gross profit b/d by Commission receipt By Balance b/d By Branch stock Reserve (W.N.2) 6600 1500 200 2300 1675 275 1950 500.00 - 0.55 6,500.55 1514.55 5200.00 6714.55 7,100.00 1500.00 200.55 3800.55 3189.55 5475.00 8664.55 6413.55 64.89 6478.44 Working Notes: (1) Calculation of Deprecation (in ‘000) Particular H.O Rs. Branch Rs. Building Cost Less: Dep. Reserve WDV 1,000 (200) 800
BRANCH ACCOUNT Deprecation @ 10% (A) Plant & Machinery Cost Less: Dep. Reserve WDV Depreciation @ 20% (B) Total Depreciation (A+B) 80 2,000 (500) 1,500 300 380 4500 (900) 3,600 720 720 (2) Calculation of Additional Branch Stock Reserve (Rs. in ‘000) Particulars (Rs.) Closing stock of Branch Reserve on closing stock (0.55 x 1/5) Less: Branch stock reserve (as on 1.4.2012) Reversal of stock Reserve 0.55 0.11 (65) (64.89) QUESTION NO 58 On 31 st December, 2012 the following balances appeared in the books of Chennai Branch of an English firm having its HO office in New York: Amount in Rs. Amount in Rs. Stock on 1 st Jan. 2012 Purchases and sales Debtors and Creditors Bills Receivable and payable Salaries and wages Rent, Rates and Taxes Furniture Bank A/c 2,34,000 1562500 765,000 204,000 1,00,000 1,06,250 91,000 8,68,650 2343750 510000 178500 New York Account - 599150 3631400 3631400 Stock on 31 st December 2012 was 6,37,500.

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