CA Inter P1 · Chapter 13 · Question 9 of 10
Case: Under the debtors system, Tanmay Ltd maintains a Branch Account. Branch data at cost: opening stock ₹40,000, opening debtors ₹25,000, goods sent by head office ₹2,00,000, cash remitted by the branch to head office (cash sales and collections) ₹2,30,000, branch expenses paid by head office ₹18,000, closing stock ₹50,000 and closing debtors ₹30,000. The branch profit is:
Test yourself: pick an answer
Reveal answer & explanation
Correct answer: B) ₹27,000
Explanation
Branch Account debit side: opening stock 40,000 + opening debtors 25,000 + goods sent 2,00,000 + expenses 18,000 = 2,83,000. Credit side: cash remitted 2,30,000 + closing stock 50,000 + closing debtors 30,000 = 3,10,000. Profit = 3,10,000 - 2,83,000 = ₹27,000.
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