PARMATMA Ltd. Delhi invoices goods to its Mumbai and Kolkata branch offices at 20% less than the list price which is cost plus 50% with instructions that cash sales are to be made at invoice price and credit sales at list price. Opening Stock at Mumbai at its cost ₹ 1,53,600. Goods Sent to Mumbai (at cost to Delhi) ₹ 2,20,000. Cash Sales ₹ 1,49,600, Credit Sales ₹ 2,90,000. Goods returned by Credit Customers to Mumbai ₹ 90,000. Goods returned by Mumbai to Delhi ₹ 72,000. Loss of Goods by fire (at invoice price) ₹ 6,000 against which 80% of cost was recovered from the insurance Company. Loss of Goods at Mumbai through normal pilferage (at list price) ₹ 6,000. Debtors at Mumbai:Opening ₹ 10,000 Cash remitted by MumbaI Branch to HO: ₹ 3,24,870. Discount Allowed to Debtors ₹ 26,730. Goods received by Mumbai till close of the year ₹ 2,54,000. Provision is to be made for discount on Debtors at 15% on prompt payments at year end on the basis of year’s trend of prompt payments. Cash remitted by HO to Branch for Expenses: ₹ 18,000 Branch Expenses still outstanding: ₹ 1,482 Manager is entitled to a commission @ 6% of net profits after charging such commission. Required: Prepare Mumbai Branch Debtors A/c, Mumbai Branch Stock Account, Mumbai Branch Adjustment A/c, Mumbai Branch Expenses Account and Mumbai Branch Profit & Loss A/c under Stock & Debtors Method.
4.PARMATMA Ltd. Delhi invoices goods to its Mumbai and Kolkata branch offices at 20% less than the list price which is cost plus 50% with instructions that cash sales are to be made at invoice price and credit sales at list price.
Opening Stock at Mumbai at its cost ₹ 1,53,600. Goods Sent to Mumbai (at cost to Delhi) ₹ 2,20,000. Cash Sales ₹ 1,49,600, Credit Sales ₹ 2,90,000. Goods returned by Credit Customers to Mumbai ₹ 90,000. Goods returned by Mumbai to Delhi ₹ 72,000. Loss of Goods by fire (at invoice price) ₹ 6,000 against which 80% of cost was recovered from the insurance Company. Loss of Goods at Mumbai through normal pilferage (at list price) ₹ 6,000. Debtors at Mumbai:Opening ₹ 10,000 Cash remitted by MumbaI Branch to HO: ₹ 3,24,870. Discount Allowed to Debtors ₹ 26,730. Goods received by Mumbai till close of the year ₹ 2,54,000. Provision is to be made for discount on Debtors at 15% on prompt payments at year end on the basis of year’s trend of prompt payments. Cash remitted by HO to Branch for Expenses: ₹ 18,000 Branch Expenses still outstanding: ₹ 1,482 Manager is entitled to a commission @ 6% of net profits after charging such commission. Required:
Prepare Mumbai Branch Debtors A/c, Mumbai Branch Stock Account, Mumbai Branch Adjustment A/c, Mumbai Branch Expenses Account and Mumbai Branch Profit & Loss A/c under Stock & Debtors Method.
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