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In illustration 13 - can you explain working note no 02 and then why we transfer the amount of branch stock reserve in the books of kp manufacture balance sheet
Answers (9)
Working Note 2 explains the closing stock of head office calculation The other way of solving it can be by calculating gross profit first and attaining the closing stock as balancing figure In order to calculate closing stock And the stock reserve taken in the balance sheet is with respect to the closing stock just as we have taken opening stock reserve in the trading account You can look at the gross profit calculation given in the picture 1 Closing stock of branch comes to 8060 because we have taken Goods in transit in the balance sheet with specific note
Thread Starter
Yazhini PriyaMam..then what is the meaning of inter unit accounts..and why we shown in the books of kp balance sheet asset side... actually in the illustration they are included the branch profit and inter unit accounts ...
Inter unit account is the account of branch office and head office respectively..inorder to adjust cash in transit and goods in transit
Thread Starter
Yazhini PriyaMam..On asset side the branch a/c amount that is 10404.that includes branch profit amount..
Please try to solve the problem in the method I explained once..then if u cannot solve I will solve the query.