Forums
Back
branch accounting old syllabus group 2
Accountancy
practice manual question no. It says that the goods from head office are sent to branch at cost plus 10%. And all the sales by head office or by branch were made at a gross profit of 25% on their respective cost. Whether this computation is correct or that of the computation given in attachment of pm. Sales 820000/125*110 = 721600 Add shortage 20000/125*110=17600 Less goods sent. = 924000 C. S. = 184800 C. S as per pm is 208000. I am attaching both q and ans
Answers (1)
Best Answer
One given in PM is correct. You should not multiply with 110 - it should be 82000/125*100 only Sale price/125*100 will give cost at which branch received. On that later, we will apply 10/110 for calculating stock reserve for h.o. and branch as total
