Lesson Notes By Weeks and Term - Senior Secondary 3
Branch account II
Branch account II
Term: 1st Term
Week: 12
Class: Senior Secondary School 3
Age: 17 years
Duration: 40 minutes of 2 periods each
Date:
Subject: Financial accounting
Topic:- Branch account II
SPECIFIC OBJECTIVES: At the end of the lesson, pupils should be able to
INSTRUCTIONAL TECHNIQUES: Identification, explanation, questions and answers, demonstration, videos from source
INSTRUCTIONAL MATERIALS: Videos, loud speaker, textbook, pictures
INSTRUCTIONAL PROCEDURES
PERIOD 1-2
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PRESENTATION |
TEACHER’S ACTIVITY |
STUDENT’S ACTIVITY |
|
STEP 1 INTRODUCTION |
The teacher reviews the previous lesson on branch account |
Students pay attention |
|
STEP 2 EXPLANATION |
She describes the format of branch account |
Students pay attention and participates |
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STEP 3 DEMONSTRATION |
She solves some exercises on branch account |
Students pay attention and participate
|
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STEP 4 NOTE TAKING |
The teacher writes a summarized note on the board |
The students copy the note in their books |
NOTE
BRANCH ACCOUNT
EXAMPLES
Buckingham Bros, Bombay have a branch at Nagpur. They send goods at cost to their branch at Nagpur. However, direct purchases are also made by the branch for whichpaymentsaremadeatheadoffice.Allthedailycollectionsaretransferred from the branch to the head office.
From the following, prepare Nagpur branch account in the books of head office by Debtors method:
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|
` |
|
` |
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Opening balance(1-1-20X1) Imprest Cash |
2,000 |
BadDebts |
1,000 |
|
SundryDebtors |
25,000 |
DiscounttoCustomers |
2,000 |
|
Stock:TransferredfromH.O. |
24,000 |
RemittancestoH.O. |
|
|
DirectPurchases |
16,000 |
(recd.byH.O.) |
1,65,000 |
|
CashSales |
45,000 |
remittancestoH.O. |
|
|
CreditSales |
1,30,000 |
(notrecd.byH.O.sofar) |
5,000 |
|
DirectPurchases |
45,000 |
BranchExp.directlypaid by H.O. |
30,000 |
|
ReturnsfromCustomers |
3,000 |
Closing Balance (31-12- 20X1) |
|
|
Goodssenttobranchfrom H.O. |
60,000 |
Stock:DirectPurchase |
10,000 |
|
TransferfromH.O.forPetty |
4,000 |
TransferfromH.O. |
15,000 |
|
Cashexpenses |
|
Debtors |
? |
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|
|
ImprestCash |
? |
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|
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PettyCashexpenses |
4,000 |
Solution
In the Books of Buckingham Bros, Bombay Nagpur Branch Account
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` |
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` |
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To Opening Branch |
40,000
25,000
2,000
60,000
45,000
30,000 4,000
15,000 |
By Bank – Remittances receivedfrom branch CashSales
Cash from Debtors Cash from Debtorsintransit By Stock: Transfer from H.O.
Direct Purchase By Sundry Debtors (W.N.2) By Imprest Cash (W.N. 3) |
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|
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Assets |
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|
||
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Stock (24,000+16,000) |
45,000 |
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||
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Debtors |
1,20,000 |
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||
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ImprestCash |
5,000 |
1,70,000 |
||
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To Goods sent to Branch A/c |
|
15,000 |
||
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To Creditors (Direct |
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|
||
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Purchases) |
|
|
||
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To Bank(Sundryexp.) |
|
10,000 |
||
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To Bank (Petty cash exp.) |
|
24,000 |
||
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To NetProfittransferred |
|
2,000 |
||
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toGeneralProfit& |
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|
||
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LossA/c |
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||
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|
2,21,000 |
|
2,21,000 |
WORKING NOTE
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|
` |
|
Totalremittances(`1,65,000+`5,000) |
1,70,000 |
|
Less:Cashsales |
(45,000) |
|
|
1,25,000 |
|
|
` |
|
OpeningBalance |
25,000 |
|
Add:CreditSales |
1,30,000 |
|
Less: Returns, Discount, Bad debts & collections (3,000 + 2,000 +1,000 + 1,25,000) |
1,55,000 |
|
(1,31,000) |
|
|
Closingbalance |
24,000 |
|
|
` |
|
OpeningBalance |
2,000 |
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Add:TransferfromH.O. |
4,000 |
|
|
6,000 |
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Less:Expenses |
(4,000) |
|
Closingbalance |
2,000 |
EXAMPLE 2
From the information given in the Example 1, prepare Nagpur Branch Trading and Profit and Loss Account in the books of head office.
SOLUTION
Buckingham Bros. Bombay
Nagpur Branch-Trading and Profit and Loss Account for the year ending 31st December, 20X1
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|
|
` |
|
|
` |
` |
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To |
OpeningStock |
40,000 |
By |
Sales |
|
|
|
To |
Goods transferred from Head Office |
60,000 |
|
Cash Creditsales |
45,000 1,30,000 |
|
|
To |
Purchases |
45,000 |
|
|
1,75,000 |
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|
To |
GrossProfitc/d |
52,000 |
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Less:Returns |
(3,000) |
1,72,000 |
|
|
|
|
By |
ClosingStock |
|
25,000 |
|
|
|
1,97,000 |
By |
|
|
1,97,000 |
|
To |
Expenses |
30,000 |
GrossProfit |
52,000 |
||
|
To |
Discounts |
2,000 |
b/d |
|||
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To |
BadDebts |
1,000 |
|
|||
|
To |
PettyCashExpenses |
4,000 |
|
|||
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To |
NetProfittransferred to General P&L A/c |
15,000 |
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|||
|
|
|
52,000 |
|
|
52,000 |
|
EVALUATION:
The Bombay Traders invoiced goods to its Delhi branch at cost. HeadOffice
paid all the branch expenses from its bank account, except petty cash
expenses which were met by the Branch. All the cash collected by the
branch was banked on the same day to the credit of the Head Office. The
following is a summary of the transactions entered into at the branch during
the year ended December 31, 20X1.
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|
` |
|
` |
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Balancesason1.1.20X1: |
|
|
|
|
Stock |
7,000 |
BadDebts |
600 |
|
Debtors |
12,600 |
Goodsreturnedbycustomers |
500 |
|
PettyCash, |
200 |
Salaries&Wages |
6,200 |
|
GoodssentfromH.O. |
26,000 |
Rent&Rates |
1,200 |
|
GoodsreturnedtoH.O. |
1,000 |
SundryExpenses |
800 |
|
CashSales |
17,500 |
CashreceivedfromSundry |
|
|
CreditSales |
28,400 |
Debtors |
28,500 |
|
Allowancestocustomers |
200 |
Balancesason31.12.20X1: |
|
|
Discounttocustomers |
1,400 |
Stock |
6,500 |
|
|
|
Debtors |
9,800 |
|
|
|
PettyCash |
100 |
Prepare:
(a) Branch Account (Debtors Method),
(b) Branch Stock Account, Branch Profit & Loss Account, Branch Debtors
and Branch Expenses Account by adopting the Stock and Debtors Method
and
(c) Branch Trading and Profit & Loss Account to prove the results as
disclosed by the Branch Account.
CLASSWORK: As in evaluation
CONCLUSION: The teacher commends the students positively