Illustration of double entry-branches, Financial Accounting

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Illustration of double entry
The balances on the current accounts of a head office and branch were Ksh 698,000, before the transactions listed below:

	Kshs
Goods sent to branch by head office	1,727,000
Remittances received by head office from branch	892,000
Goods received by branch from head office	1,620,000
Remittances sent to head office by branch	944,000
Branch profit for the period	594,000
Goods in transit from head office to branch	107,000
Cash in transit from branch to head office	52,000

Books of head office:

Branch Current A/C

	Sh		Sh
Bal b/d	698,000	Cash book	892,000
GSTB	1,727,000	Bal c/d	*1,533,000
	2,425,000		2,425,000
Bal b/d	1,533,000	Goods in transit	107,000
Branch profit	594,000	Cash in transit	52,000
	________	Bal c/d	1,968,000
	2,127,000		2,127,000

* Entry that is usually found in the trial balance of the Head Office.

Goods sent to branch

	Sh		Sh
		Branch current a/c	1,727,000

Goods in transit

	Sh		Sh
Branch current a/c	107,000

Cash in transit

	Sh		Sh
Branch current a/c	52,000

Books of the branch:

Head office current account

	Sh		Sh
Cash book	944,000	Bal b/d	698,000
Bal c/d*	1,374,000		1,620,000
	2,318,000		2,318,000
		Bal b/d	1,374,000
Bal c/d	1,968,000	Branch profit	594,000
	1,968,000		1,968,000

* Entry that is usually found in the trial balance of the branch.

Goods from head office

	Sh		Sh
H.O current a/c	1,620,000

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