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CA Intermediate · Advanced Accounting · Accounting for Branches including Foreign Branches

Meera Textiles' Jaipur branch keeps no ledger of its own, and the head office records branch debtors. Data for the year: opening debtors ₹40,000; credit sales ₹1,60,000; cash received from debtors ₹1,30,000; discount allowed ₹2,000; goods returned by customers ₹8,000; bad debts written off ₹3,000. What is the closing balance of branch debtors?

Closing branch debtors are ₹57,000. Opening debtors plus credit sales total ₹2,00,000. Cash received, discount allowed, sales returns and bad debts written off together reduce this by ₹1,43,000. The balance left is ₹57,000.

  1. A₹57,000Correct
  2. B₹55,000
  3. C₹60,000
  4. D₹62,000

Explanation

Closing debtors = 40,000 + 1,60,000 − 1,30,000 (cash) − 2,000 (discount) − 8,000 (returns) − 3,000 (bad debts) = ₹57,000. Check: total debits 2,00,000 less total credits 1,43,000 = 57,000. ₹60,000 results from ignoring the bad debts and ₹62,000 from ignoring both discount and bad debts.

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