CMA Intermediate · Financial Accounting · Branch (including Foreign Branch) and Departmental Accounts
Sharma Stores has Dept A (sales Rs 6,00,000) and Dept B (sales Rs 4,00,000). Total advertisement expense of Rs 50,000 is apportioned on sales. What is the amount charged to Dept B?
Dept B is charged Rs 20,000. Advertisement is apportioned in the sales ratio of 6,00,000 to 4,00,000, which is 3:2, so B bears 2/5 of Rs 50,000. Rs 30,000 would be Dept A's share.
- ARs 20,000Correct
- BRs 25,000
- CRs 30,000
- DRs 40,000
Explanation
Sales ratio is 6:4 = 3:2. Dept B share = 50,000 x 4/10 = Rs 20,000. Rs 30,000 is Dept A's share, wrongly assigned to B by reversing the ratio.
Did you get it right without looking?
One question tells you little. A timed set on Branch (including Foreign Branch) and Departmental Accounts shows your real accuracy, how long you take and where you lose marks.
More Branch (including Foreign Branch) and Departmental Accounts questions
- Under the Final Accounts (Stock and Debtors are not separately kept) system of branch accounting, what does the Branch Adjustment Account (u…
- Under the Debtors System, Mysore branch data: opening stock Rs 30,000, goods sent Rs 1,80,000, closing stock Rs 40,000, cash sales Rs 90,000…
- Dept P transfers goods costing Rs 60,000 to Dept Q at cost plus 25%. At year end, Dept Q holds 40% of these goods unsold. Which unrealised p…
- Mehta Traders (head office, Mumbai) follows the Debtors System for its Pune branch. During the year: opening stock Rs 40,000, opening debtor…
- Delhi Traders' Chennai branch had opening debtors of Rs 40,000 and closing debtors of Rs 55,000. Credit sales for the year were Rs 3,20,000.…
- A branch receives goods from head office at 20% above cost. In the head office books, goods sent to branch of ₹2,40,000 (invoice price) are …