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Zorluk: ZorIndependent Branch Accounts and Head Office Reconciliation

In the books of Apex Trading Enterprise, the Branch Current Account in the Head Office ledger shows a debit balance of ₦145,000\text{₦}145,000, while the Head Office Current Account in the Branch ledger shows a credit balance of ₦110,000\text{₦}110,000 at year-end. Upon reconciliation, it was discovered that a cash remittance of ₦20,000\text{₦}20,000 sent by the branch had not yet been received by the head office, and goods worth ₦15,000\text{₦}15,000 dispatched by the head office were still in transit to the branch. What is the reconciled balance of the inter-company current account?

  1. ₦125,000Cevap
  2. B
    ₦150,000
  3. C
    ₦140,000
  4. D
    ₦165,000

Cevap

The reconciled balance of the inter-company current account is ₦125,000.
To reconcile independent branch and head office accounts, in-transit items must be recorded in the books of the party that has not yet entered them. Cash in transit (₦20,000) was sent by the branch, so it is already recorded in the branch books; Head Office must credit the Branch Current Account, reducing the debit balance from ₦145,000 to ₦125,000. Similarly, goods in transit (₦15,000) sent by Head Office are already recorded in Head Office books; the branch must credit the Head Office Current Account, increasing the credit balance from ₦110,000 to ₦125,000.

Adım Adım Çözüm

1
Identify the unadjusted balances in both ledgers
Head Office ledger (Branch Current A/c) = ₦145,000 (Debit); Branch ledger (Head Office Current A/c) = ₦110,000 (Credit).
The two accounts represent reciprocal records of the same relationship and should be equal after adjusting for in-transit items.
2
Adjust the Head Office ledger for cash in transit
Reconciled Balance = ₦145,000 - ₦20,000 = ₦125,000 (Debit).
The branch has already debited Head Office and credited cash, but Head Office has not yet credited the Branch Current Account for the cash received.
3
Adjust the Branch ledger for goods in transit to verify consistency
Reconciled Balance = ₦110,000 + ₦15,000 = ₦125,000 (Credit).
The Head Office has already credited the Branch Current Account and debited Goods Sent to Branch, but the branch has not yet credited the Head Office Current Account for the goods received.

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Independent Branch Head Office Reconciliation
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Independent Branch Accounts and Head Office Reconciliation