INTER BRANCH TRANSACTIONS

1. The Home Office instructed Branch 1 to effect a fund transfer to Branch 2.

HO BOOKS BRANCH 1 BRANCH 2

BC – Br 2 HOC Cash
BC- Br 1 Cash HOC

2. Branch 1 collected P10,000, net of P2,000 discount from the customer on

account of Branch 2.

HO BOOKS BRANCH 1 BRANCH 2

BC – Br 1 10,000 Cash 10,000 HOC 10,000

BC – Br 2. 10,000 HOC. 10,000 SD. 2,000
AR. 12,000

3. The HO incurred and paid P25,000 expenses (Not an Inter Branch

Transaction)

Expenses 25,000
Cash 25,000

4. The HO allocated 20% of the incurred expenses to Branch 1 and 30% to

Branch 2. (Not an Inter branch Transaction)

HO BOOKS BRANCH 1 BRANCH 2

BC – Br 1 5,000
BC – Br 2 7,500 Exp 5,000 Exp. 7,500
Exp. 12,500 HOC. 5,000 HOC. 7,500
 5. The HO transferred cash to Branch 1 (Not an Inter Branch Transaction)

HO BOOKS BRANCH 1 BRANCH 2

BC – Br 1 25,000 Cash. 25,000 No Entry

Cash 25,000 HOC 25,000

6. The HO instructed Branch 1 to pay for an expense chargeable to HO

(40%), to Branch 1 (35%) and to Branch 2 (25%)

HO BOOKS BRANCH 1 BRANCH 2

Expense. 10,000 Expense. 8,750 Exp. 6,250

BC – Br 2. 6,250 HOC 16,250 HOC 6,250
BC – Br 1. 16,250 Cash. 25,000

7. The HO shipped merchandise costing P100,000 to Branch A at a mark-up

of 20% based on cost, freight of P5,000 was paid by the HO (prepaid).
(Not an Inter Branch Transaction)

HO Branch A Branch B

BC.- Br A. 125,000 SFHO 120,000 No Entry

STB. 100,000 F-in. 5,000
Allow 20,000 HOC 125,000
Cash. 5,000
What if Collect? (paid by receiving Branch)

HO Branch A Branch B

BC.- Br A. 120,000 SFHO 120,000 No Entry

STB. 100,000 F-in. 5,000
Allow 20,000 HOC 120,000
Cash. 5,000

8. The HO instructed Branch A to transfer ½ of mdse to Branch B . Branch A

paid additional freight of P1,000. Had ½ of the mdse been shipped
directly to Branch B the freight would have been P2,800.

HO Branch A Branch B

BC- Br B. 62,800 HOC. 63,500 SFHO. 60,000

EXCESS FREIGHT. 700 SFHO. 60,000 F-in. 2,800
BC – Br A. 63,500 F-in. 2,500 HOC. 62,800
Cash. 1,000

STB- A 60,000
STB-B 60,000

HO------Br A-------Br B
2,500. + 1,000 = 3,500
----------------------= 2,800
excess freight (700) expense/loss of HO
What if?

The HO instructed Branch A to transfer ½ of mdse to Branch B . Branch B paid

additional freight of P1,000. Had ½ of the mdse been shipped directly to
Branch B the freight would have been P2,800.

HO Branch A Branch B

BC- Br B. 61,800 HOC. 62,500 SFHO. 60,000

EXCESS FREIGHT 700 SFHO. 60,000 F-in. 2,800
BC – Br A. 62,500 F-in. 2,500 HOC. 61,800
Cash. 1,000

What if?

The HO instructed Branch A to transfer ½ of mdse to Branch B . Branch B paid

additional freight of P1,000. Had ½ of the mdse been shipped directly to
Branch B the freight would have been P3,600.

HO Branch A Branch B

BC- Br B. 62,500 HOC. 62,500 SFHO. 60,000

SFHO. 60,000 *F-in. 3,500 (2,500 +1,000)
BC – Br A. 62,500 F-in. 2,500 HOC. 62,500
Cash. 1,000

*The freight chargeable to Branch B cannot be higher than the combined

applicable freight charges from HO to Branch A and the additional freight
charges from Branch A to Branch B.

-end of illustration-