Branch accounting asset purchase

All branch assets are controlled by head office . So asset is booked at ho. Branch will book maintainence.

In the Bangalore branch book entry for Asset.

Asset A/c Dr
To Mumbai Office A/c Cr
( Asset purchase by H.O for Branch)

-------------------------------------------------

In the books of Head office ( Mumbai branch)

Bangalore Branch A/c Dr
To Bank A/c Cr
( Asset purchase for branch and payment made )

Even though you are maintaining consolidated financial statements, Asset & Liabilities will transfer to H.O at the end of the year from branch.

Take others opinion as well.

Asset purchase entry

Asset purchase entry is first one , Correct me if any thing wrong.

There are other entries

@ Sabyachi Mukherji

bro , You also can  pass other entries.

Purchases dr.

Cr. Bank

(Asset cannot be capitalized in Mumbai office)

Dr. bank

Cr. purchases written off

(when Bangalore branch pays you for it)

Thats it! transfer the asset to other branch in Bangalore. Depreciate it Bangalore branch only.

In Bangalore books

Dr. Asset

Cr. Bank. 

(asset gets capitalized)

if we do purchases entry, then balance sheet wont tally. During consolidation you wont have a clue of this transaction 

P+S purchases

P+S bank 

P+S assets

 

 

As per the query all the payments of  Bangalore branch  were made form Mumbai office only , Bangalore branch is not paying back .  

In the books of Mumbai office I made short entry  as above  , it should be 

Bangalore  branch  A/c  Dr 

To Creditors           A/c   Cr 

( Asset purchase for branch office ) 

Creditors   A/c   Dr 

To Bank    A/c   Cr 

( payment to creditors by H.O  for purchase of Asset  of branch )  

Ok. It's the debtors method it seems and not interested in that. But branch is owned by company which means it's an asset.

Dr. asset

Cr. Bank

(Purchase of asset)

 

Dr. Branch assets ac

Cr. Asset

Taxes are paid by main office and depreciation must be done by main office because it needs to recover taxes paid included in the assets if it's a fully depreciable asset.

This is final accounts version