Mathematics, 31.07.2021 20:30 pinkmoonlight
HOME OFFICE AND BRANCH ACCOUNTING REGULAR TRANSACTIONS
January 1, 2016, the BAL Company opened the Arren Branch in neighboring city. The statement of financial position for the home office on January 1 and a summary of the transactions for the home office and branch for 2016 are given below. Taxes are ignored.
Assets
Cash
P296,500
Accounts receivable
138,250
Merchandise Inventory
200,600
Prepaid expenses
9,000
Equipment
P100,000
Less: Accumulated Depreciation
22,000
78,000
Total Assets
P722,350
Liabilities and Shareholder’s Equity
Accrued expensesP6,250
Accounts payable114,000
Share Capital, P20 par, ordinary250,000
Retained Earnings352,100
Total Liabilities and Shareholder’s equityP722,350
Branch Transactions
Cash received from the home office, P212,500
Merchandise received from the home office, P251,000
Sales on account, P400,000
Purchases on account, P112,500
Collections on account deposited to the credit of the home office, P267,000.
Payment on accounts, P61,250
Purchases of equipment for cash, P40,000.
Expenses paid, P90,000.
Adjusting data on December 31: Depreciation, P3,250.
Merchandise inventory end,
P
117,500
Prepaid expenses,
P
3,750
Accrued expenses
P
1,500
Home Office Transactions
Transfer of cash to branch, P212,500
Transfer of merchandise to branch (billing at cost), P251,000. The company uses the periodic system
Sales on account, P525,000
Purchases on account, P612,500
Collections on account, P568,000
Payments on account, P620,000
Expenses paid, P133,000
Cash received from the branch, P267,000
Dividends declared and paid immediately, P50,000.
Adjusting entries on December 31: Depreciation for the year, P5,900 Merchandise inventory end, P242,500. Prepaid expenses, P10,250.
Accrued expenses, P6,750.
Instructions: Prepare journal entries, adjusting journal entries, separate financial statements and combined financial statement for the home office and branch.
The following records were taken from the books of the Company and its branch on December 31, 2016:
Home Office BooksBranch Books
Sales
P
920,000
P
800,000
Shipments to branch
600,000
Beginning inventory
96,000
64,000
Purchases
1,200,000
240,000
Shipments from home office
750,000
Allowance for overvaluation
158,000
Ending inventory
112,000
82,800
Expenses
40,000
20,000
Ending inventory of the branch includes P 34,800 acquired from outsiders.
Compute for the true net income of the branch
Ending balance and balance before adjustment of Unrealized Profit on Branch Inventory
Combined net income
Beginning and ending inventory at cost presented in the combined financial statements
The following records were taken from the books of the Company and its branch on December 31, 2016:
Home Office BooksBranch Books
Sales
P
1,060,000
P
315,000
Shipments to branch
210,000
Beginning inventory
115,000
44,500
Purchases
820,000
Shipments from home office
252,000
Ending inventory
142,500
58,500
Expenses
382,000
101,500
In 2016, home office billed the branch at 120% of cost which was lower by 5% than last year’s.
What is the combined net income?
Compute for the total beginning and ending inventory at cost.
What is the balance of the allowance for overvaluation of inventory of the branch after closing entries have been made?
The following records were taken from the books of the Company and its branch on December 31, 2016:
Home Office Books
Branch Books
SalesP 512,000
P 157,000
Purchases420,000
40,000
Shipment to branch60,000
Shipment from home office
80,000
Expenses120,000
25,000
Beginning inventory
Home office160,000
Branch:
-From outsiders
15,000
-From home office
Billed at 22.5% above cost
49,000
Ending inventory
Home office
110,000
Branch:
-From outsiders
11,000
-From home office
52,000
Compute​
Answers: 3
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