EXERCISES
Exercise 8 - 1
(a) Working Fund - Agency 5,000
Cash 5,000
(b) Accounts Receivable - Agency 50,000
Sales - Agency 50,000
(c) Cash 35,000
Accounts Receivable - Agency 35,000
(d) Expenses - Agency 4,500
Cash 4,500
(e) Expenses - Agency 2,250
Cash 2,250
(f) Cost of Sales - Agency 36,000
Shipments to Agency 36,000
Exercise 8- 2
(a) Working Fund - Makati Agency 10,000
Samples - Makati Agency 60,000
Cash 10,000
Shipments to Makati Agency 60,000
(b) Accounts Receivable - Makati Agency 200,000
Sales - Makati Agency 200,000
(c) Cost of Sales - Makati Agency 116,000
Shipments to Makati Agency 116,000
(d) Salaries and Commission - Makati Agency 20,000
Furniture and Fixtures - Makati Agency 45,000
Cash 65,000
(e) Delivery Expense - Makati Agency 6,200
Office Supplies Expense - Makati Agency 1,000
Cash 7,200
(f) Samples Expense - Makati Agency 25,000
Samples - Makati Agency 25,000
Office Supplies Expense 300
(h) Depreciation Expense - Makati Agency 1,250
Accumulated Depr. - Furniture & Fixtures 1,250
(I) Sales - Makati Agency 200,000
Agency Income 30,850
Cost of Sales - Makati Agency 116,000
Salaries and Commission - Makati Agency 20,000
Delivery Expense - Makati Agency 6,200
Samples Expense - Makati Agency 25,000
Office Supplies Expense - Makati Agency 700
Depreciation Expense - Makati Agency 1,250
(j) Agency Income 30,850
Income Summary 30,850
Exercise 8-3
Home Office Books
(a) Cash 20,000 Iloilo Branch 20,000 (b) Iloilo Branch 3,500 Cash 3,500 (c) Expenses 1,200 Iloilo Branch 1,200 (d) Iloilo Branch 32,000
Shipments to Iloilo Branch 32,000
(e) Shipments to Iloilo Branch 15,000
Iloilo Branch 15,000
(f) Furniture and Fixtures 5,500
Cash 5,500
(g) Iloilo Branch 550
Accumulated Depr. - Furniture & Fixtures 550
(h) Branch Income 2,600
Branch 2,600
Cash 20,000
(b) Expenses 3,500
Home office 3,500
(c) Home Office 1,200
Cash 1,200
(d) Shipments from Home Office 32,000
Home Office 32,000
(e) Home Office 15,000
Shipments from Home Office 15,000
(f) Memo entry (g) Depreciation Expense 550 Home Office 550 (h) Home Office 2,600 Income Summary 2,600 Exercise 8-4
Home Office Books (a)
(1) Dagupan Branch 300,000
Shipments to Branch 300,000
(5) Cash 150,000
Dagupan Branch 150,000
Branch Office Books
(1) Shipments from Home Office 300,000
Home Office 300,000 (2) Accounts Receivable 390,000 Sales 390,000 (3) Expenses 74,000 Cash 72,000 Accrued Expenses 2,000 (4) Cash 288,000 Sales Discount 6,000 Accounts Receivable 294,000 (5) Home Office 150,000 Cash 150,000
(6) Furniture and Fixtures 40,000
Cash 40,000
(7) Expenses 8,000
Accumulated Depr. - Furniture & Fixtures 8,000
(b)
Merchandise Inventory 60,000
Sales 390,000
Shipments from Home Office 300,000
Expenses 82,000 Sales Discounts 6,000 Income Summary 62,000 Income Summary 62,000 Home Office 62,000 ( c )
Honda Sales, Inc.
Statement of Recognized Income and Expenses - Branch For the Year Ended December 31,2008
Sales P 390,000
Less: Sales Discount 6,000 P384,000
Cost of sales:
Shipment to Home Office P 300,000
Less: Inventory, end 60,000
240,000 Gross Profit P 144,000 Expenses 82,000 Net Profit P 62,000 (d)
Honda Sales, Inc.
Statement of Financial Position - Branch December 31,2008
Assets
Cash (-720,00 + 288,000 - 150,000 - 40,000) P 26,000
Accounts Receivable (390,000 – 294,000) 96,000
Merchandise Inventory 60,000
Furniture and Fixture P 40,000
Less: Accumulated Depreciation 8,000 32,000
Total Assets P 214,000 Liabilities Accrued Expenses P 2,000 Home Office (300,000 - 150,000 + 62,000) 212,000 Total Liabilities P 214,000
Exercise 8- 5
Home Office Books
(a) Furniture and Fixtures 24,500
Branch 24,500
(b) Branch 24,500
Cash 24,500
(c) Branch 2,450
Accumulated Depr. - Furniture & Fixtures 2,450
(d) Furniture & Fixtures - new 40,000
Accumulated Depr. - Furniture & Fixtures 2,450
Branch Income 7,050
Furniture & Fixtures - old 24,500
Cash 25,000
Branch Office Books
(a) Home Office 24,500
Accounts Payable 24,500 (b) Accounts Payable 24,500 Home Office 24,500 (c) Depreciation Expense 2,450 Home Office 2,450 (d) Memo entry Exercise 8-6
Jan. 10 Notes Payable 2,500
Home Office 2,500
10 Furniture and Fixtures 10,000
Home Office 10,000
16 Shipments from Home Office 6,500
Home Office 6,500
16 Home Office 2,000
Cash 2,000
20 Home Office 1,200
Shipments from Home Office 1,200
25 Home Office 150
30 Expenses 800 Home office 800 31 Home Office 750 Income Summary 750 Exercise 8 -7 Honda Company
Reconciliation of Home Office and Branch Accounts December 31,2008
HO Books Branch
Books Branch Acct. HO Acct.
Unadjusted balances P 8,400 P 9,735
Adjustments;
(a) Merchandise in transit 615
(b) Collection of home office accounts rec’l 2,500 (c) Error in recording the net income of branch
(P1,215 - P1,125) 90
(d) Merchandise returned by branch still in
transit ( 640) _______
Adjusted balances P 10,350 P 10,350
Requirement 2
Home Office Books
(b) Branch 2,500 Accounts Receivable 2,500 (c) Branch 90 Branch Income 90 (d) Shipments to Branch 640 Branch 640 Branch Books
(a) Shipments from Home Office 615
Home Office 615
Exercise 8-8
Home Office Books
(a) Allowance for Doubtful Accounts 600
Makati Branch 600
(b) Makati Branch 1,250
General and Administrative Expense 1,250
(c) Manila Branch 1,200
(d) Makati Branch 850
Allowance for Uncollectible Accounts 850
Branch Books
(a) Home Office 600
Accounts Receivable 600
(b) General and Administrative Expenses 1,250
Home Office 1,250
(c) No entry
(d) Uncollectible Accounts Expense 850
Home office 850
PROBLEMS
Problem 8-1
(a) Samples - Cebu Agency 60,000
Advertising Materials - Cebu Agency 35,000
Shipments to Cebu Agency 60,000
Advertising Materials 35,000
(b) Working Fund - Cebu Agency 30,000
Cash 30,000
(c) Accounts Receivable - Cebu Agency 330,000
Sales - Cebu Agency 330,000
Cost of Sales - Cebu Agency 250,000
Shipments to Cebu Agency 250,000
(d) Cash 245,000
Sales Discounts - Cebu Agency 5,000
Accounts Receivable - Cebu Agency 250,000
(e) Rent Expense - Cebu Agency 15,000
Delivery Expense - Cebu Agency 3,000
Repairs and Maintenance - Cebu Agency 2,200
Cash 20,200
(f) Salaries and Wages - Cebu Agency 10,200
Commission Expense - Cebu Agency 33,000
Salaries and Wages 10,200
(g) Samples Expense - Cebu Agency 15,000
Samples - Cebu Agency 15,000
(g) Advertising Materials Expense - Cebu Agency 10,500
Advertising Materials - Cebu Agency 10,500
(h) Sales - Cebu Agency 330,000
Agency Income 13,900
Cost of Sales - Cebu Agency 250,000
Sales Discounts - Cebu Agency 5,000
Rent Expense - Cebu Agency 15,000
Delivery Expense - Cebu Agency 3,000
Repairs and Maintenance - Cebu Agency 2,200
Salaries and Wages - Cebu Agency 10,200
Commission Expense - Cebu Agency 33,000
Samples Expense - Cebu Agency 15,000
Advertising Materials Expense - Cebu Agency 10,500
(I) Income Summary 13,900
Agency Income 13,900
Problem 8- 2
Home Office Books
(a) Branch 150,000 Cash 150,000 (b) Branch 90,000 Shipments to Branch 90,000 (c) No entry (d) Branch 90,000 Cash 3,000 Equipment 75,000
Gain on Transfer of Equipment 12,000
(e) No entry (f) Expenses 7,500 Cash 7,500 (g) and (h) no entry (I) Cash 52,500 Branch 52,500 Branch Books (a) Cash 150,000 Home Office 150,000
(b) Shipments from Home Office 90,000 Home Office 90,000 (c) Purchases 120,000 Cash 120,000 (d) Equipment 90,000 Home Office 90,000
(e) Accounts Receivable 250,000
Sales 250,000
Cash 100,000
Accounts Receivable 100,000
(f) No entry
(g) Depreciation Expense - Equipment 9,000
Accumulated Depr. - Equipment 9,000
(h) Selling and Administrative Expenses 45,000
Cash 45,000
(I) Home Office 52,500
Cash 52,500 Problem 8-3 Requirement 1 a. Accounts Receivable 80,000 Sales 80,000 b. Purchases 21,000 Accounts Payable 21,000
c. Shipments from Home Office 40,000
Home office 40,000
d. Cash 76,000
Accounts Receivable 76,000
e. Accounts Payable 20,200
Cash 20,200
f. Allowance for Uncollectible Accounts 1,200
Accounts Receivable 1,200
g. Home Office 30,000
h. Expenses 24,800 Cash 24,800 I. Expenses 1,600 Home Office 1,600 j. Prepaid Expenses 200 Accrued Expenses 400 Expenses 1,700
Allowance for Doubtful Accounts 1,100
Accumulated Depreciation 1,200
k. Merchandise Inventory, end 38,800
Sales 80,000
Income Summary 3,300
Merchandise Inventory, beg. 33,000
Shipments from Home Office 40,000
Purchases 21,000 Expenses 28,100 l. Home Office 3,300 Income Summary 3,300 Requirement 2 Volvo Company
Statement of Recognized Income and Expenses - Branch For the Year Ended December 31, 2008
Sales P80,000
Cost of goods sold:
Inventory, January 1 P33,000
Purchases 21,000
Shipments from home office 40,000
Cost of goods available for sale P94,000
Less Inventory, December 31 38,800 55,200
Gross profit P24,800
Operating expenses 28,100
Net loss P 3,300
Volvo Company
Statement of Financial Position - Branch December 31, 2008
Assets
Cash (7,000 + 76,000 + 20,200 - 30,000 - 24,800) P 8,000
Accounts Receivable (24,400 + 80,000 - 76,000 -1,200) P27,200
Less Allowance for Uncollectible Accounts 1,600 25,600
Merchandise Inventory 38,800
Prepaid Expenses 900
Furniture and Fixtures P 7,700
Less Accumulated Depreciation 6,600 1,100
Total Assets P74,400 Liabilities Accounts Payable (4,000 + 21,000 - 20,200) P 4,800 Accrued Expenses 800 Home Office (60,500 + 40,000 - 30,000 + 1,600 - 3,300) 68,800 Total Liabilities P74,400 Volvo Company
Statement of Changes in Home Office Account For the Year Ended December 31, 2008
Home office account balance, January 1 P 60,500
Add: Shipments from home office P 40,000
Expenses paid by home office 1,600 41,600
Total P102,100
Deduct: Remittance to home office P 30,000
Net loss 3,300 33,300
Home office account balance, December 31 P 68,800
Requirement 3 c. Davao Branch 40,000 Shipments to Branch 40,000 g. Cash 30,000 Davao Branch 30,000 i. Davao Branch 1,600 Cash 1,600 Branch Income 3,300 Davao Branch 3,300 Problem 8-4 Requirement 1 Branch Books a. Cash 15,000
Shipments from Home Office 102,000
Home Office 143,000 Home Office 9,000 Cash 9,000 b. Accounts Receivable 62,000 Sales 62,000 c. Cash 26,000 Accounts Receivable 26,000 d. Purchases 30,000 Accounts Payable 30,000 e. Accounts Payable 14,500 Cash 14,500 f. Expenses 12,500 Cash 12,500 g. Cash 16,000 Home Office 1,500 Accounts Receivable 17,500
h. Shipments from Home Office 12,500
Home Office 12,500
I. Home Office 10,000
Cash 10,000
Home Office Books
a. Bacolod Branch 143,000
Cash 15,000
Shipments to Branch 102,000
Accounts Receivable 26,000
Store Furniture and Fixtures 9,000
Bacolod Branch 9,000 b. Accounts Receivable 346,000 Sales 346,000 c. Cash 400,000 Accounts Receivable 400,000 d. Purchases 316,000 Accounts Payable 316,000 e. Accounts Payable 362,000
Cash 362,000
f. Expenses 89,500
Accrued Expenses 2,500
Cash 92,000
g. Allowance for Uncollectible Accounts 1,500
Bacolod Branch 1,500 h. Bacolod Branch 12,500 Shipments to Branch 12,500 I. Cash 10,000 Bacolod Branch 10,000 Requirement 2 Jazz Company
Statement of Recognized Income and Expenses - Bacolod Branch For the Month Ended January 31, 2008
Sales P 62,000
Cost of goods Sold:
Shipments from Home Office (102,000 + 12,500 + 6,000) P120,500
Purchases 30,000
Cost of Goods Available for Sale P150,500
Less Merchandise Inventory, December 31 (9,800 + 600) 104,000 46,500
Gross Profit P 15,500
Expenses (12,500 + 4,750 + 350+ 3,500) 21,100
Net Loss P 5,600
Jazz Company
Statement of Financial Position - Bacolod Branch January 31, 2008 Assets Cash (15,000 - 9,000 + 26,000 - 14,500 - 12,500 + 16,000 - 10,000) P 11,000 Accounts Receivable (62,000 + 26,000 - 26,000 – 17,500) 44,500 Merchandise Inventory (98,000 + 6,000) 104,000 Total Assets P159,500 Liabilities Accounts Payable (30,000 - 14,500) P 15,500 Accrued Expenses 3,500
Home Office (143,000-9,000-1,500+12,500-10,000+6,000+4,750+350 -5,600) 140,500
Total Liabilities P159,500
Jazz Company
Statement of Recognized Income and Expenses - Home Office For the Month Ended January 31, 2008
Sales P346,000
Cost of Goods Sold:
Merchandise Inventory, January 1 P460,000
Purchases 316,000
Cost of Goods Available for Sale P776,000
Less Shipments to Branch (102,000 + 12,500 + 6,000) 120,500
Cost of Goods Available for Own Sale P655,500
Less Merchandise Inventory, December 31 445,000 210,500
Gross Profit P135,500
Expenses (89,500 - 4,750 + 1,000 + 7,500) 93,250
Net Income from Own Operations P 42,250
Less Branch Net Loss 5,600
Net profit P 36,650
Income Tax 12,828
Net Profit P23,822
Jazz Company
Statement of Financial Position - Home Office January 31, 2008
Assets
Cash (150,000 - 15,000 + 400,000 – 362,000 - 92,000 + 10,000) P 91,000 Accounts Receivable (420,000 - 26,000 + 346,000 - 400,000) P340,000 Less Allowance for Uncollectible Accounts (12,000 - 1,500) 10,500 329,500
Merchandise Inventory 445,000
Branch (143,000 - 9,000 - 1,500 + 12,500 - 10,000
+ 6,000 + 4,750+ 350 - 5,600) 140,500
Store Furniture and Fixtures (150,000 + 9,000) P159,000
Less Accumulated Depreciation (46,000 + 1,350) 47,350 111,650
Total Assets P1,117,650
Liabilities and Shareholders’ Equity
Accounts Payable (337,500 + 316,000 - 362,000) P 291,500
Accrued Expenses 7,500
Income Tax Payable 12,828
Ordinary Share Capital (282,000 + 36,650) 500,000
Retained Earnings (282,000 + 23,822 305,822
Total Liabilities and Shareholders’ Equity P1,117,650
Requirement 3
Jazz Company
Combined Statement of Recognized Income and Expenses for Home Office and Branch For the Month Ended January 31, 2008
Sales P408,000 Cost of Goods Sold:
Merchandise Inventory, January 1 P460,000
Purchases 346,000
Cost of Goods Available for Sale P806,000
Less Merchandise Inventory, December 31 549,000 257,000
Gross Profit P151,000 Expenses 114,350 Net Profit P 36,650 Income Tax 12,828 Net profit P 23,822 Jazz Company
Combined Statement of Financial Position for Home Office and Branch January 31, 2008
Assets
Cash P 102,000
Accounts Receivable P384,500
Less Allowance for Uncollectible Accounts 10,500 374,000
Merchandise Inventory 549,000
Store Furniture and Fixtures P159,000
Less Accumulated Depreciation 47,350 111,650
Total Assets P1,136,650
Liabilities and Shareholders’ Equity
Accounts Payable P 307,000
Accrued Expenses 11,000
Income Tax Payable 12,828
Ordinary Share Capital 500,000
Retained Earnings 305,822
Total Liabilities and Shareholders’ Equity P1,136,650
Requirement 4
Branch Books
a. Shipments from Home Office 6,000
Home Office 6,000
Home Office 4,750 c. Expenses 350 Home Office 350 P22,500 + P9,000 = P31,500/7.5 yrs x 1/12 d. Expenses 3,500 Accrued Expenses 3,500 e. Sales 62,000
Merchandise Inventory, end 104,000
Income Summary 5,600
Shipments from Home Office
120,500
Purchases 30,000
Expenses 21,100
f. Home Office 5,600
Income Summary 5,600
Home Office Books
a. Bacolod Branch 6,000 Shipments to Branch 6,000 b. Bacolod Branch 4,750 Expenses 4,750 c. Expenses 1,000 Bacolod Branch 350 Accumulated Depreciation 1,350 ( 150,000 - 30,000 = 120,000 x 10% x 1/12 = 1,000 ) d. Expenses 7,500 Accrued Expenses 7,500 e. Branch Income 5,600 Bacolod Branch 5,600 f. Sales 346,000 Shipments to Branch 120,500
Merchandise Inventory, end 445,000
Income Summary 36,650
Merchandise Inventory, beg. 460,000
Purchases 316,000
Expenses 93,250
Branch Income 5,600
Income Tax 12,828
Income Tax Payable 12,828
Income Tax 12,828 g. Income Summary 23,822 Retained Earnings 23,822 Problem 8-5 Requirement 1 Feroza Company
Working Paper for Combined Financial Statement For the Year Ended December 31,2008
Adjustments
Eliminations Combined Income Statement Combined Balance Sheet
Debits HO BR Dr. Cr. Dr. Cr. Dr. Cr. Cash 63,000 21,900 84,900 NR 10,500 10,500 AR 120,600 55,950 176,550 Inventories 143,700 36,300 180,000 F & E 72,150 72,150 Branch Cur. 124,050 a.124,050 CGS 300,750 128,700 429,450 OE 104,250 32,850 137,100 939,000 275,700 Credits AP 61,500 61,500 CS 300,000 300,000 HO Cur. 124,050 a.124,050 RE 37,500 37,500 Sales 540,000 151,650 691,650 939,000 275,700 124,050 124,050 566,550 691,650 Net Profit 125,100 125,100 691,650 691,650 524,100 524,100 Requirement 2 a. Sales 151,650 Income Summary 9,900
Cost of Goods Sold 128,700 Operating Expenses 32,850 b. Home Office 9,900 Income Summary 9,900 Requirement 3 a. Branch Income 9,900 Branch 9,900 b. Income Summary 9,900 Branch Income 9,900 Problem 8-6 Requirement 1 Isuzu Company
Reconciliation of Home Office and Branch Accounts January 31, 2008
Home Office Books Branch Books Branch Acct. Home Office Acct.
Unadjusted balances P77,150 P56,450
Add (deduct);
Advertising expense charged to branch 600
Merchandise shipment in transit 4,400
Merchandise shipment for P16,560 recorded
as P16,650 ( 90)
Collection of home office account 750 Understatement of 1994 depreciation ( 540)
Remittance to home office in transit (16,000) _______
Adjusted balances P61,360 P61,360
Requirement 2
Home Office Books
a. Cash 16,000 Retained Earnings 540 Accounts Receivable 750 Iloilo Branch 15,790 Branch Books a. Advertising Expense 600
Shipments from Home Office 4,310
Problem 8-7 Requirement 1
a. Shipments from Home Office 57,600
Operating Expenses 8,100
Home Office Current 65,700
b. Sales 778,200
Merchandise Inventory, end 122,180
Income Summary 116,990
Merchandise Inventory, beg. 47,800
Shipments from Home Office 680,800
Operating Expenses 54,790
c. Income Summary 116,990
Home Office Current 116,990
Requirement 2 a. Freight-Out 470 Branch Current 470 b. Cash 19,200 Branch Current 19,200 c. Branch Current 116,990 Branch Income 116,990 Requirement 3 Ford Company
Reconciliation of Current Account December 31,2008
Branch
Acct. Home Office Acct.
Balances before adjustment P 206,344 P120,974
Shipment in transit 57,600
Advertising charged to branch 4,200
Rent charged to branch 3,900
Error in charging freight (470)
Remittance in transit (19,200)
P 186,674 P 186,674
Problem 8-8
Mitsubishi Trading Company
Reconciliation of Home Office and Branch Accounts December 31, 2008
Branch Acct. Home Office Acct.
Unadjusted balances P225,770 P220,485
Add (deduct):
Error in recording cost of equipment 3,150
Insurance premium recorded twice by branch ( 675)
Freight for P1,125 recorded as P1,215 ( 90)
Discount from home office not recorded ( 800)
Share of branch in advertising not recorded 700
Error in recording remittance ( 3,000) ________
Adjusted balances P222,770 P222,770 Requirement 3 a. Office Equipment 3,150 Advertising Expense 700 Insurance Expense 675 Freight 90
Discount from Home Office 800
Home Office 2,285 MULTIPLE CHOICE 1. B 2. A 3. A Sales P400,000 Cost of sales ( 400,0000 - 70,000) 330,000 Gross profit 70,000 Expenses [30,000 + 10,000 + (10,000 - 6,000) + 5,000] 49,000 Net profit P 21,000 4. A Sales P46,500 x 70%
Cost of sales w/o freight P32,550
Add freight 1,100
5. Sales P46,500
Less Sales Discount (39,690 / 98%) - 39,690 810 P45,690
Cost of sales 33,650 Gross Profit P12,040 Expenses: Selling P 2,820 Administrative (46,500 x 5%) 2,325 Samples Expenses 1,900 7,045 Net Profit P 4,995 6. 17,500 + 8,000 +9,250 + (50,000 x 60% x 1/6) 7. C Sales P176,000 Cost of sales 105,000 Gross Profit P 71,000 Expenses 39,750 Net Income P 31,250 8. D P 87,00 / 125% = P70,000 9. B Sales P 87,500 Cost of sales 70,000 Gross Profit P 17,500 Expenses (350 + 250) 6,000 Net Income P 11,500 10 A 11 C 12 B 13 A Sales P74,000 Cost of sales Shipments P67,680
Less Inventory, end 9,180 58,500
Gross Profit P15,500 Expenses 6,820 Net Profit P 8,680 14 A P17,500 + 8,680 P 26,180 15 A 16 D 203,500 – (186,120 – 25,245 – 18,755) = 23,870
17 D Home Office Current P 48,125
Branch Income 23,870
18 B Sales P112,500 Cost of Sales:
Shipments from home office P120,000
Less Inventory, Dec. 31 30,000 90,000
Gross profit P 22,500 Expenses 8,100 Net Profit P 14,400 19 C P90,000 + P14,400 P104,400 20 A P1,500 + 43,800 + 37,170 P 82,470 21 D Net Sales (198,720 - 3,600) P 195,120 Cost of sales Beg. Inventory P 37,170 Shipments 136,000
Goods available for sale P 173,170
End. Inventory 41,370 131,800
Gross Profit P 63,320
Expenses (57,930 + 1,920) 59,850
Net Profit P 3,470
22 C BR. Acct. HO Acct.
Balances before adjustment P150,000 P117,420
Adjustments:
1. Shipments in transit 37,500
2. HO AR collected by branch 10,500
3. Supplies returned (4,500)
4. Error in recording Br. net income (1,080)
5. Cash to Branch in transit 25,000 25,000
P179,920 P 179,920
23 D P 179,920
24 C BR Acct. HO. Acct.
Balances P43,500 P41,900
Error in recording allowance 60
Advances taken by Pres. (550)
Share in advertising expense 900
P42,950 P42,950
25 A Sales
Cost of sales P 100,000
Inventory, beg. P21,000
Merchandise from Home Office 61,000
Merchandise available for sale P82,000
Less Inventory, end 19,000 63,000
Gross profit P37,000
Operating Expenses 21,000
26 C Branch A Branch B
Imprest branch fund P 2,000 P 1,500
Accounts Receivable, Jan.1 55,000 43,500
Inventory, Jan.1 21,000 19,000
Home Office account P 78,000 P 64,000
27 B
28 C Imprest branch fund P 1,500
Accounts Receivable, Dec. 31 53,000
Inventory, Dec. 31 12,000
Balance of Branch account - current P 67,000
29 D Sales P 80,000
Cost of sales
Inventory, Jan.1 P 19,000
Merchandise from Home office 47,000
Merchandise available for sale P 66,000
Less Inventory, Dec.31 12,000 54,000
Gross profit P 26,000
Operating Expenses 14,300
Net profit of Branch B P 11,700
30 D HO Account. Branch
Acct.
Beg. Balances P 30,670 P 30,670
1. Branch remittances (55,000) (47,800)
2. Shipment to branch 138,000 160,000
3. Home office expense paid by branch (5,700)
4. Branch receivable collected by branch (8,900)
P 107,970 P 133,970
31 D Branch Acct. HO Acct.
Unadjusted balances P 133,970 P 107,970
1. Remittance in transit (7,200)
2. Shipment in transit 22,000
3. Home office expense paid by branch (5,700)
4. Branch receivable collected by branch (8,900)
5. Branch net profit 6,500 6,500
P 127,570
P 127,570
32 A Marketing Expense of another branch charged to Butuan P (10,000)
Butuan’s remittance credited to Davao ( 65,700)
Net adjustment in Home Office Banch account P (75,700)
33 C Fixed account not recorded by Butuan P (53,960)
Inventory transfer recorded twice by Butuan 75,000
Net adjustment in Branch Books P 20,950 34 D.
Branch Account Home Office Account
Unadjusted balances P165,920 P111,170
35 B. Net adjustment in Branch Account (75,700) (20,950)
