CHAPTER 12 - Home Office and Branch - General Procedures.doc

CHAPTER 12 MULTIPLE MUL TIPLE CHOICE 12-1:

d. This is recorded when the the working fund is replenished. replenished.

12-2:

c.

Sales Cost of goods sold: Purchases Merchandise inventor, end $ross profit %&penses  Net income (loss) 12-3:

P800,000 !80,000

"#0,000 P 80,000 !'8,000 P (!!8,000)

b

Sales Cost of goods sold (P70,000 * !+0) $ross profit ess: Sa Sa/ples (P8,000  P",000) %&penses  Net income 12-4:

P 700,000

P

70,000 -0,000 P #0,000 P #,000 #,800  P

+,800 15,200

a

Sales Cost of goods sold $ross profit %&penses (P',000 1 P+,-00)  Net income 12-5:

a

12-6:

a

12-7:

c

12.8

a

Ship/ent of /erchandise to ho/e office %3uip/ent sent to ho/e office %&penses assigned to 4ranch 4 the ho/e office Cash re/ittance to ho/e office  Home office account balance balance

P !00,000 7#,000 P #8,000 !2,-00 P !+,-00

P 80,000 -0,000 8,000 (+0,000) P '8,000

!

12-9:

d

12-10: a

5o/e 6ffice account 4alance 4efore closing, ec. 2#, !008 P 2-,000  et inco/e (loss) Sales P!+7,000 Cost of cost goods sold Ship/ent to 4ranch P!2-,000 9nventor, !#*2! !8,-00 !!",-00 $ross profit P 20,-00 %&penses !2,-00 !7,000 5o/e 6ffice account 4alance (Investment in Branch account balance ) P -#,000 Ship/ent to ranch account has no 4eginning 4alance, 4ecause this was closed at the end of #008. 12-11: b

Pett cash fund ;ccounts receiva4le 9nventor  Home Office account balance

 Jan. 1, 2008 P ",000 8",000 7+,000 P166,000

Jan. 1, 2009 P ",000 '8,000 8#,000 P186,000

12-12: d

e/ittance in transit Ship/ent in transit Cash collections of ho/e office  A!uste balances, "ec# $1

(!a"c# $$%&'  Home Office P #!,2#0

7,#80 ( +00) P %8,%00

(H$) O**+c) $$%&' Investment in Branch P 28,"00 (!0,+00)

P %8,%00

12-13: a

eturns of /erchandise in transit  A!uste balances, 1%$1

(!a"c# $$%&' (H$) O**+c) $$%&' Home Office Investment in Branch P '7,2-0 P 8+,000 ",!-0 #-,000 '00 ( ",+00) P10$,+00 P10$,+00

12-15: a

(!a"c# $$%&'  Home Office collected 4 ho/e office Merchandise returns in transit ( !,#00) %rror in recording 4ranch profit ( 2,"00)  A!uste balances P%$,+0

(H$) O**+c) $$%&' Investment in Branch P#7,2-0

(2,000)

P%$,+0

12-16: c e/ittance in transit Ship/ent in transit %&penses allocated %rror in recording re/ittance %rror in recording ship/ents &na!uste balance ' Home Office account

e/ittance in transit Ship/ent in transit %&penses allocated %rror in recording ship/ents  A!uste balances 12.17

P 8-,000 (!0,000) (#0,000) ( -,000) 2,000 ( ',000) P ,000

( !a"c# $$%&' Home Office P ++,000

(H$)O**+c) $$%&' Investment in Branch P 8-,000 (!0,000)

#0,000 -,000 (2,000) ',000 P 7-,000

P 7-,000

(!a"c# $$%&' Home Office

(H$) O**+c) $$%&' Investment in

a

 Branch

collected 4 5o/e 6ffice Ship/ents in transit ;c3uisition of furniture Merchandise returns Cash re/ittance in transit

P ++0,000 ( 8,000) 2#,000

P +'",000

(!#,000) (!-,000) ( -,000)

2

 A!uste balances

P 6,000

P 6,000

PROLEM, P!$b) 12-1 H$) O**+c) $$%&

1. Investment in branch Cash

30,000

2. Investment in branch !hi"ment to branch

5,000

!a"c# $$%&

Cash 30,000

5,000

3. #o entr$

(. #o entr$

5. !hi"ment to branch Investment in branch

30,000 Home office

30,000

!hi"ment from home office Home office

5,000

P%rchases &cco%nts "a$ab'e

10,000

5,000

10,000

&cco%nts receivab'e !a'es 2,000 2,000

). #o entr$

125,000 125,000

Home office 2,000 !hi"ment from home office Cash

105,000 &cco%nts receivab'e

. #o entr$

9. Investment in branch &cc%m%'ate e"/n

10. Cash Investment in branch

105,000

&cco%nts "a$ab'e   ,000

8. #o entr$

,000 Cash

!a'aries >ent *ti'ities Other o"eratin+ e"enses   29,500 ,500 ,500

)5,000

2,000

10,000 -,000 2,000 12,000 Cash

-e"reciation ent  Ins%rance Home office

1,500 5,000 1,000 ,500

Home office

)5,000

)5,000

Cash )5,000

11. Cash

3,000 Investment in branch

12. Investment in branch Branch income

3,000 10,000 10,000

Home office &cco%nts receivab'e !a'es Inventor$, en

3,000

125,000 5,000 !hi"ment from

3,000

HO

3,000

+

P%rchases

10,000 !a'aries

  10,000 ent *ti'ities

10,000 2,000 Other o"eratin+ e"enses

12,500 Home office

10,000

Pro4le/ !#?# a.

$$%& $* #) !a"c#

1.

2.

3.

Cash  erchanise inventor$  Home office

200,000 350,000

erchanise inventor$  &cco%nts "a$ab'e

(00,000

&cco%nts receivab'e !a'es

)50,000

Cost of +oos so'  erchanise inventor$

(25,000

Cash

)00,000

550,000

(00,000

)50,000

(25,000

 &cco%nts receivab'e (.

5.

b.

&vertisin+ e"ense !a'es commission Other e"ense Cash &cco%nts "a$ab'e  Home office Cash

(0,000 )5,000 (5,000 150,000 30,000 120,000 (90,000

Ma"+a ,a)& / aa !a"c# I"c$) ,a))" )a! E"d)d )c)b)! 31 2008

Sales Cost of goods sold $ross profit %&penses: ;dvertising e&pense Sales co//issions 6ther e&penses  et inco/e c.

)00,000

P"-0,000 +#-,000 ##-,000 P+0,000 "-,000 +-,000

!-0,000 P 7-,000

Ma"+a ,a)& / aa !a"c#

-

aa"c) ,#)) )c)b)! 31 2008

Cash ;ccounts receiva4le Merchandise inventor Total assets

P!"0,000 -0,000 2#-,000 P-2-,000

;ccounts paa4le 5o/e office

P

20,000 -0-,000

Total lia4ilities and capital

P-2-,000

Pro4le/ !#?2 H$) O**+c) $$%&

!a"c# $$%& (1'  A!ustin- .ntries

a. 9nvest/ent in 4ranch Cash

"2,7-0

b. 9nvest/ent in 4ranch Ship/ent to 4ranch

7-,200

c. ;ccounts receiva4le Sales

!-7,-00

d. Purchases ;ccounts paa4le

!82,7-0

). Cash

!70,+00

Cash "2,7-0

5o/e office Ship/ent fro/ 56 5o/e office

7-,200

72,200

'',000

!-7,-00

;ccounts receiva4le Sales

!82,7-0

Purchases 22,7-0 ;ccounts paa4le 22,7-0 Cash

;ccounts receiva4le

*. ;ccounts paa4le Cash .  %&penses Cash

@urniture A fi&tures  4ranch 9nvest/ent in 4ranch #. Cash

"2,7-0

!70,+00

!8",000 !8",000 2','00

7-,200

'',000

80,!00 ;ccounts receiva4le

5o/e office Cash

80,!00

;ccounts paa4le Cash

!8,27-

80,!00

80,!00

!8,27-

? 2','00

!#,000 !#,000 80,!00

9nvest/ent in 4ranch

5o/e office Cash

!#,000 !#,000

? 80,!00 %&penses Cash

+. >etained earnings Cash

"2,7-0

#7,000 #7,000

!-,000 !-.000

(%) A!ustin- .ntries  .  %&penses ;cc. epreciation

!,7-0 !,7-0

"

% . 9nvest/ent in 4ranch ;cc. epBn  r. @ A @

'7-

. Prepaid e&penses %&penses

27-

. %&penses ;ccrued e&penses

!-0

'7-

%&penses 5o/e office

'7-

27-

Prepaid e&penses %&penses

!-0

%&penses ;ccrued e&penses

'7!,!#!,!#+-0 +-0

/losin- .ntries H$) O**+c) $$%& ". Sales Ship/ents to 4ranch Merchandise inv., !#*2! Merchandise inv. !*! Purchases %&penses 9nco/e su//ar

!-7,-00 7-,200 7#,7-0

o. ranch loss 9nvest/ent in 4ranch

#,!00

. 9nco/e su//ar ranch loss

#,!00

. 9nco/e su//ar >etained earnings

3.

!a"c# $$%&

"0,!80 !82,7-0 +!,++#0,!7-

#,!00

Sales '',000 Merchandise inv., !#*2! 2-,#-0 9nco/e su//ar #,!00 Purchases 22,7-0 Ship/ent fro/ 56 7-,200 %&penses #7,200

5o/e office #,!00 9nco/e su//ar

#,!00

#,!00 !8,07!8,07-

 Iniviual inancial tatements C)b C$a" / H$) O**+c) I"c$) ,a))" )a! E"d)d )c)b)! 31 2008

Sales Cost of sales Merchandise inventor, !*! Purchases $oods availa4le for sale Ship/ent to 4ranch $oods availa4le for own sale Merchandise inventor, !#*2! $ross profit %&penses  et operating inco/e ranch inco/e (loss)  et inco/e

P!-7,-00 P "0,!80 !82,7-0 P#+2,'20 ( 7-,200) P!"8,"20 ( 7#,7-0)

'-,880 P "!,"#0 +!,++P #0,!7( #,!00) P !8,07-

C)b C$a" / !a"c# I"c$) ,a))" )a! E"d)d )c)b)! 31 2008

Sales

P '',000

7

Cost of sales Purchases Ship/ents fro/ ho/e office $oods availa4le for sale Merchandise inventor, !#*2! $ross profit %&penses  et inco/e (loss)

P 22,7-0 7-,200 P!0',0-0 2-,#-0

72,800 P #-,#00 #7,200 P( #,!00)

C)b C$a" / H$) O**+c) aa"c) ,#)) )c)b)! 31 2008  Assets Cash ;ccounts receiva4le Merchandise inventor, !#*2! Prepaid e&penses @urniture and fi&tures ess: ;ccu/ulated depreciation ranch furniture and fi&tures ess: ;ccu/ulated depreciation 9nvest/ent in 4ranch Total assets  2iabilities an toc3holers4 .5uit  iabi'ities ;ccrued e&penses ;ccounts paa4le Total lia4ilities !tocho'ers/ 4%it$ Capital stock >etained earnings Total lia4ilities and stockholdersB e3uit

P 2+,800 #8,-77#,7-0 2,07P20,000 8,270

#!,"20 P!#,000

'7-

!!,0#+-,8#P#!7,"80

P

#,0#2!,'-0 P 22,'7P 7-,000 !08,70-

!82,70P#!7,"80

C)b C$a" / !a"c# aa"c) ,#)) )c)b)! 31 2008  Assets Cash ;ccounts receiva4le Merchandise inventor, !#*2! Prepaid e&penses Total assets

P ",27!8,000 2-,#-0 !,!#P"!,"-0

 2iabilities an /a7ital  ;ccounts paa4le 5o/e office Total lia4ilities and capital

P +-0 !-,27P"!,"-0

8

#

/ombine inancial tatements C)b C$a" C$b+")d I"c$) ,a))" )a! E"d)d )c)b)! 31 2008

Sales Cost of sales Merchandise inventor, !*! Purchases $oods availa4le for sale Merchandise inventor, !#*2! $ross profit %&penses Co/4ined net inco/e

P#-",-00 P "0,!80 #!7,-00 P#77,"80 !08,000

!"',"80 P 8",8#0 "8,7+P !8,07-

C)b C$a" aa"c) ,#)) )c)b)! 31 2008

 Assets Cash ;ccounts receiva4le Merchandise inventor Prepaid e&penses @urniture and fi&tures ess: accu/ulated depreciation Total assets

P +!,!7+7,+7!08,000 +,#00 P+#,000 ',2+-

 2iabilities and StockholdersB %3uit ;ccrued e&penses ;ccounts paa4le Capital stock >etained earnings Total lia4ilities and stockholdersB e3uit

2#,"-P#22,-0-

P

#,+7+7,2#7-,000 !08,70P#22,-0-

P!$b) 12-4 !a"c# $$%&

H$) O**+c) $$%& (a' a"d (b' /losin- .ntries

Sales !+-,000 9nventor, !#*2! "0,000 9nventor, !*! Ship/ents fro/ 56 %&penses 9nco/e su//ar

!8,000 !+-,000 #0,000 #2,000

Sales -"0,000 9nventor, !#*2! '0,000 Ship/ents to 4ranch !+-,000 9nventor, !*! Purchases %&penses 9nco/e su//ar

+-,000 -+0,000 '0,000 !#0,000

'

9nco/e su//ar 5o/e office

##,000

9nvest/ent in 4ranch ranch inco/e

##,000

##,000 ##,000

ranch inco/e ##,000 9nco/e su//ar ##,000 9nco/e su//ar !+#,000 >etained earnings !+#,000



C; C$!$!a+$" C$b+")d ,a))"