Chapter 13 Dayag

Chapter 13: MULTIPLE CHOICE 1.

C. 14,400 Merchandise Inventory X

2.

3.

4.

B. 37,600 Ending Inventory in the combined income statement: From Home Office 31,000 From Outsiders 6,600 37,600 A. 70,100 Shipments from Home Office 280,000 Less: Ending Inventory, at billed 43,000 Cost of goods sold from home office at billed price 236,600 Multiplied by: Mark up 40/140 67,600 Unrecorded Branch Expenses 2,500 True Branch Net Income 70,100 A. 10,000 Merchandise Inventory Multiplied by: Mark Up Unrealized Intracompany Profit

5.

A Branch Income Cost of Sales

6.

D. 25 (50,000 – 40,000)/40,000

7.

C. 20,000 (480,000 – 360,000) x (80,000/480,000)

8.

C.

9.

B. 580,000 Reported branch net income (per branch books) Branch income (per home office books) Overvaluation of branch COGS

C.

30,000 1/3 10,000

25% 20,000

700,000

Cost of Sales of Home Office Cost of Sales of Branch Overvaluation of branch COGS Combined Cost of Sales 10.

50,400 40/140 14,400

180,000

30,000 50,000 20,000 500,000 100,000 20,000 580,000

11.

A. 140% True Branch Net Income 156,000 Branch Net Income reported 60,000 Overvaluation of COGS 96,000 Less: COGS from Home Office, at billed Inventory, beg 70,000 Shipment from HO 350,000 COGAS 420,000 Inventory, end 84,000 336,000 CGS from HO, at cost 240,000 336,000/240,000 = 140%

12.

C. 24,000 84,000 x 40/140 = 24,000

13.

B. 109,000 Branch Net income reported Rental Expense Adjusted Net Income Overvaluation of CGS SFHO COGAS MI, end COGS, at billed Mark up Adjusted Branch Net Income

14.

D. Sales COGS

550,000 550,000 75,000 475,000 25/125

95,000 109,000

837,500

MI, beg Purchases COGAS MI, end Gross Profit Expenses Net Income 15.

20,000 6,000 14,000

87,500 500,000 587,500 120,000 467,500 370,000 170,000 200,000

D. Unrealized Profit in Branch Inventory Allowance of branch inventory, end Overvaluation of COGS Sales COGS

7,200 2,800 4,400 60,000

Inventory, beg Purchases SFHO COGAS

30,000 11,000 19,200 60,200

MI, end Gross Profit Expenses Unadjusted Branch Net Income Overvaluation of COGS Adjusted branch net income 17.

D.

D.

20.

D. 252,150 MI, beg HO, cost Branch, outsiders From Home Office 5,800 Purchases COGAS 256,800 MI, end HO, cost Branch, outsiders From Home Office 4,650 COGS D.

7,800 4,400 12,000 Billed Price Cost 36,000 28,800

Allowance 30,000 24,000

10,800 6,000/20% = 30,000 + 6,000 = 36,000 45,000 – 36,000 = 9,000

3,000 12,000

Merchandise Inventory 2,000 Shipments 1,600 COGS From HO at billed price From outsiders 19.

40,200

9,000 36,000

Merchandise Inventory 6,000 Shipments 4,800 COGS From HO at billed price From outsiders 18.

20,000 19,200 12,000

Billed Price Cost 12,000 9,600

Allowance 10,000 8,000

3,600 2,000/20% = 10,000 + 2,000 = 12,000 15,000 – 12,000 = 3,000

3,500 300 2,000

2,300 251,000

3,000 150 1,500

1,650 252,150

46,000 debit Billed Price

Merchandise Inventory 32,000 Shipments 24,000 COGS

60,000

Cost

Allowance 36,000 56,000

MI, end 10,000 Overvaluation of CGS 46,000 21.

D.

120,000 Billed Price

Merchandise Inventory 60,000 Shipments COGS MI, end 40,000 Overvaluation of CGS 120,000 22.

B. 7,900 52,000 Sales COGS MI, beg SFHO COGAS MI, end Gross Profit Expenses Net Income

MI, beg HO, cost Branch, cost 21,500 Purchases COGAS 71,500 MI, end HO, cost Branch, cost 19,500 COGS 23.

A. 40,000 48,000 / 120% = 40,000

24.

A. 8,000 48,000 / 20%/120% = 8,000

25.

B. 2,000 Sales COGS Inventory, beg

Cost

400,000

Allowance 100,000 160,000

40,000 4,500 20,000 24,500 5,500 21,000 13,100 7,900

19,000

17,000 4,500 50,000

14,000 5,500 52,000

192,000

Purchases SFHO COGAS MI, end Gross Profit Expenses Unadjusted Branch Net Income Overvaluation of COGS Adjusted branch net income 26.

C.

28.

29.

100,000

8,000 10,000 2,000

46,000

Merchandise Inventory Shipments COGS MI, end Overvaluation of CGS 46,000 27.

52,000 108,000 160,000 60,000 92,000 100,000

B. 326,000 Sales COGS MI, beg Purchases COGAS MI, end Gross Profit Expenses Net Income D. 25,550 Sales COGS MI, beg Purchases COGAS MI, end Gross Profit Expenses Net Income C. 20,000 Sales COGS MI, beg Purchases COGAS STBO COGAS for HO MI, end

Billed Price Cost 40,000 250,000 290,000 60,000 230,000

Allowance

900,000 132,000 350,000 482,000 78,000 496,000 170,000 326,000

404,000

117,000 20,000 57,000 77,000 16,550 56,550 31,000 25,550

60,450

155,000 23,000 190,000 213,000 100,000 113,000 30,000

83,000

Gross Profit Expenses Net Income 30.

A. 10,470 Sales COGS Inventory, beg Purchases Freight In Shipment in Transit COGAS MI, end Gross Profit Expenses Unadjusted Branch Net Income Overvaluation of COGS Adjusted branch net income

72,000 52,000 20,000 140,000 11,550 105,000 5,500 5,250 127,300 16,170 28,870 28,000

111,130

870 9,600 10,470

31.

A. 120,000 Inventory, beg, at billed price 165,000 Shipments, at billed price 110,000 COGAS, at billed price 275,000 CGS at BP: Sales 169,000 Sales returns and allowances 3,750 Sales price of mdse. From outsiders 9,000 Net sales of mdse. from HO 156,250 Intercompany cost ratio 100/125 125,000 Inventory, end, at billed price 150,000 Cost ratio 100/125 Merchandise inventory at cost destroyed by fire 120,000

32.

D. 400 Freight actually paid by: Home Office Branch Total Freight that should be recorded Excess freight

33.

D.

34.

C. 23,400 Inventory of the Branch: Shipments from HO, at billed price Ending Inventory Ending inventory, at billed price Freight

500 700 1,200 800 400

Charged to the Head Office

37,700 60% 22,620 780 23,400

35.

36.

B. 20,280 Inventory of the Branch: Shipments from HO, at billed price Ending Inventory Ending inventory, at billed price Freight C. Branch Current – Baguio Excess Freight Branch Current – Davao

32,500 60% 19,500 780 20,280

19,630 520 20,150

37.

C. A year-end adjusting entry or entries to establish an unrealized profit (loading) account of 12,500 (300,000 x ¼) x (300,000 – 250,000)/300,000 = 12,500

38.

D.

No year-end adjusting entry for the freight charges

39.

D.

It record the receipt of cash from the branch

40.

B. 7,900 Sales COGS MI, beg SFHO COGAS MI, end Gross Profit Expenses Net Income

B. 19,500 MI, beg HO, cost Branch, cost 21,500 Purchases COGAS 71,500 MI, end HO, cost Branch, cost 19,500 COGS

40,000 4,500 20,000 24,500 5,500 21,000 13,100 7,900

19,000

41.

42.

C. 52,000 MI, beg HO, cost

17,000 4,500 50,000

14,000 5,500 52,000

17,000

Branch, cost 21,500 Purchases COGAS 71,500 MI, end HO, cost Branch, cost 19,500 COGS

4,500 50,000

14,000 5,500 52,000

43.

C. Rock will have both a Stone Home Office account and Shipments from Stone Account on its branch office books.

44.

D. Debit the Rock Branch Account for the 2,000 of branch profit, credit the Rock Branch Profit account for the 2,000 branch profit md combine the 5,000 of branch ending inventory.