Home Office and Branch (Special Problems) - Ch9

7/21/2019 Home Office and Branch (Special Problems) - Ch9

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CHAPTER 9

SUGGESTED ANSWERS

EXERCISES

Exercise 9 - 1

Books of Branch R

Home Office 15,000

Cash 15,000

Books of Branch S

Cash 15,000

Home Office 15,000

Books of the Home Office

Branch S 15,000

Branch R 15,000

Exercise 9 - 2

Books of Branch No. 1

Home Office 1,950

Shipments from Home Office 1,600

Freight-In 350

Books of Branch No. 5


Freight-In 400

Cash 350

Home Office 1,650

Books of the Home Office

Branch No. 5 1,650

Excess Freight 300

Branch No. 1 1,950

Exercise 93

Home Office Books

1. no entry

2. Branch 360,000

Shipments to Branch 240,000

Allowance for Markup in Branch Inventory 120,000120,000/240,000 = 50%

3. no entry

4. Branch 134,000

Advertising Expense 40,000

Depreciation Expense 70,000

Utility Expense 24,000


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AA1- Chapter 9 (2008 editi on)

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5. no entry

Cash 360,000

Branch 360,000

6. no entry

7. Branch 58,000

Branch Income 58,000

8. Allowance for Markup in Branch Inventory 100,000


P300,000 x 50/150 = P100,000

9. Branch Income 158,000

Income Summary 158,000

Branch Books

1. Purchases 160,000

Accounts Payable 160,000

2. Shipments from Home Office 360,000

Home Office 360,000

3. Accounts Receivable 652,000

Sales 652,000

4. Advertising Expense 40,000


Utility Expense 24,000Home Office 134,000

5. Cash 470,000

Accounts Receivable 470,000

Home Office 360,000

Cash 360,000

6. Merchandise Inventory 60,000

Sales 652,000

Purchases 160,000

Shipments from Home Office 360,000Advertising Expense 40,000


Utility Expense 24,000


7. Income Summary 58,000

Home Office 58,000


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Exercise 9 - 4

a. Merchandise inventory, beg. P150,000

Less Merchandise from home office at billed price

Markup on merchandise shipped to branch P 36,000

Markup on current shipment (P96,000 P80,000) 16,000

Markup on beginning inventory P 20,000x 120/20 120,000

Merchandise purchased from outsiders P 30,000

b. Allowance for Intercompany Inventory Profit 22,000


Bal. of allowance before adjustment P36,000

Adjusted balance of allowance acct

(P84,000 x 20/120) 14,000

Realized markup P22,000

Exercise 95

Home Office Books

1. Branch 450,000


Allowance for Markup in Branch Inventory 150,000

150,000/300,000 = 50%

2. no entry



Realized markup on beginning inventoryP600,000 x 55% = P330,000 x 25/125* P 66,000

Realized markup on current shipments

P450,000 x 1/3 = P150,000 x 50/150 50,000

Total P116,000

*(600,000480,000) / 480,000 = 25%

Branch Books


Home Office 450,000

2. Accounts Receivable 870,000

Sales 870,000P590,000 + P280,000 = P870,000

3. no entry

Exercise 96

1. Branch 820,000

Cash 80,000



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Land 300,000


Allowance on Transfer of Land 80,000

120,000/240,000 = 50%

2. Branch 560,000

Shipments to Branch 400,000Allowance for Markup in Branch Inventory 160,000

160,000/400,000 = 40%

3. Branch 130,000




Realized markup on 1st inventory transfer P120,000

Realized markup on 2nd inventory transfer

(P640,000P360,000) x 40/140 80,000

Total P200,000

5. Allowance on Transfer of Land 80,000




Exercise 9 - 7

Required balance of allowance (markup on branch ending inventory)

P9,600 x 20/120 P 1,600

Adjustment for realized markup 36,400

Balance of allowance before adjustment P38,000

Allowance on current shipment (P160,000 x 20%) 32,000

Allowance on branch beginning inventory P 6,000

Markup rate 20%

Branch beginning inventory, at cost P30,000

Exercise 9 - 8

a. Merchandise available for sale at billed price (P16,200 + P20,250) P36,450

Merchandise available for sale at cost (P36,450/135%) 27,000

Unrealized intercompany inventory profit balance before adjustment P 9,450

b. Unrealized Intercompany Inventory Profit 4,550

Branch Income 4,550

Balance before adjustment P 9,450

Adjusted balance (P18,900 x 35/135) 4,900

Realized markup P 4,550


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Home Office Books

c. Shipments to Branch 400

Unrealized Intercompany Inventory Profit 140

Branch 540

Branch Books

Home Office 540Shipments from Home Office 540

Exercise 99

1. P20,000 25/125 = P100,000



P100,000 + P350,000P80,000 = P370,000 x 25/125 = P74,000

Exercise 9 - 10

Separate cost of goods sold of the home office:

Inventory, beginning P 252,000

Purchases 2,800,000

Shipments to branch ( 600,000)

Cost of goods available for sale P2,452,000

Less Inventory, end 240,000 P2,212,000

Separate cost of goods sold of the branch:

Inventory, beginning

From outside purchases P 12,000

From home office (P36,000 / 120%) 30,000

Total P 42,000

Purchases 96,000

Shipments from home office (P720,000 / 120%) 600,000Cost of goods available for sale P 738,000

Less Inventory, end:

From outside purchases P10,000

From home office (P42,000 / 120%) 35,000 45,000 693,000

Combined cost of goods sold P2,905,000

Exercise 911

1. Total Resold On Hand

Shipments from home office P450,000 P360,000 P90,000

Shipments to branch 375,000 300,000* 75,000**

Markup P 75,000 P 60,000 P15,000

* 75,000 / 375,000 = 20%

** 90,000 / 120% = P75,000

2. Cost of Goods Sold 420,000

Inventory 420,000

P60,000 + P450,000P90,000 = P420,000


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3. Billed Price Cost Markup

Inventory, beginning P 60,000 P 50,000 P 10,000

Shipments 450,000 375,000 75,000

Total P510,000 P425,000 P 85,000

Inventory, end 90,000 75,000 15,000

Cost of goods sold P420,000 P350,000 P 70,000

Exercise 9 - 12

a. Merchandise Inventory, January 1 P26,400

Add Shipments from Home Office 20,000

Cost of Goods Available for Sale P46,400

Cost of Goods Sold

Sales, net of Sales Returns (P15,000 - P2,000) P13,000

Sales rate 125% 10,400

Merchandise destroyed by fire at billed price P36,000

120%

Merchandise destroyed by fire at cost P30,000

b. Home Office BooksBranch Loss from Fire 30,000


Branch 36,000

Branch Books

Home Office 36,000

Merchandise Inventory 36,000

Exercise 913


Cost of Goods Sold P230,000 x 15/115 30,000

Branch 20,000

2. Home Office 520,000

Branch 520,000


Inventory 9,000

PROBLEMSProblem 91

Billed Price Cost Markup

Beginning inventory:

Acquired from vendors P100,000 P100,000 -

Acquired from home office 40,000 32,000 P 8,000Purchases from vendors 240,000 240,000 -

Shipments from Home Office P180,000 + P30,000 210,000 168,000 42,000

Total inventory available for sale P590,000 P540,000 P50,000

Less Ending inventory:

Acquired from vendors 40,000 40,000 -

Acquired from home office P60,000 + P30,000 90,000 72,000 18,000

Cost of goods sold P460,000 P428,000 P32,000


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Problem 9 2

Home Office Books

a. Dagupan Branch 10,000

Cash 10,000

b. Dagupan Branch 25,000Baguio Branch 40,000


c. Furniture and Fixtures 17,500

Cash 17,500

d. Expenses 800

Dagupan Branch 800

e. Baguio Branch 29,400

Sales Discounts 600


f. Baguio Branch 15,000

Dagupan Branch 15,000

g. Shipments to Branch 2,500


h. Dagupan Branch 1,800

Baguio Branch 1,800

i. Dagupan Branch 20,100


Cash 100

j. Baguio Branch 20,110

Excess Freight 35


Dagupan Branch Books

a. Cash 10,000

Home Office 10,000

b. Shipments from Home Office 25,000Home Office 25,000

c. no entry

d. Home Office 800

Cash 800

e. no entry


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f. Home Office 15,000

Cash 15,000

g. Home Office 2,500


h. Expenses 1,800Home Office 1,800

i. Shipments from Home Office 20,000

Freight-In 100

Home Office 20,100

j. Home Office 20,145


Freight-In 100

Cash 45

Baguio Branch Books

a. no entry

b. Shipments from Home Office 40,000

Home Office 40,000

c. no entry

d. no entry

e. Cash 29,400

Home Office 29,400

f. Cash 15,000

Home Office 15,000

g. no entry

h. Home Office 1,800

Cash 1,800

i. no entry

j. Shipments from Home Office 20,000Freight-In 110

Home Office 20,110

Problem 93

Requirement 1

Home Office Books

1. Baguio Branch 20,000

Cash 20,000


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3. Cash 245,000

Baguio Branch 245,000


Cash 7,000

57 - no entry

Baguio Branch Books

1. Cash 18,000

Home Office 18,000


Home Office 257,600

3. Home Office 247,400Cash 247,400


Home Office 2,400

4. Expenses 7,000

Home Office 7,000

5. Cash 247,400


Sales 288,000

6. Expenses 21,000Cash 21,000

7. Merchandise Inventory, end P30,100 + P1,400 31,500

Sales 288,000


Merchandise Inventory, beginning P257,600 + P1,400 17,500


Expenses 28,000


Home Office 15,000

Requirement 2

Baguio Branch 15,000




(P17,500 + P259,000P31,500) x 40/140


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Requirement 3


Home Office 1,400

Cash 2,000

Home Office 2,000

Problem 9 - 4

Requirement 1

Triple D Bookstore

Statement of Recognized Income and Expenses - Quezon City Branch

For the Year Ended December 31, 2008

Sales P192,690

Cost of Goods Sold:

Merchandise Inventory, beginning P 31,500Shipments from Home Office 128,000

Cost of Goods Available for Sale P159,500

Less Merchandise Inventory, end 22,750 136,750

Gross Profit P 55,940

Operating Expenses:

Advertising and Promotion P 6,400

Depreciation 2,400

Uncollectible Accounts Expense 1,250

Others 36,600 46,680

Net income P 9,260

Requirement 2

Branch 9,260

Branch Income 9,260



P136,750 x 25/125



Problem 9 - 5

Branch Booksa. Sales 78,000

Merchandise Inventory, end 12,000


Merchandise Inventory, beginning 10,000


Selling Expenses 4,000

Administrative Expenses 6,000


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b. Home Office 10,000


Home Office Books

a. Sales 310,000


Merchandise Inventory, end 30,000Merchandise Inventory, beginning 25,000

Purchases 300,000

Selling Expenses 20,000

Administrative Expenses 30,000


b. Branch Income 10,000

Branch 10,000

c. Allowance for Overvaluation in Branch Inventory 15,600


P18,000 - (P12,000 x 25/125) = P15,600

d. Branch Income 5,600


e. Income Tax 12,110

Income Tax Payable 12,110

f. Income Summary 12,110

Income Tax 12,110

g. Income Summary 22,490Retained Earnings 22,490

Problem 9 - 6

Requirement 1

Triple F Products Inc. - Branch

Trial Balance

December 31, 2008

Debit Credit

Cash 12,800


Merchandise Inventory 27,280Accounts Payable 2,040

Home Office 68,900

Sales 256,000

Cost of Sales 191,620

Operating Expenses 47,080 _______

326,940 326,940


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Requirement 2

Home Office Books

a. Sales 640,600



Operating Expenses 146,400

b. Branch 17,300


c. Allowance for Overvaluation of Branch Inventory 17,420


P191,620 x 10/110

P21,100 (P202,400 + P29,700P21,100) = 10%






Income Tax 26,628

g. Income Summary 76,080

Retained Earnings 76,080

Branch Books

a. Merchandise Inventory P202,400P189,200 13,200

Home Office 13,200

b. Sales 256,000



Operating Expenses 47,080

c. Income Summary 17,300

Home Office 17,300

Requirement 3

Combined net income (P41,360 + P34,720P26,628) P49,452

Combined Merchandise Inventory:

Home Office P156,640

Branch [ P27,280 + P13,200) 110% 36,800 P193,440


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Problem 9 - 7

Triple G Company

Combined Statement of Recognized Income and Expenses

for Home Office and Branch


Sales P325,000

Cost of goods sold:

Merchandise inventory, beginning P107,500

Purchases 215,000

Cost of goods available for sale P322,500

Less Merchandise inventory, end 81,300 241,200

Gross profit P 83,800

Operating expenses 50,000

Net income before Income Tax P 33,800

Income Tax 11,830

Net Income P 21,970

Inventory: Beginning Ending

Home Office P 80,000 P55,000

Branch P7,500 + (P24,000/120%) 27,500 P5,500 + (P26,000/125%) 26,300

Total P107,500 P81,300

** P37,500P30,000 = P7,500/ P30,000 = 25%

Requirement 2

Davao Branch Books

a. Sales 75,000



Shipments from Home Office 37,500Purchases 15,000

Expenses 10,000

Merchandise Inventory, beginning 31,500

b. Income Summary 12,500

Home Office 12,500

Requirement 3

Home Office Books

a. Davao Branch 12,500


b. Allowance for Markup in Branch Inventory 6,300Branch Income 6,300

Markup on branch beginning inventory

(P24,000 x 20/120) P 4,000

Markup on shipments 7,500

Allowance balance before adjustments P11,500

Markup on branch ending inventory

(P26,000 x 25/125) 5,200



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c. Sales 250,000




Purchases 200,000

Expenses 40,000Merchandise Inventory, beginning 80,000






Income Tax 11,830

g. Income Summary 21,970

Retained Earnings 21,970

Problem 98

Requirement 2

a. Plant Assets 4,000

Branch 4,000

b. Home Office 2,000


c. Cash 5,000

Branch 5,000

d. Expenses 1,000

Home Office 1,000

e. Shipments from Home Office 3,000

Home Office 3,000

f. Retained Earnings 2,500

Inventory 2,500

P15,000 x 20/120

g. Home Office 11,000

Branch 11,000

h. Sales 48,000



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Problem 98

Triple J Wholesale Company

Work Sheet for Combined Financial Statements


Inventory, beg: Inventory, end:

Home Office P55,000 Home Office P70,000

Branch P2,000 + P21,000/120% 19,500 Branch 12,500

P74,500 P82,50

Trial Balance

Adjustments and

Eliminations Income Statement Balance Sheet

Debits Home Office Branch Debit Credit Debit Credit Debit Cred

Cash 36,000 8,000 (c ) 5,000 49,000

Accounts Receivable 35,000 12,000 (b) 2,000 45,000

nventory 70,000 15,000 (f) 2,500 82,500 74,500 74,500

Plant Assets, net 90,000 (a) 4,000 94,000

Branch 20,000 (a) 4,000

(c ) 5,000

(g) 11,000

Purchases 290,000 24,000 314,000

Shipments from Home Office 45,000 (e) 3,000 (h) 48,000

Expenses 44,000 16,000 (d) 1,000 61,000

ncome Tax (i) 36,400 36,400

585,000 120,000

Credits

Accounts Payable 36,000 13,500 49,50

Accrued Expenses 14,000 2,500 16,50

ncome Tax Payable (i) 36,400 36,40

Home Office 9,000 (b) 2,000 (d) 1,000

(g) 11,000 (e) 3,000

Ordinary Share Capital 50,000 50,00

Retained Earnings 45,000 (f) 2,500 42,50

Sales 440,000 95,000 (h) 48,000 487,000

585,000 120,000 112,900 112,900 493,900 561,500

Net income 67,600 67,60

561,500 561,500 262,500 262,50


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Problem 99

Triple M CompanyWork Sheet for Combined Financial Statements


Trial Balance

Adjustments and

Eliminations Cost of Goods Sold Income Statement

Combined

Balance Shee

Debits HO Branch Debit Credit Debit Credit Debit Credit Debit Cr

ash 17,000 200 a. 1,700 20,700

b. 1,800

ventory 23,000 11,550 e. 1,000 33,550 44,770 44,770

undry Assets 200,000 48,450 248,450

vestment in Branch 60,000 a. 1,700

g. 58,300

urchases 190,000 190,000hipment from Home

ffice

105,000 c. 5,000 f. 110,000

eight-in from Home

ffice

5,500 d. 250 5,750

undry Expenses 42,000 24,300

come Tax h. 15,460 15,460

532,000 195,000 66,300

Credits

undry Liabilities 35,000 3,500 d. 250 38

come Tax Payable h. 15,460 15

rdinary Share Capital 200,000 200

etained Earnings 31,000 31

ome Office Equity 51,500 g. 58,300 b. 1,800

c. 5,000

les 155,000 140,000 295,000

hipments to Branch 110,000 f. 110,000

lowance for Markup in 1,000 e. 1,000

532,000 195,000 193,510 193,510 229,300 44,770

ost of Goods Sold 184,530 184,530

229,300 229,300 266,290 295,000

et income 28,710 28

295,000 295,000 313,920 313

Merchandise inventory, end:

Home office P30,000

Branch [((P15,400 / 110%) + (P15,400 x 5%)] = P14,000 + P770 14,770

Total P44,770


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Problem 910

Triple N Commercial

Working Paper for Combined Financial Statements for Home Office and Branch


Inventory, end:

Home Office P 70,000

Branch [(P21,420 + P14,000) / 110%] 32,200

Total P102,200

Trial Balance Adjustments

Adjusted

Trial Balance Eliminations

Branch

Income Statement

Home Office

Income Statement

Com

Balanc

Debits HO Branch HO Branch HO Branch Debit Credit Debit Credit Debit Credit Debit

h 50,100 1,260 a. 5,320 b. 2,100 55,420 3,360

58,780

ounts Receivable (net) 350,000 135,660 c. ( 2,500) 350,000 133,160

483,160

ntory Home office 64,400 64,400 64,400

70,000

Branch 32,340 32,340 a.

2,940 29,400 32,200 102,200

d Assets (net) 210,000 210,000

210,000

ch Current 163, 120 a. (5,320) 157,800 c.

157,800

hases 532,000 532,000 532,000

ments from Home

ce

294,000 d. 14,000 308,000 b.

28,000 280,000

dry Expenses 119,980 83,440 119,980 83,440

83,440

119,980

me Tax f. 23,667 e. 10,976 23,667 10,976 10,976 23,667

1,489,600 546,700 23,667 24,576 1,513,267 571,276

Credits

ounts Payable 30,500 10,500 30,500 10,500

tgage Payable 67,500 67,500

me Tax Payable f. 23,667 e. 10,976 23,667 10,976

me Office Current 144,200 b. 2,100

c. ( 2,500)

d. 14,000 157,800 c. 157,800

s 434,000 392,000 434,000 392,000

392,000 434,000ments to Branch 308,000 308,000 b. 28,000

280,000

wance for

rvaluation

2,940 2,940 a. 2,940

nary Share Capital 600,000 600,000

ined Earnings 46,660 46,660

1,489,600 546,700 23,667 24,576 1,513,267 571,276 188,740

188,740 403,816 424,200

740,047

784,000 854,140

ch net income

20,384

me Office net income 43,953

424,200 424,200 784,000 784,000 854,140


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MULTIPLE CHOICE

1. B 3. C 5. D 7. D

2. B 4. D 6. B 8. D

9 A

10 C

11 C

12 D P13,200 + P350 = P13,550

13 C P11,000 + P350 = P11,350

14 A P12,000 x 20/120 = P2,000

15 D Inventory, beginning (P165,000 / 125%) P132,000

Shipments (P110,000 / 125%) 88,000

Merchandise available for sale from home office at cost P220,000Cost of merchandise sold from home at cost

Sales, net of returns and allowances P165,250

Less Sales from merchandise purchased from

outsiders (P7,500 x 120%) 9,000

Sales from merchandise from home office P156,250

125%

Cost of sales at billed price P125,000

Billed price rate 125% 100,000

Inventory destroyed by fire P120,000

16 D Balance of allowance before adjustment P370,000

Required balance of allowance (P1,170,000 x 20/120) 195,000Realized markup P175,000

17 C Sales P141,000

Cost of goods sold (P120,000 x 3/4 x 125%) 112.500


Operating expenses 27,000

Net income reported by the branch P 1,500

18 A P50,400/120% P42,000

19 B P90,000 + P36,000P2,520P50,400/120% = P60,900

20 B Net income (loss) reported by branch (P 7,800)

Realized markup

(P90,000 + P36,000P2,520 - P50,400 = P73,080) x 20/120 12,180

True net income of the branch P 4,380

21 B Net income reported by branch P 4,800

Realized markup [(P3,960 + P17,600P4,840) x 10/110] 1,520


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Actual branch income P 6,320

22 B Branch ending inventory, at cost (P4,840 / 110%) P 4,400

Home office ending inventory 11,200

Ending inventory to be reported in the combined balance sheet P15,600

23 D Net income reported by the branch P 5,000

Realized markup[P280,000 - (P50,000 P6,600)] x 40/140 67,600


24 B Branch inventory from home office (P43,400 /140%) P31,000

Branch inventory from outside purchases 6,600

Total cost of branch inventory, end P37,600

25 D P60,000 - P7,500 P52,500

26 A P60,000 - (P7,500 x 120/20) P15,000

27 B Sales P 292,500

Cost of goods sold (P180,000 + P45,000 - P60,000) (165,000)

Operating expenses ( 72,000)

Realized markup [(P180,000 x 20/120) - P7,500 22,500


28 A Unadjusted balance of allowance account P99,900

Markup on 2008shipments from home office

(P390,000P300,000) 90,000

Markup on beginning inventory P 9,900

x 130/30 P 42,900

Total merchandise inventory beg 54,600

Merchandise from outside purchases P 11,700

29 D Sales P540,000

Cost of goods sold

(P54,600 + P390,000 + P144,600 - P48,750) (540,450)


Realized markup [P99,900 - (P39,000 x 30/130)] 90,900


30 C P39,000 x 30/130 = P9,000

31 D Sales (net of discount of P1,480) P115,520

Cost of goods sold (P104,000 - P12,500) ( 91,500)


Net income reported by branch P 4,020

32 C Net income reported by branch P 4,020

Realized markup (P91,500 x 25/125) 18,300



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33 C Sales P 37,400

Cost of goods sold (P5,000 + P2,000 + P26,400P4,500) ( 28,900)

Operating expenses ( 3,000)Realized markup [P2,800(P3,960 x 10/110)] 2,440

True profit of Cebu branch P 7,940

34 D Sales P110,000

Cost of goods sold

(P16,000 + P80,000P24,000P20,000) ( 52,000)


Net income of the home office P 48,000

Net income of the branch 7,940

Combined net income of the home office and branch P 55,940

35 C Sales P155,000Cost of sales:

Inventory, beginning P 23,000

Purchases 190,000

Goods available for sale P213,000

Shipments to branch (P110,000/110%) 100,000

Goods available for own sale P113,000

Less Inventory, end 30,000 83,000


Expenses 52,000

Net income P 20,000

36 A Sales P140,000Cost of sales:

Inventory, beginning (P11,550 P1,000) P 10,550

Shipments from HO, including freight-in 105,750

Goods available for sale P116,300

Less Inventory, end

[(P10,400 + P5,000)/110%] + P520 + P250 14,770 101,530


Expenses 28,400

True branch net income P 10,470

37 D (P10,400 + P5,000) x 10/110 P1,400

38 B Unadjusted balance of allowance account P 57,500

Markup on 2008 shipments (P200,000 x 25%) 50,000

Markup on beginning inventory P 7,500

x 125/25

Branch beginning inventory at billed price P 37,500


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39 C Sales P400,000


Operating expenses (100,000)

Net income reported by branch P 52,500

40 C Net income reported by branch P 52,500

Realized markup (P247,500 x 25/125) 49,500

True net income of the branch P102,000

41 B Beginning inventory P 8,000

Purchases 30,000

Shipments from home office 93,750

Ending inventory ( 10,350)

Cost of goods sold reported by branch P 121,400

Realized markup [P19,750 - (P6,000 x 25/125)* ( 18,550)

Cost of goods sold at cost P 102,850

*P93,750P75,000 = P18,750/P75,000 = 25%

42 C The amount of the realized markup of P18,550

43 C Adjusted net income P156,000

Reported net income 60,000


Cost of sales at cost

(P70,000 + P350,000P84,000)P96,000 P240,000

140%

44 C P84,000 x 40/140 P24,000

45 A 72,500 (75,000 + 444,000 -84,00072,500) 20%

46 D P444,000 / 120% P370,000

47 D Sales P 600,000


Operating expenses (200,000)

Realized markup [P72,500 - (P84,000 x 20/120)] 58,500

Adjusted profit of the branch P 23,500

48 C P84,000 x 20/120 = P14,000

49 A P84,000P14,000 = P70,000

50 B Home office inventory (P160,500 - P10,500) P 150,000

Branch inventory (P108,000/120%) 90,000

Inventories reported in the combined balance sheet P 240,000


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Problem 98

Triple J Wholesale Company

Work Sheet for Combined Financial Statements


Trial Balance

Adjustments and

Eliminations Income Statement Balance Sheet

Debits Home Office Branch Debit Credit Debit Credit Debit Cred

Cash 36,000 8,000 (c ) 5,000 49,000

Accounts Receivable 35,000 12,000 (b) 2,000 45,000

nventory 70,000 15,000 (f) 2,500 82,500 74,500 74,500

Plant Assets, net 90,000 (a) 4,000 94,000

Branch 20,000 (a) 4,000

(c ) 5,000

(g) 11,000

Purchases 290,000 24,000 314,000

Shipments from Home Office 45,000 (e) 3,000 (h) 48,000

Expenses 44,000 16,000 (d) 1,000 61,000

ncome Tax (i) 36,400 36,400

585,000 120,000

Credits

Accounts Payable 36,000 13,500 49,50

Accrued Expenses 14,000 2,500 16,50

ncome Tax Payable (i) 36,400 36,40

Home Office 9,000 (b) 2,000 (d) 1,000

(g) 11,000 (e) 3,000

Ordinary Share Capital 50,000 50,00

Retained Earnings 45,000 (f) 2,500 42,50

Sales 440,000 95,000 (h) 48,000 487,000

585,000 120,000 112,900 112,900 493,900 561,500

Net income 67,600 67,60

561,500 561,500 262,500 262,50


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Problem 99

Triple M Company

Work Sheet for Combined Financial StatementsFor the Year Ended December 31, 2008

Trial Balance

Adjustments and

Eliminations Cost of Goods Sold Income Statement

Combined

Balance Sheet

Debits HO Branch Debit Credit Debit Credit Debit Credit Debit Cr

sh 17,000 200 a. 1,700 20,700

b. 1,800

ventory 23,000 11,550 e. 1,000 33,550 44,770 44,770

ndry Assets 200,000 48,450 248,450

vestment in Branch 60,000 a. 1,700

g. 58,300rchases 190,000 190,000

ipment from Home

ffice

105,000 c. 5,000 f. 110,000

eight-in from Home

ffice

5,500 d. 250 5,750

ndry Expenses 42,000 24,300

come Tax h. 15,460 15,460

532,000 195,000 66,300

Credits

ndry Liabilities 35,000 3,500 d. 250 38

come Tax Payable h. 15,460 15

dinary Share Capital 200,000 200

tained Earnings 31,000 31

ome Office Equity 51,500 g. 58,300 b. 1,800

c. 5,000

les 155,000 140,000 295,000

ipments to Branch 110,000 f. 110,000

lowance for Markup in 1,000 e. 1,000

532,000 195,000 193,510 193,510 229,300 44,770

ost of Goods Sold 184,530 184,530

229,300 229,300 266,290 295,000

et income 28,710 28

295,000 295,000 313,920 313

Merchandise inventory, end:

Home office P30,000

Branch [((P15,400 / 110%) + (P15,400 x 5%)] = P14,000 + P770 14,770Total P44,770


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Home Office and Branch (Special Problems) - Ch9

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Transcript of Home Office and Branch (Special Problems) - Ch9