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Advac2_Chapter 12 Solutions

Advac2_Chapter 12 Solutions

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Published by Ems DelRosario

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Published by: Ems DelRosario on Jul 19, 2014
Copyright:Traditional Copyright: All rights reserved


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Problem I: ACCOUNTING FOR AGENCY TRANSACTIONRequired 1: JOURNAL ENTRIESa.Working Fund - Agency5000Cash5000b.Accounts Receivable50000Sales - Agency50000c.Cash35000Accounts Receivable35000d.Salaries expense - Agency4500Cash4500e.Utilities expense - Agency2250Cash2250f.Cost of goos sold - Agency36000Shipments to Agency36000Required 2: DETERMINE THE NET INCOME IDENTIFIED WITH THE AGENCYSales50000Less:Cost of Goods Sold36000Gross Profit14000Less:ExpensesSalaries Expense4500Utilities Expense22506750
RECIPROCAL ACCOUNTSNONCURRENT ASSETa. Transfer of cash to Branchxxxxc. Shipment returns fro b. Shipment to Branchxxe. Depreciable assets ad. Expense incurred by Branchxx and will be used by but paid by Home Officexxxxf. Cash remittance by t BALANCExxxxBALANCEUNADJUSTED BALANCEXXg. Depreciation charged to Branchxxi. Adjusting items/reconciling items
(if any)
xxxxk. Adjusting items/reco xxxx(balance before closing entries)ADJUSTED BALANCEXXh. PROFIT from Branch operation
(if any)
xxxx j. LOSSES from Branch
Branch current balance after closing entriesXXPROBLEM 2
Home officea. Transfer of cash to Branch425000c. Shipment returns fro b. Shipment to Branch50200e. Depreciable assets ad. Expense incurred by Branch8000 and will be used by but paid by Home Office053400f. Cash remittance by t BALANCE9270061400BALANCEUNADJUSTED BALANCE31300g. Depreciation charged to Branch650i. Adjusting items/reconciling items
(if any)
00k. Adjusting items/reco 6500(balance before closing entries)ADJUSTED BALANCE31950h. PROFIT from Branch operation
(if any)
01400 j. LOSSES from Branch
BRANCH CURRENT or Investment in BranchBRANCH CURRENT or Investment in Branch
Branch current balance after closing entries30550
1Cash Balance59300 Remittance of cash from branch53400 Cash collection from receivable113600 Less: Cash transfer to branch-42500 Payments on account-124000 Expenses paid-26600 Dividends paid-10000Cash balance23200Accounts receivable19050Merchandise inventory, end48500Prepaid expenses2050
Home office total current assets92800
Furniture and Fixtures28000Less: Accum. Depreciation-6230Branch Current30550
Home office total assets145120
Accrued expenses1350Accounts payable21300
Home office total liabilities22650
Retained earnings, beg. Bal.70420Add: Net income of the home office13450Less: Net loss from branch-1400 Dividends paid-10000
Retained earnings. Ending bal.72470
Sales105000Less: Cost of Goods Sold Inventory, beginning40120 Purchases122500 Less: Shipment to branch-50200 Goods available for sale112420 Less: Inventory, ending-48500-63920Gross Profit41080

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