Hogwarts Inc.

Working Paper for Combined Financial Statements of Home Office and Burrow Branch
For Year Ended December 31, 2012

Income Statement
Sales
Beginning inventory
Purchases
Shipments to Branch
Shipments from HO
Ending Inventory
Cost of goods sold
Operating expenses

Home Office
Dr (Cr)

Burrow Br
Dr (Cr)

(675,000)
140,000
680,000
(120,000)

(191,250)

(400,000)
300,000
164,000

180,000
(52,500)
127,500
84,000

Net income/(loss)

211,000

(20,250)

Statement of Retained Earnings

Retained earnings, Jan 1, 2006
Net (income)/loss
Dividends declared
Retained earnings, Dec 31, 2006

(421,000)
(211,000)
300,000
(332,000)

Cash
Accounts receivable
Inventories
Investment in Burrow Branch
Allow for overval of invty: Burrow
PPE and F&F
Accumulated depreciation
Total Assets
Trade accounts payable
Home office
Common stock
Retained earnings
Total liabilities and SHE

125,000
300,000
400,000
248,000
(60,000)
369,000
(125,000)
1,257,000
(325,000)
(600,000)
(332,000)
(1,257,000)

Elimination
Dr (Cr)

(866,250)
140,000
680,000
120,000
(180,000)
17,500

(421,000)
(233,250)
300,000
(354,250)

20,250

45,000
(9,000)
272,750
(45,000)
(248,000)
20,250
(272,750)

(435,000)
385,000
248,000
233,250

20,250

93,000
91,250
52,500

Combined
Dr (Cr)

(17,500)
(248,000)
60,000

248,000

218,000
391,250
435,000
0
0
414,000
(134,000)
1,324,250
(370,000)
0
(600,000)
(1,324,250)