Advanced Accounting Part 2

Chapter 13
Problem 5
Worksheet
Account Titles

Cash
Accounts receivable
Merchandise Inventory - December 1
Furniture and Fixtures
Store supplies
Prepaid expense
Branch
Purchases
Shipment from Home Office
Advertising expense
Salaries and commission expense
Miscellaneous selling expense
Rent expense
Miscellaneous general expense

Merchandse Inventory - December 31

Total Debits

Accumulated Depreciation - Furniture and fixtures

Shipment to branch
Unrealized intercompany inventory profit
Sales
Accrued expense
Accounst payable
Home office
Capital Stock
Retained earnings
Income and expense summary
Total Credits
Net income
Balance

Unadjusted Trail Balance

Home Office
10,350
26,200
31,500
8,500
940
33,760
27,600
2,850
4,250
1,850
2,700
2,600

153,100

2,500
8,500
3,700
44,850
35,400
65,000
(6,850)
153,100

1. Reconciliation of reciprocal accounts

Unadjusted balance
a. Remittance
b. Unrecorded expenses
Adjusted balances

Branch
33,760
(1,500)
32,260

2. Table
Billed
Inventory - Beginning
Shipment from home office
Goods available for sale
Inventory - Ending
Cost of goods sold

Adjusting Entries:

12,000
10,200
22,200
11,700
10,500

Cost
10,000
8,500
18,500
9,750
8,750

Home Office
Debit
24,200

a.)

Merchandise Inventory
Income and expense Summary

b.)

Miscellaneous selling expense

Store supplies

560

c.)

Prepaid expenses
Miscellaneous general expense

350

d.)

Miscellaneous general expense

Accrued expense

260

e.)

Miscellaneous general expense

Accumulated depreciation - F & F

f.)

Cash

1,500
Branch

g.)

85

Miscellaneous general expense

Home office

Closing Entries and Eliminating Entries

Closing Entries

Income and expense summary

Sales
Shipment to Branch
Merchandise inventory - December 1
Purchases
Shipment from Home Office
Advertising expense
Salaries and commission expense
Miscellaneous selling expense
Rent expense
Miscellaneous general expense

20,555
44,850
8,500

Home office
Income and expense summary

Branch income and expense summary

Branch

3,021

Unrealized intercompany inventory profit

Branch income and expense summary

1,750

Income and expense summary

Branch income and expense summary

1,271

Income and expense summary

Retained Earnings

2,374

Eliminating entries for Combined Financial Statements

Income statement
a.
Shipment to Branch
Unrealized intercompany inventory profit
Shipment from Home office
Inventory - beginning
Income and expense Summary
Merchandise Inventory
Balance Sheet
a.
Unrealized intercompany inventory profit
Merchandise Inventory
b.

Home Office
Branch

Home and Branch

Debit
8,500
3,700

1,950

1,950

29,239

djusted Trail Balance

Adjusting and Reconciling Entries

Adjusted trail balance

Branch
2,650 f
12,850
14,400
3,600
580 b
c
f
4,100
10,200
2,800
2,350
1,050 b
1,500
700 c
d
e
g
a
56,780

Home Office
1,500

540 e

85

36

260

105

(560)
350
(1,500)

560
(350)
260
85
24,200
24,545

Branch

(280)
120

280
(120)
105
36
220
14,600
14,961

20,000
d
4,200
32,040 g

a
56,780

Home Office
11,850
26,200
31,500
8,500
380
350
32,260
27,600
2,850
4,250
2,410
2,700

2,595
24,200
177,645

2,585
8,500
3,700
44,850
260
35,400

220

24,200
24,545

14,600
14,961

65,000
(6,850)
24,200
177,645

Home Office
32,040
220
32,260

Allowance
2,000
1,700
3,700
1,950
1,750

Home Office
Credit

Branch
Debit
14,600

24,200

Credit
14,600

280
560

280
120

350

120
105

260

105
36

85

36

1,500
220
220

17,621
20,000
31,500
27,600

14,400
4,100
10,200
2,800
2,350
1,330
1,500
941

2,850
4,250
2,410
2,700
2,595
3,021

3,021

3,021

1,750

1,271

2,374

Home and Branch

Credit

10,200
2,000

1,950

1,950

29,239

Individual Financial Stateme

justed trail balance

Branch
2,650
12,850
14,400
3,600
300
120

Income Statement
Home Office
Branch

31,500

14,400 a

4,100
10,200
2,800
2,350
1,330
1,500

27,600

4,100
10,200
2,800
2,350
1,330
1,500

941
14,600
71,741

2,595

2,850
4,250
2,410
2,700

73,905

a
a
a
a
a
a

941 a
37,621

576
8,500
20,000
105
4,200
32,260

44,850

14,600
71,741

24,200
77,550
3,645
73,905

a
d
20,000 a

14,600
34,600
(3,021)
37,621

Branch Income Statement

Sales
Less: Cost of Sales
Merchandise inventory -beg
Shipment from Home Office
Purchases
Goods available for sale
Less: Merchandise inventory - end
Gross profit
Less: Expenses
Advertising expense
Salaries and commission expense
Miscellaneous selling expense
Rent expense
Miscellaneous general expense
Net loss
Add: Realized profit
Branch true net loss

Home Office Income Statement

Sales
Less: Cost of Sales
Merchandise inventory -beg
Purchases
Goods available for sale
Less: Shipment to branch
Merchandise inventory - en
Gross profit
Less: Expenses
Advertising expense
Salaries and commission expense
Miscellaneous selling expense
Rent expense
Miscellaneous general expense
Net income from own operation
Less: Branch true net loss
Net income

Branch Balance sheet

Cash
Accounts receivable
Merchandise Inventory
Store supplies
Prepaid expense
Furniture and fixtures
Less: Accumulated depreciation
Total Assets
Accrued expense
Accounts payable
Home office
Total Liabilities

Home Office Balance sheet

Cash
Accounts receivable
Merchandise Inventory
Store supplies
Prepaid expense
Branch
Less: Unrealized intercompany inventory profit
Furniture and fixtures
Less: Accumulated depreciation
Total Assets
Accrued expense
Accounts payable
Capital Stock
Retained earnings
Total Liabilities and Stockholders' Equity

Individual Financial Statement

Closing entries

(31,500)

(3,021)
(27,600)

Balance Sheet
Home Office
Branch
11,850
2,650
26,200
12,850
(14,400)

(2,850)
(4,250)
(2,410)
(2,700)

(4,100)
(10,200)
(2,800)
(2,350)
(1,330)
(1,500)

(2,595)

(941)

(76,926)

(8,500)
(1,750)
(44,850)

(37,621)

8,500
380
350
29,239

3,600
300
120
-

24,200
100,719

14,600
34,120

2,585

576

1,950
(20,000)
260
35,400
(3,021)

2,374
(24,200)
(76,926)

105
4,200
29,239

65,000
(4,476)
(14,600)
(37,621)

100,719

34,120

20,000
14,400
10,200
4,100
28,700
14,600

2,800
2,350
1,330
1,500
941

14,100
5,900

8,921
(3,021)
1,750
(1,271)

44,850
31,500
27,600
59,100
8,500
24,200

32,700

2,850
4,250
2,410
2,700
2,595

26,400
18,450

14,805
3,645
1,271
2,374

2,650
12,850
14,600
300
120
3,600
576

3,024
33,544
105
4,200
29,239
33,544

11,850
26,200
24,200
380
350
29,239
1,950
8,500
2,585

27,289
5,915
96,184
260
35,400
65,000
(4,476)
96,184

Combined Financial Statement

Eliminating
Entries

Income
Statement

Eliminating
Entries

Balance Sheet
14,500
39,050

(2,000)

43,900

(29,239)

12,100
680
470
-

31,700
5,650
6,600
3,740
4,200

3,536
(1,950)
99,326

36,850
103,650

3,161
(8,500)

(1,950)

64,850

(29,239)

(1,950)

36,850
101,700
2,374
99,326

365
39,600
65,000
(4,476)
103,650

Combined income statement

Sales
Less: Cost of Sales
Merchandise inventory -beg
Purchases
Goods available for sale
Less: Merchandise inventory - end
Gross profit
Less: Expenses
Advertising expense
Salaries and commission expense
Miscellaneous selling expense
Rent expense
Miscellaneous general expense
Combined Net income

64,850
43,900
31,700
75,600
36,850

5,650
6,600
3,740
4,200
3,536

38,750
26,100

23,726
2,374

Combined Balance sheet

Cash
Accounts receivable
Merchandise Inventory
Store supplies
Prepaid expense
Furniture and fixtures
Less: Accumulated depreciation
Total Assets
Accrued expense
Accounts payable
Capital Stock
Retained earnings
Total Liabilities and Stockholders' Equity

14,500
39,050
36,850
680
470
12,100
3,161

8,939
100,489
365
39,600
65,000
(4,476)
100,489