GUERRERO ADVACC 1 CHAP.

11

PROBLEM 11- NEST QUEST CORPORATION

Required: Prepare journal entries on the books of branch and home office.

HOME OFFICE B
Investment in Branch 30,000.00 Cash
1 Cash 30,000.00 Home Office

Investment in Branch 75,000.00 Shipments from Home Office

2 Shipments to Branch 75,000.00 Home Office

Purchases
3 Accounts Payable

Accounts Receivable
4 Sales

Shipments to Branch 12,000.00 Home Office

5 Investment in Branch 12,000.00 Shipments from Home O

Cash
6 Accounts Receivable

Accounts Payable
7 Cash

Salaries
Rent
Utilities
Other OPEX
8 Cash

Investment in Branch 7,500.00 Depreciation Expense

Depreciation Expense 1,500.00 Rent
Rent 5,000.00 Insurance
9 Insurance 1,000.00 Home Office

Cash 65,000.00 Home Office

10 Investment in Branch 65,000.00 Cash

Cash 3,000.00 Home Office

11 Investment in Branch 3,000.00 Sales

Branch Income 23,000.00 Sales

Income Summary - Branch 23,000.00 Merchandise Inventory
Income Summary
Income Summary - Home Office 23,000.00 Purchases
Branch Income 23,000.00 Shipments from Home O
 Salaries
Rent
Utilities
Depreciation
Insurance
12 Other OPEX

PROBLEM 11-2 MANILA

Required 1:

HOME OFFICE B
1 Investment in Branch 550,000.00 Cash
Cash 200,000.00 Shipments from Home
Shipments to Home Office 350,000.00 Home Office

2 Purchases
Accounts Payable

3 Accounts Receivable
Cash
Sales

4 Advertising
Sales Commissions
Other OPEX
Cash

5 Accounts Payable
Cash
120,000.00
Cash 120,000.00 Home Office
Investment in Branch Cash

PROBLEM 11-3 CEBU COMPANY

Required 1: Journal Entries to record transactions

HOME OFFICE B
A Investment in Branch 63,750.00 Cash
Cash 63,750.00 Home Office

B Investment in Branch 75,300.00 Shipments from Home

Shipments to Branch 75,300.00 Home Office

C Accounts Receivable 157,500.00 Accounts Receivable

Sales 157,500.00 Sales

D Purchases 183,750.00 Purchases

 Accounts Payable 183,750.00 Accounts Payable

E Cash 170,400.00 Cash

Accounts Receivable 170,400.00 Accounts Receivable

Home Office
Cash

F Accounts Payable 186,000.00 Accounts Payable

Cash 186,000.00 Cash

G Expenses 39,900.00 Furnitures and Fixtures

Cash 39,900.00 Cash

H Cash 80,100.00 Expenses

Investment in Branch 80,100.00 Cash

I Dividends 15,000.00
Cash 15,000.00

Required 2: Adjusting and Closing Entries

Adjusting Entries

Depreciation 1,770.00 Depreciation

Accumulated Depreciation 1,770.00 Accumulated Depreciatio

Prepaid Expenses 3,075.00 Prepaid Expenses

Expenses 3,075.00 Expenses

Expenses 2,025.00 Expenses

Accrued Expenses 2,025.00 Accrued Expenses

Closing Entries

Sales 157,500.00 Sales

Merchandise Inventory, end 72,750.00 Merchandise Inventory, end
Shipments to Branch 75,300.00 Income Summary
Merchandise Inventory, beg 60,180.00 Shipments from Home
Purchases 183,750.00 Purchases
Expenses 40,620.00 Expenses
Income Summary 21,000.00

Required 3: Income Statement and Balance Sheet

Income Statement
Sales 157,500.00 Sales
Cost of Goods Sold Cost of Goods Sold
Beg. Inventory 60,180.00 Beg. Inventory
Shipments to Branch (75,300.00) Shipments from Home O
Purchases 183,750.00 Purchases
Ending Inventory (72,750.00) (95,880.00) Ending Inventory
 Gross Profit 61,620.00 Gross Profit
Expenses (40,620.00) Expenses
Net Income, Home 21,000.00 Net Income, Home
Branch Loss (2,100.00)
Total Net income 18,900.00

Balance Sheet

Total Assets Total Assets

Cash 34,800.00 Cash
Accounts Receivable 28,575.00 Accounts Receivable
Inventory 72,750.00 Inventory
Prepaid Expenses 3,075.00 Prepaid Expenses
Furniture and Fixtures, net 21,630.00 Furnitures and Fixtures, net
Investment in Branch 58,950.00 TOTAL
Total 219,780.00
Total Liabilities and Equity
Total Liabilities and Equity Accounts Payable
Accounts Payable 31,950.00 Accrued Liability
Accrued Expesnes 2,025.00 Home Office
Capital Stock 75,000.00 TOTAL
Retained Earnings 109,530.00
Total 218,505.00

1,275.00

PROBLEM 11-6 LIPA CORPORATION

Adjusting Entries

Home Office (Investment in Branch) Branch (Home Office)

Cash 45,000.00
Investment in Branch 45,000.00
Home Office
Shipments from Home O

Salary Expense
Cash 15,000.00 Home Office
Investment in Branch 15,000.00
Home Office
Shipments from Home O

Investment in Branch 6,000.00 Depreciation

Acc. Depreciation 6,000.00 Home Office

Home Off. Branch

Unadjusted Balance 138,200.00 93,000.00
Adjustments (54,000.00) (8,800.00)
84,200.00 84,200.00
-
 84,200.00
- -

PROBLEM 11-7

Home Office (Investment in Branch) Branch (Home Office)

Cash 30,000.00 Expenses
Investment in Branch 30,000.00 Home Office

Shipments to Branch 12,000.00 Home Office

Investment in Branch 12,000.00 Accounts Receivable

Shipments from Home Office

Home Office

Supplies
Home Office
Home Off. Branch
Unadjusted Balance 166,400.00 103,200.00
Adjustments (42,000.00) 21,200.00
Adjusted Balance 124,400.00 124,400.00
###

PROBLEM 11-8 DIANA CORPORATION

Home Office (Investment in Branch) Branch (Home Office)

Investment in Branch 600.00 Home Office
Accounts Receivable 600.00 Shipments from Home O

Accumulated Depr'n 432.00 Advertising Exp.

Investment in Branch 432.00 Home Office

Cash 12,800.00 Shipments from Home Office

Investment in Branch 12,800.00 Home Office

Home Off. Branch

Unadjusted Balance 59,720.00 43,286.00
Adjustments (12,632.00) 3,820.00
Adjusted Balance 47,088.00 47,106.00 BUNGOL YUNG GIVEN

PROBLEM 11-9 TRADERS COMPANY

Home Office (Investment in Branch) Branch (Home Office)

Freight Out 470.00 Shipments from Home Office
Investment in Branch 470.00 Home Office

Investment in Branch 20,000.00 Rent

Cash 20,000.00 Advertising
Home Office
Cash 19,200.00
 Investment in Branch 19,200.00

Home Off. Branch

Unadjusted Balance 206,344.00 140,974.00
Adjustments 330.00 65,700.00
Adjusted Balance, before net income 206,674.00 206,674.00

Closing Entries
Sales 778,000.00
Inventory. End 64,580.00
Income Summary 124,890.00
Shipments from Home Office 623,200.00
Inventory. Beg 47,800.00
Operating Expenses 46,690.00

Home Off. Branch

Adjusted Balance, before net income 206,674.00 206,674.00
Net Income(Loss) 124,890.00 124,890.00
True/Adjusted Balance, after net inc 331,564.00 331,564.00
 BRANCH
30,000.00
Home Office 30,000.00

ments from Home Office 75,000.00

Home Office 75,000.00

10,000.00
Accounts Payable 10,000.00

nts Receivable 125,000.00

125,000.00

12,000.00
Shipments from Home Office 12,000.00

105,000.00
Accounts Receivable 105,000.00

nts Payable 7,000.00

7,000.00

10,000.00
5,000.00
2,000.00
12,500.00
29,500.00

ciation Expense 1,500.00 Sales

5,000.00 Cost of Goods Sold
1,000.00 Gross Profit
Home Office 7,500.00 Less: OPEX
NOI/EBIT
65,000.00
65,000.00

3,000.00
3,000.00

128,000.00
handise Inventory 5,000.00
Income Summary 23,000.00
Purchases 10,000.00
Shipments from Home Office 63,000.00
 Salaries 10,000.00
10,000.00
2,000.00
Depreciation 1,500.00
Insurance 1,000.00
Other OPEX 12,500.00

BRANCH Required 2: Prepare an income statement

200,000.00
ments from Home 350,000.00 Sales
Home Office 550,000.00 Cost of Sales
Gross Profit
400,000.00 OPEX
Accounts Payable 400,000.00 Net Operating Income

nts Receivable 50,000.00 Required 3: Prepare Balance Sheet

600,000.00
650,000.00 Assets
Cash
40,000.00 Accounts Receivable
Commissions 65,000.00 Inventory
45,000.00 Total Assets
150,000.00 Liabilities and Equity
Accounts Payable
nts Payable 370,000.00 Home Office
370,000.00 Total Liabilities and Equity

120,000.00
120,000.00

BRANCH
63,750.00
Home Office 63,750.00

ments from Home 75,300.00

Home Office 75,300.00

nts Receivable 99,000.00

99,000.00

33,750.00
 Accounts Payable 33,750.00

80,100.00
Accounts Receivable 80,100.00

80,100.00
80,100.00

nts Payable 18,375.00

18,375.00

ures and Fixtures 12,000.00

12,000.00

27,000.00
27,000.00

975.00
Accumulated Depreciation 975.00

id Expenses 1,125.00
Expenses 1,125.00

450.00
Accrued Expenses 450.00

99,000.00
handise Inventory, end 35,250.00
e Summary 2,100.00
Shipments from Home 75,300.00
Purchases 33,750.00
Expenses 27,300.00

99,000.00
of Goods Sold
Beg. Inventory
Shipments from Home Office 75,300.00
Purchases 33,750.00
Ending Inventory (35,250.00) (73,800.00)
 25,200.00
(27,300.00)
come, Home (2,100.00)

COMBINED

Total Assets
6,375.00 Cash
nts Receivable 18,900.00 Accounts Receivable
35,250.00 Inventory
id Expenses 1,125.00 Prepaid Expenses
ures and Fixtures, net 11,025.00 Furniture and Fixtures, net
72,675.00 Total

Liabilities and Equity

nts Payable 15,375.00 Total Liabilities and Equity
ed Liability 450.00 Accounts Payable
56,850.00 Accrued Expesnes
72,675.00 Capital Stock
Retained Earnings
Total

h (Home Office)

11,000.00
Shipments from Home Office 11,000.00

y Expense 200.00
Home Office 200.00
48,000.00
12,000.00 36,000.00
Shipments from Home Office 12,000.00 12,000.00

3,000.00
Home Office 3,000.00
 h (Home Office)
7,200.00
Home Office 7,200.00

18,000.00
Accounts Receivable 18,000.00

ments from Home Office 24,000.00

Home Office 24,000.00

8,000.00
Home Office 8,000.00

h (Home Office)
180.00
Shipments from Home Office 180.00

tising Exp. 480.00

Home Office 480.00

ments from Home Office 3,520.00

Home Office 3,520.00

GOL YUNG GIVEN

h (Home Office)
ments from Home Office 57,600.00
Home Office 57,600.00

3,900.00
4,200.00
Home Office 8,100.00
128,000.00
(68,000.00)
60,000.00
(37,000.00)
23,000.00
n income statement

650,000.00
(425,000.00)
225,000.00
(150,000.00)
75,000.00

Balance Sheet

160,000.00
50,000.00
325,000.00
535,000.00

30,000.00
505,000.00
535,000.00
D

41,175.00
47,475.00
108,000.00
4,200.00
nd Fixtures, net 32,655.00
233,505.00

ies and Equity

47,325.00
2,475.00
75,000.00
109,530.00
234,330.00

825.00
DAYAG. PROBLEM 12

PROBLEM 12-I SALES AGENCY

Required 1: Prepare entries.

A. Working Fund - Agency 5,000.00

Cash 5,000.00

B. Accounts Receivable - Agency 50,000.00

Sales - Agency 50,000.00

C. Cash 35,000.00
Accounts Receivable - Agency 35,000.00

D. Expenses - Agency 4,500.00

Cash 4,500.00

E. Expenses - Agency 2,250.00

Cash 2,250.00

F. Cost of Goods Sold - Agency 36,000.00

Merchandise Inventory - Agency 36,000.00

Required 2: Identify the net income by the Agency

Sales - Agency 50,000.00

Cost of Sales - Agency (36,000.00)
Gross Profit - Agency 14,000.00
Expenses (6,750.00)
Net Income - Agency 7,250.00

PROBLEM 12-II BARTON COMPANY

Required 1: Journal Entries

Home Office (Investment in Branch acct.) Branch (Home Office acct.)

A. Investment in Branch 42,500.00 Cash
Cash 42,500.00 Home Office

B. Investment in Branch 50,200.00 Shipments from Home Office

Shipments to Branch 50,200.00 Home Office

C. Accounts Receivable 105,000.00 Accounts Receivable

Sales 105,000.00 Sales

D. Purchases 122,500.00 Purchases

 Accounts Payable 122,500.00 Accounts Payable

E. Cash 113,600.00 Home Office

Accounts Receivable 113,600.00 Accounts Receivable

F. Accounts Payable 124,000.00 Accounts Payable

Cash 124,000.00 Cash

G. Expenses 26,600.00 Furniture and Fixtures

Cash 26,600.00 Cash

H. Cash 53,400.00 Expenses

Investment in Branch 53,400.00 Cash

I Dividends 10,000.00
Cash 10,000.00

J.I. Adjusting Entries

Depreciation 1,180.00 Depreciation

Accumulated Depreciation 1,180.00 Accumulated Depreci

Prepaid Expenses 2,050.00 Prepaid Expenses

Expenses 2,050.00 Expenses

Expenses 1,350.00 Expenses

Accrued Expenses 1,350.00 Accrued Expenses

Closing Entries

Sales 105,000.00 Sales

Merchandise Inv, end 48,500.00 Merchandise Inv, end
Shipments to Branch 50,200.00 Income and Expense Summa
Income and Expense Summary 14,000.00 Shipments from Home
Purchases 122,500.00 Purchases
Merchandise, beg 40,120.00 Expenses and Deprec
Expenses and Depreciation 27,080.00
Home Office
Income and Expense Summary 14,000.00 Income and Expense
Retained Earnings 14,000.00

Branch Income (Loss) 1,400.00

Investment in Branch 1,400.00

Income and Expense Summary 1,400.00

Branch Income (Loss) 1,400.00

Retained Earnings 1,400.00

 Income and Expense Summary 1,400.00

PROBLEM 12-IV RECONCILIATION

Socrates Company

Required 1: Reconcile the two accounts

Home Office Branch
Unadjusted balance 85,000.00 33,500.00
Coll. Of branch trade receivables (9,000.00)
Shipment of merch. 24,000.00
Acquisition of off. Equip. (14,500.00)
Receive of cash (22,000.00)
Adjusted balance 48,500.00 48,500.00

Required 2: Entries

Base sa reconciliation. Go siz.

PROBLEM 12-V RECONCILIATION

Ward Co.

Required 1: Reconcile the two accounts

Home Office Branch
Unadjusted balance 8,400.00 9,735.00
a. Shipment in transit 615.00
b. Collected home off.'s receivable 2,500.00
c. Error in recording branch income 90.00
d. Return of shipments to home (640.00)
Adjusted balance 10,350.00 10,350.00

PROBLEM 12-VI RECONCILIATION

Sunset Co.

Required 1: Reconcile the two accounts

Home Office Branch
Unadjusted balance 77,150.00 56,450.00
Advertising chargeable to branch 600.00
Merchandise Shipments 4,400.00
Understatement of depreciation (540.00)
Branch erroneously recorded shipments (90.00)
Cash Receipt (16,000.00)
Coll. Of home off. Acct. 750.00
Adjusted balance 61,360.00 61,360.00
Required 2: Entries

Base sa reconciliation. Go siz.

PROBLEM 12-VII RECONCILIATION

Block and Bell, Inc.

Required 1: Reconcile the two accounts

Home Office Branch
Unadjusted balance 59,365.00 57,525.00
Erroneous shipment of merchandise (1,400.00)
Shipments return to home office (840.00)
Expenses chargeable to branch 215.00
Allow. For doubtful accts maintained (1,200.00)
Income of Branch 1,225.00
Correction of income understatement 310.00
Corrected accounts of branch (215.00)
Cash remittance (65.00)
Adjusted balance 57,460.00 57,460.00
 h (Home Office acct.)
42,500.00
Home Office 42,500.00

ments from Home Office 50,200.00

Home Office 50,200.00

nts Receivable 66,000.00

66,000.00

22,500.00
 Accounts Payable 22,500.00

53,400.00
Accounts Receivable 53,400.00

nts Payable 12,250.00

12,250.00

ure and Fixtures 8,000.00

8,000.00

18,000.00
18,000.00

650.00
Accumulated Depreciation 650.00

id Expenses 750.00
Expenses 750.00

300.00
Accrued Expenses 300.00

66,000.00
andise Inv, end 23,500.00
e and Expense Summary 1,400.00
Shipments from Home Office 50,200.00
Purchases 22,500.00
Expenses and Depreciation 18,200.00

1,400.00
Income and Expense Summary 1,400.00