UNIVERSITY OF LUZON

College of Accountancy
Summer 2019-2020
ACC 310
Quiz 3

Name: LOMIBA0, FREDDIE I. Schedule: MTWTHF 9:00-11:00 AM Date: JULY 11, 2020

Problem 1

A. Prepare the closing entries for the branch.

BOOK OF BRANCH LEZNER Corporation - Branch

234,00 Stateme of Profit or Loss
SALES 0 for the year ended Dec 31, 2018
Inventory, end 60,000
Income and Expense Summary 6,000 SALES 234,000
Inventory, beg 30,000 Less: Cost of Sales
expenses 30,000 Inventory, beg 30,000
240,00 Shipment from Home Office 240,000
Shipment from Home Office 0 Inventory, end -60,000 210,000
Grofit Profit 24,000
Home Office 6,000 Less: expenses 30,000
6,000 Net Income (6,000)
Income and Expense Summary

B. Prepare the closing entries for the Home Office including the entries necessary to record the true branch net
income.
129,00
BOOK OF HOME OFFICE Retained Earnings 0
Branch LOSS 6,000
Investment in Branch 6,000

930,00
SALES 0 LEZNER Corporation - Branch
Inventory, end 90,000 Stateme of Profit or Loss
240,00 for the year ended Dec 31, 2018
Shipment to Branch 0 SALES 930,000
Branch Loss 6000 Less: Cost of Sales
129,00 Inventory, beg 75,000
Retained Earnings 0 Purchases 900,000
Inventory, beg 75,000 Shipment to Branch 240,000
150,00 Inventory, end 90,000 645,000
expenses 0 Grofit Profit 285,000
900,00 Less: expenses 150,000
Purchases 0 Less: Branch Loss 6,000
Net Income 129,000
Income and Expense 129,00
Summary 0
 C. Prepare the eliminating entries and a combine working papers

LEZNER Corporation
Working Papers for Combined Financial Statement
December 31, 2018
Home Branch Elimination Combined
Office Statemen
t
DR CR
Statement of Profit or Loss:
Sales 930,000 234,000 1,164,000
Less: Cost of Sales
Inventory, beg 75,000 30,000 105,000
Purchases 900,000 900,000
Shipment to Branch 240,000 240000 0
Shipment from Home Office 240,000 240000 0
Goods Available for Sale 735,000 270,000 1,005,000
Inventory, end -90,000 -60,000 -150,000
645000 210,000 855,000
Gross Profit 285,000 24,000 309,000
Branch Profit -6000 6000 0
Selling Expenses 60,000 12,000 72,000
Administrative Expenses 90,000 18,000 108,000
Profit/(Loss) for the Period 129,000 -6000 129,000

Statement of Retained Earnings/Home Office Control:

Home Office Control (Pre-Closing Balance) 120,000 120,000 0
Retained Earnings, beg 240,000 240,000
Add: Profit (Loss) 129,000 -6000 129,000
Retained Earnings / Home Office Control, end (carry 369,000 114,000 369,000
forward to the SFP)

Statement of Financial Position:

Cash 60,000 12,000 72,000
Accounts Receivable 90,000 48,000 138,000
Inventory, End 90,000 60,000 150,000
Equipment (net) 150,000 150,000
Branch Control 114,000 114,00 0
0
504,000 120,000
Total Assets 510,000

Accounts Payable 45,000 6,000 51,000

Share Capital 90,000 90,000
Retained Earnings, end 369,000 369,000
Home Office, end 114,000
Working Paper Eliminating Entries 0
Total Liabilities & Equity 504,000 120,000
240,00 360,000 360,00 510,000
Shipment to Branch 0 0
Shipment from HO 240,000

120,00
Home Offfice Control, (pre-closing balance) 0
Branch Loss 6,000
Investment in Branch 114,000
Problem 2
Requirements:
Prepare the necessary entries.

Book of Home Office Book of Branch

Date Account Title Debit Credit Date Account Title Debit Credit
a. Investment in Branch 100,000 a. Cash 100,000
Cash 100,000 Home Office 100,000

b. b. Shipment from Home Office 200,00

Investment in Branch 200,000 0
Shipment to Branch 200,000 Home Office 200,000

C. Expense 9,000
Cash 9,000

Investment in Branch 3,000 c. Expense 3,000

Expense 3,000 Home Office 3,000

d. Cash 4,000 d. Home Office 4,000

Investment in Branch 4,000 Accounts Receivable 4,000

e. Depreciation expense 100,000

Accumulated dep. 100,000

Investment in Branch 5,000 e. Depreciation Expense 5,000

Depreciation expense 5,000 Home Office 5,000

f. Cash 60,000 f. Home Office 60,000

Investment in Branch 60,000 Cash 60,000