merchandise cost should not include excessive freight charges from the transfer of merchandise

between a home office and its branches or between branch locations

if the home office fails to adjust the unrealized mark-up at the end of the period, its consolidated net profit will
be equal to the total sum of the net profit per branch's and home office's books

if the shipments of merchandise consist of mark-up, the home office credits investment in branch at cost whle
the brach credits home office current at billed price

the adjusting entry to record the realized mark-up on branch inventory is recorded in the brach
books

freight in returning the goods from the branch to the home office, paid by either the home office or
the branch, has a corresponding journal entry in the branch books

as far as the branch is concerned, if the realized mark-up on branch inventory remains to be unadjusted, the
ending inventory in the branch books will become overstated

all interbranch transactions requires a correspinding entry in the home office books

interbrach transfre of cash requires the home office to debit the investment in branch account for
the transferor branch

if the home office current account is credited, the transaction would be the following except

which of the following would require a credit to branch current account? Select all that applies

shipments from home office account is presented as

approportionment of expenses by home office to a branch requires

if branch purchases plant assets that are recorded on the books of the home office, entries
requiring reciprocal accounts would include, except

entries that would require only in the home office books is

investment in branch is credited during

 1

both credit sabi dito so false, dapat reciprocal

0

1
ho- transferor cash
credit niya dapat si transferor cash ho-recipient
0

cash remittance

branch loss;

an adjunct account to arrive at cogas in the

branch income statement

a credit to expense account by invt in branch expenses

home office expenses ho
installation cost on plant asset paid
by home office
shipment of fixed asset to branch where the
home office maintains the fixed asset account

write off of branch accounts receivable, where

receivable account is maintained in home office
books
 invt in b- r
ho-recipient invt in b- t
 ho branch combined
beg invty 200 100 300
purchases from outside 1400 800 2200
freight in 280 160 440
purch disc 35 20 55
pra 98 56 154
net purch 1547 884 2431
shipments to branch 40
shipments from ho 40
cogas 1707 1024 2731 2731
end invty 341 204 545
cogs 1366 820 2186

ho branch combined
beg invty 400 150 550
purchases from outside 2800 1200 4000
freight in 560 240 800
purch disc -70 -30 -100
pra -196 -84 -280
net purch 3094 1326 4420
shipments to branch 100
shipments from ho 120
cogas 3374 1596 4970
end invty 643 210 873 853
cogs 2731 1386 4117
4097

COGAS 600 450

Unrealized intercompany profit, ending 40
COGAS 600 410 1010

COGS 320 240

Realized intercompany profit 100
COGS 320 140 460