POLYTECHNIC UNIVERSITY OF THE PHILIPPINES

College of Accountancy and Finance

HOME OFFICE, BRANCH AND AGENCY ACCCOUNTING

AGENCY

Agencies are established to display merchandise and to take customers’ order but they don’t stock merchandise to fill
their orders or to pass on customers’ credit. Agencies are given only samples of merchandise to display. Agencies are
not required to have a complete accounting system. They keep only records of cash receipts and disbursements.

Proforma Entries:
No Transactions Home Office Books
Working Fund – Agency xxx
1 Establishment of Working Fund
Cash xxx
Samples – Agency xxx
2 Shipment of Samples
Shipment to Agency xxx
Accounts Receivable xxx
3 Receipts of orders from customers
Sales – Agency xxx
Cost of Sales xxx
4 Cost of sales associates with agency sales
Shipment to Agency xxx
Expenses - Agency xxx
5 Replenishment of Working Fund
Cash xxx
Expenses – Agency xxx
6 Adjustment of Samples
Samples – Agency xxx
Expenses – Agency xxx
7 Payment of agency expenses by home office
Cash xxx
Sales – Agency xxx
Cost of Sales – Agency xxx
8 Closing of Revenues and Expense
Expenses – Agency xxx
Agency Income xxx
Agency Income xxx
9 Closing of Agency Income to Retained Earnings
Retained Earnings xxx

PROBLEM 1
PUP Company put up an agency in Sta. Mesa and had the following transactions with Sta. Mesa agency for the month of
January:
• PUP Company transferred merchandise to Sta. Mesa agency to be used as samples - P13,000 and P10,000 as
working fund.
• Receipts of sales order from the agency – P130,000.
• Collection of agency accounts by the home office – P91,000.
• PUP Company paid P11,700 for agency expenses.
• Replenishment of the agency working fund upon receipt of expense vouchers – P6,850.
• Cost of goods sold identified with the agency sales – P93,000.
• Appraised value of the samples at the end of the month is estimated to be P8,000.

Determine the following:

a. Net Income (Loss) of the agency
b. Entries to record the transactions in the books of PUP Company and Sta, Mesa Agency

HOME OFFICE AND BRANCH ACCOUNTING

Branches stock merchandise coming from the home office or acquired from other suppliers, make sale to customers,
pass on customer’s credit, collect receivables, incur expenses and perform other functions normally associated with
the operations of a separate entity. Branches have their own books of accounts and prepare financial statements and
submit them to home office for consolidation.

Proforma Entries
No Transactions Home Office Branch
Branch xxx Cash xxx
1 Cash sent by Home Office to Branch
Cash xxx Home Office xxx
Merchandise sent by Home Office to Branch xxx Shipment from HO xxx
2
Branch Shipment to Branch xxx Home Office xxx
Merchandise returned by Branch to Shipment to Branch xxx Home Office xxx
3
Home Office Branch xxx Shipment from HO xxx
Cash remitted by Branch to Home Cash xxx Home Office xxx
4
Office Branch xxx Cash xxx
Fixed assets purchased by Home
Fixed Assets xxx
5 Office for the Branch (records are Memorandum Entry
Cash xxx
kept by Home Office)
Fixed assets purchased by Home
Branch xxx Fixed Assets xxx
6 Office for the Branch (records are
Cash xxx Home Office xxx
kept by Branch)
 Adjusting entry for the depreciation in Branch xxx Depreciation Expense xxx
7
No. 5 Accum. Depreciation xxx Home Office xxx
Adjusting entry for the depreciation in Depreciation Expense xxx
8 No Entry
No. 6 Accum. Depreciation xxx
Fixed assets purchased by Branch Fixed Assets xxx Home Office xxx
9
(records are kept by Home Office) Branch xxx Cash xxx
Accounts payable of Branch paid by Branch xxx Accounts Payable xxx
10
Home Office Cash xxx Home Office xxx
Accounts receivable of Home Office Branch xxx Cash xxx
11
collected by Branch Accounts Receivable xxx Home Office xxx
Branch expenses paid by the Home Branch xxx Expenses xxx
12
Office Cash xxx Home Office xxx
Branch expenses charged by Home Branch xxx Expenses xxx
13
Office Expenses xxx Home Office xxx

PROBLEM 2
Home office and branch accounts of CAF Company show activities for the month of February:
HOME OFFICE
Cash remitted 42,000 Beginning Balance 15,000
Merchandise returned by HO 3,000 Shipment at cost 32,000
Fixed assets charged to HO 5,000 Expense allocated from HO 14,500
HO note collected with interest 2,100

BRANCH
Beginning Balance 15,000 Branch remittance 36,000
Shipment at cost 37,000 Fixed assets purchased by branch 5,000
Expense allocated to Branch 15,400
Note collected by branch 2,000

Except for a branch error in recording expense allocations and home office error in not recording interest, all
differences in the accounts are due to timing differences in recording reciprocal information.

Determine the following:

a. Unadjusted and adjusted balance of the Home Office Account

CLOSING ENTRIES

Proforma Entries
No Transactions Home Office Branch
Inventory, end xxx Inventory, end xxx
Sales xxx Sales xxx
Shipment to Branch xxx Inventory, beg xxx
To close the balance of revenue and
1 Inventory, beg xxx Shipment from HO xxx
expenses accounts
Purchases xxx Purchases xxx
Expenses xxx Expenses xxx
Income Summary xxx Income Summary xxx
To close the branch net profit to the (already recorded as an adjusting Income Summary xxx
2
HO account entry) Home Office xxx
Income Tax Expense xxx
3 To record income taxes No Entry
Income Tax Payable xxx
To close the branch income to Income Branch xxx
4 No Entry
Summary Income Summary xxx
To close the combined net income to Income Summary xxx
5 No Entry
Retained Earnings Retained Earnings xxx

CONSOLIDATION OF FINANCIAL STATEMENTS

Consolidation Procedures:
1. Combine like items of assets, liabilities, equity, revenues and expenses of the home office and branch.
2. Eliminate inter-company transactions.
• Eliminate home office and branch account.
Home Office xxx
Branch xxx

• Eliminate merchandise shipment accounts.

Shipment to Branch xxx
Shipment from HO xxx

• Eliminate allowance for overvaluation of inventory.

Allowance for overvaluation xxx
Inventory xxx
 • Eliminate intercompany sales and purchases.
Sales xxx
Cost of Sales xxx

• Eliminate intercompany payables and receivables.

Accounts Payable xxx
Accounts Receivable xxx

PROBLEM 3
The unadjusted trial balance of the Home Office and Branch as of December 31, 2017 is as follows:
Accounts Home Office Branch
Cash 116,000 31,250
Accounts Receivable 104,250 63,000
Inventory 200,600 0
Branch 196,500 0
Furniture and Fixtures 100,000 40,000
Accumulated Depreciation 22,000 0
Accounts Payable 112,750 51,250
Home Office 0 196,500
Share Capital 250,000 0
Retained Earnings 302,100 0
Sales 525,000 330,000
Shipment to Branch 251,000 0
Purchases 612,500 112,500
Shipment from HO 0 251,000
Operating Expenses 133,000 80,000
Total 1,462,850 1,462,850 577,750 577,750

Adjustments:
• Depreciation Expense: Home Office – P5,900; Branch – P3,250
• Inventory, end: Home Office – P242,500; Branch – P117,500

Determine the following:

a. Adjusting Entries on both books
b. Closing Entries on both books
c. Elimination Entries
d. Net Income of Home Office
e. Net Income of Branch
f. Consolidated Net Income

SHIPMENT TO BRANCH AT ABOVE COST

Proforma Entries
Home Office Branch
Branch xxx
Shipment from HO xxx
Shipment to Branch xxx
Home Office xxx
Allowance for Overvaluation xxx

The billed price is either:

• Based on sales (gross profit rate)
• Based on cost (mark-up rate)

PROBLEM 4
BSA Company operates a branch in Cebu City. Operating data for the home office and branch:
Home Office Branch
Sales 300,000 78,500
Purchases from outsiders 210,000 20,000
Shipment to Branch/from HO 30,000 40,000
Expenses 60,000 12,500
Inventory, 01/01/2017:
From outsiders 80,000 7,500
From home office 0 24,500
Inventory, 12/31/2017:
From outsiders 55,000 5,500
From home office 0 26,000

Determine the following:

a. Inventory on January 1 and December 31 at cost
b. Cost of Sales of the Branch at cost
c. True income of the Branch
d. Consolidated net income
PROBLEM 5
The income statement submitted by Branch to the Home Office for the month of January is as follows:
Sales 600,000
Less: Cost of Sales
Inventory, Jan 1 80,000
Shipment from HO 350,000
Purchases 30,000
Inventory, Jan 31 (100,000) 360,000
Gross Profit 240,000
Less: Operating Expenses 180,000
Net Income (Loss) 60,000

The inventory of the branch consisted of:

January 1 January 31
From home office 70,000 84,000
From outsiders 10,000 16,000

After effecting necessary adjustments, the home office ascertained that the net income of the branch should be
P156,000.

Determine the following:

a. Percentage of billing by home office
b. Allowance for overvaluation of inventory

PROBLEM 6
Duterte Company has a branch in Davao City. Davao branch receives all its merchandise from Duterte at 25% above cost
and sells them at 40% mark-up on cost. Duterte also sells merchandise to outsiders at 40% above cost. Below are the
excerpts from the trial balance of Duterte and Davao branch:
Home Office Branch
Sales 5,880,000 3,360,000
Purchases 6,250,000
Inventory, beginning 350,000 200,000
Shipment to Branch 2,000,000
Shipment from HO 2,375,000
Allowance for overvaluation 540,000
Operating Expenses 1,200,000 325,000

Determine the following:

a. Inventory of branch on December 31
b. Consolidated inventory
c. True income of the branch
d. Consolidated Net Income
e. Allowance for Overvaluation

PROBLEM 7
SM Company just opened a branch in Baguio City this February of the current year. Summary of transactions for the 1st
month of operations follows:
1. Baguio Branch received P15,750 cash from home office to start its operations.
2. Home office shipped merchandise to the branch costing P100,000 at 25% mark-up on cost, of which 20% have
not yet received by the branch.
3. Branch purchases from other suppliers amounted to P89,250.
4. Branch sales for the month amounted to P245,000.
5. Home office debit memo for P3,500 representing the branch’s share on advertising expenses was recorded only
by the branch on the 3rd day of March.
6. Branch operating expenses of P61,250 were paid by the home office.
7. Branch remitted P29,750 to the home office but the home office recorded it only in March.
8. The inventory on hand of the branch is: from outsider – P21,000 and from HO – P37,500.

Determine the following:

a. Unadjusted and adjusted balance of Home Office account
b. Unadjusted and adjusted balance of Branch account
c. Net Income reported by the Branch
d. True Income of the Branch

PROBLEM 8
The Manila branch of Pacman Company is billed for merchandise at 20% gross profit rate. The branch sells them at 25%
above cost. On March 17, the entire branch’s merchandise was destroyed by fire. The branch records that were
recovered show:
Inventory, beginning (at billed price) 165,000
Shipment, Jan 1 – March 17 (at billed price) 100,000
Purchases from outsiders – all were sold at 20% mark-up on cost 7,500
Sales 169,000
Sales returns 3,750
Determine the following:
a. Branch beginning inventory at cost
b. Cost of merchandise destroyed by fire

INTER-BRANCH TRANSFER OF MERCHANDISE WITH EXCESS FREIGHT

There are instances when home office finds it necessary to authorize the transfer of merchandise from one branch to
another branch. Since branches receiving shipments are properly charged with freight and freight is properly accounted
as inventoriable cost, any excess freight should be absorbed by the home office and treated as an operating expense.
On the other hand, any reduction in freight is treated as savings by the home office.

PROBLEM 9
The Home Office shipped merchandise to Baguio Branch costing P10,000 and paid a freight of P650. Baguio Branch was
subsequently instructed to transfer merchandise to Laoag Branch wherein Baguio Branch paid P200 freight. If the
shipment was directly shipped from Home Office to Laoag Branch, the freight cost would have amounted to P700.

Determine the following:

a. Entries to record the transactions
b. Entries to record the transactions assuming the freight from Home Office to Laoag is P1,000.
PROBLEM 1
a Sales 130,000.00
Less: Cost of Sales 93,000.00
Gross Profit 37,000.00
Less: Expenses
Various Expenses 11,700.00
Expenses from WF replenishment 6,850.00
Samples 5,000.00 23,550.00
Net Income 13,450.00

b Samples - Agency 13,000.00

Working Fund - Agency 10,000.00
Shipment to Agency 13,000.00
Cash 10,000.00
To record samples and working fund.

Accounts Receivable 130,000.00

Sales - Agency 130,000.00
To record sales.

Cash 91,000.00
Accounts Receivable 91,000.00
To record collection.

Expenses - Agency 11,700.00

Cash 11,700.00
To record expenses.

Expenses - Agency 6,850.00

Working Fund - Agency 6,850.00
To record WF replenishment.

Cost of Sales - Agency 93,000.00

Shipment to Agency 93,000.00
To record cost.

Loss 5,000.00
Samples - Agency 5,000.00
To record decline in value of samples.

PROBLEM 2
a Branch Account HO Account
Beginning Balance 15,000.00 (15,000.00)
Shipment 37,000.00 (32,000.00)
Expense allocation 15,400.00 (14,500.00)
Note collected by branch 2,000.00 (2,100.00)
Branch remittance (36,000.00) 42,000.00
FA purchased by branch (5,000.00) 5,000.00
Merchandise returned by branch - 3,000.00
Unadjusted Balance 28,400.00 (13,600.00)

Unadjusted Balance 28,400.00 (13,600.00)

Adjustments:
Shipment - (5,000.00)
Expense allocation - (900.00)
Note collected by branch 100.00 -
Branch remittance (6,000.00) -
FA purchased by branch - -
Merchandise returned by branch (3,000.00) -
Adjusted Balance 19,500.00 (19,500.00)

PROBLEM 3
a ADJUSTING ENTRIES:
Home Office Books
Depreciation Expense 5,900.00
 Accumulated Depreciation 5,900.00
To record depreciation.

Ending Inventory 242,500.00

Begininng Inventory 200,600.00
Income Summary 41,900.00
To record and adjust inventory.

Branch Books
Depreciation Expense 3,250.00
Accumulated Depreciation 3,250.00
To record depreciation.

Ending Inventory 117,500.00

Begininng Inventory -
Income Summary 117,500.00
To record and adjust inventory.

b CLOSING ENTRIES:
Home Office Books
Sales 525,000.00
Shipment to Branch 251,000.00
Purchases 612,500.00
Operating Expenses 133,000.00
Depreciation Expenses 5,900.00
Income Summary 24,600.00
To close revenue and expenses.

Branch 750.00
Income Summary 750.00
To close branch income.

Income Summary 67,250.00

Retained Earnings 67,250.00
To close income summary.

Branch Books
Sales 330,000.00
Income Summary 116,750.00
Shipment from HO 251,000.00
Purchases 112,500.00
Operating Expenses 80,000.00
Depreciation Expenses 3,250.00
To close revenue and expenses.

Income Summary 750.00

Home Office 750.00
To close income summary.

c ELIMINATION ENTRIES:
Home Office 197,250.00
Branch 197,250.00
To eliminate HO and branch account.

Shipment to Branch 251,000.00

Shipment from HO 251,000.00
To eliminate shipment account.

d Home Office Branch Total

e Sales 525,000.00 330,000.00 855,000.00
f Less: Cost of Sales
Beginning Inventory 200,600.00 - 200,600.00
Purchases 612,500.00 112,500.00 725,000.00
Shipment to Branch (251,000.00) - (251,000.00)
Shipment from HO - 251,000.00 251,000.00
 Ending Inventory (242,500.00) (117,500.00) (360,000.00)
Gross Profit 205,400.00 84,000.00 289,400.00
Less: Expenses
Operating Expenses 133,000.00 80,000.00 213,000.00
Depreciation Expense 5,900.00 3,250.00 9,150.00
Net Income 66,500.00 750.00 67,250.00

PROBLEM 4
a Mark-Up on Current Billing 10,000.00
Divide by: Current Shipment (at billed price) 40,000.00
Rate based on sales (GP rate) 0.25

01/01/2017 12/31/2017
Inventory of HO 80,000.00 55,000.00
Inventory of Branch - from outsider 7,500.00 5,500.00
Inventory of Branch - from HO 18,375.00 19,500.00
Inventory 105,875.00 80,000.00

b Home Office Branch Total

Beginning Inventory 80,000.00 25,875.00 105,875.00
Purchases 210,000.00 20,000.00 230,000.00
Shipment to Branch (30,000.00) - (30,000.00)
Shipment from HO - 30,000.00 30,000.00
Ending Inventory (55,000.00) (25,000.00) (80,000.00)
Cost of Sales 205,000.00 50,875.00 255,875.00

c Sales 78,500.00
Less: Cost of Sales 50,875.00
Gross Income 27,625.00
Less: Expenses 12,500.00
True Income of the Branch 15,125.00

To check:
Sales 78,500.00
Less: Cost of Sales 60,500.00
Gross Income 18,000.00
Less: Expenses 12,500.00
Net Income reported by Branch 5,500.00
Add: Realized Mark Up 9,625.00
True Income of the Branch 15,125.00

d Home Office Branch Total

Sales 300,000.00 78,500.00 378,500.00
Less: Cost of Sales 205,000.00 50,875.00 255,875.00
Gross Income 95,000.00 27,625.00 122,625.00
Less: Expenses 60,000.00 12,500.00 72,500.00
Consolidated Net Income 35,000.00 15,125.00 50,125.00

PROBLEM 5
a True Income of the Branch 156,000.00
Less: Net Income reported by Branch 60,000.00
Realized Mark Up 96,000.00

Beginning Inventory from HO (at billed price) 70,000.00

Current Shipment from HO (at billed price) 350,000.00
Ending Inventory from HO (at billed price) (84,000.00)
Inventory sold to outsider (at billed price) 336,000.00
Less: Realized Mark Up 96,000.00
Inventory sold to outsider (at cost) 240,000.00

Mark Up 96,000.00
Divide by: Inventory sold to outsider (at cost) 240,000.00
Mark-Up on cost 0.40

b Ending Inventory from HO (at billed price) 84,000.00

 Less: Ending Inventory from HO (at cost) 60,000.00
Allowance for Overvaluation 24,000.00

PROBLEM 6
a Branch
Sales 3,360,000.00
Divide by: 1.40
Cost of Sales 2,400,000.00
Less: Goods Available for Sale 2,700,000.00
Ending Inventory of Branch (at billed price) 300,000.00

b Home Office Branch Total

Beginning Inventory 350,000.00 160,000.00 510,000.00
Purchases 6,250,000.00 - 6,250,000.00
Shipment from HO (at cost) - 2,000,000.00 2,000,000.00
Shipment to Branch (at cost) (2,000,000.00) - - 2,000,000.00
Goods Available for Sale 4,600,000.00 2,160,000.00 6,760,000.00
Less: Cost of Sales (at cost) 4,200,000.00 1,920,000.00 6,120,000.00
Ending Inventory (at cost) 400,000.00 240,000.00 640,000.00

c Home Office Branch Total

d Sales 5,880,000.00 3,360,000.00 9,240,000.00
e Less: Cost of Sales (at cost) 4,200,000.00 1,920,000.00 6,120,000.00
Gross Profit 1,680,000.00 1,440,000.00 3,120,000.00
Less: Operating Expenses 1,200,000.00 325,000.00 1,525,000.00
Consolidated Net Income 480,000.00 1,115,000.00 1,595,000.00

To check:
Sales 3,360,000.00
Less: Cost of Sales 2,400,000.00
Gross Income 960,000.00
Less: Expenses 325,000.00
Net Income reported by Branch 635,000.00
Add: Realized Mark Up 480,000.00
True Income of the Branch 1,115,000.00

At billed price At cost Mark Up

Beginning Inventory from HO 200,000.00 160,000.00 40,000.00
Current Shipment from HO 2,500,000.00 2,000,000.00 500,000.00
Ending Inventory from HO (300,000.00) (240,000.00) (60,000.00)
Inventory Sold to Outsiders 2,400,000.00 1,920,000.00 480,000.00

PROBLEM 7
a Branch Account HO Account
Transfer of cash 15,750.00 (15,750.00)
Shipment of merchandise 125,000.00 (100,000.00)
Purchase of merchandise from other supplier - -
Branch sales - -
Allocation of advertising expense 3,500.00 -
Operating expenses of branch paid by HO 61,250.00 (61,250.00)
Branch remittance - 29,750.00
Unadjusted Balance 205,500.00 (147,250.00)

b Unadjusted Balance 205,500.00 (147,250.00)

Shipment of merchandise - (25,000.00)
Allocation of advertising expense - (3,500.00)
Branch remittance (29,750.00) -
Adjusted Balance 175,750.00 (175,750.00)

c As reported True Income

Sales 245,000.00 245,000.00
Less: Cost of Sales
Beginning Inventory - -
Purchases 89,250.00 89,250.00
Shipment from HO 125,000.00 100,000.00
 Ending Inventory (58,500.00) (51,000.00)
Gross Profit 89,250.00 106,750.00
Less: Expenses 64,750.00 64,750.00
Net Income 24,500.00 42,000.00

To check:
Sales 245,000.00
Less: Cost of Sales 155,750.00
Gross Income 89,250.00
Less: Expenses 64,750.00
Net Income reported by Branch 24,500.00
Add: Realized Mark Up 17,500.00
True Income of the Branch 42,000.00

d At billed price At cost Mark Up

Beginning Inventory from HO - - -
Current Shipment from HO 125,000.00 100,000.00 25,000.00
Ending Inventory from HO (58,500.00) (51,000.00) (7,500.00)
Inventory Sold to Outsiders 66,500.00 49,000.00 17,500.00

PROBLEM 8
a Beginning Inventory (at billed price) 165,000.00
Multiply by: 0.80
Beginning Inventory (at cost) 132,000.00

b Assuming the sales returns came from shipment from HO:

From Outsider From HO Total
Sales 9,000.00 160,000.00 169,000.00
Less: Sales Returns 3,750.00 - 3,750.00
Net Sales 5,250.00 160,000.00 165,250.00
Divide by: 1.20 1.25 1.25
Cost of Sales 4,375.00 128,000.00 132,200.00

Beginning Inventory 165,000.00

Shipment from HO 100,000.00
Purchases 7,500.00
Goods Available for Sale 272,500.00
Less: Cost of Sales 132,375.00
Ending Inventory 140,125.00

Inventory from Outsider 3,125.00

Inventory from HO at cost 109,600.00
Inventory destroyed by fire (at cost) 112,725.00

Assuming the sales returns came from outside purchases:

From Outsider From HO Total
Sales 9,000.00 160,000.00 169,000.00
Less: Sales Returns - 3,750.00 3,750.00
Net Sales 9,000.00 156,250.00 165,250.00
Divide by: 1.20 1.25 1.25
Cost of Sales 7,500.00 125,000.00 132,200.00

Beginning Inventory 165,000.00

Shipment from HO 100,000.00
Purchases 7,500.00
Goods Available for Sale 272,500.00
Less: Cost of Sales 132,500.00
Ending Inventory 140,000.00

Inventory from Outsider -

Inventory from HO at cost 112,000.00
Inventory destroyed by fire (at cost) 112,000.00

PROBLEM 9
a HOME OFFICE BOOKS:
 Baguio Branch 10,650.00
Shipment to Branch (Baguio) 10,000.00
Cash 650.00
To record transfer of goods to Baguio.

Shipment to Branch (Baguio) 10,000.00

Laoag Branch 10,700.00
Excess Freight (Expense) 150.00
Baguio Branch 10,850.00
Shipment to Branch (Laoag) 10,000.00
To record reshipment.

BAGUIO BRANCH BOOKS:

Shipment from HO 10,000.00
Freight In 650.00
Home Office 10,650.00
To record goods received from HO.

Home Office 10,850.00

Shipment from HO 10,000.00
Freight In 650.00
Cash 200.00
To record shipment from Baguio to Laoag.

LAOAG BRANCH:
Shipment from HO 10,000.00
Freight In 700.00
Home Office 10,700.00
To record goods received from HO.

b HOME OFFICE BOOKS:

Baguio Branch 10,650.00
Shipment to Branch (Baguio) 10,000.00
Cash 650.00
To record transfer of goods to Baguio.

Shipment to Branch (Baguio) 10,000.00

Laoag Branch 11,000.00
Baguio Branch 10,850.00
Shipment to Branch (Laoag) 10,000.00
Excess Freight (Gain) 150.00
To record reshipment.

BAGUIO BRANCH BOOKS:

Shipment from HO 10,000.00
Freight In 650.00
Home Office 10,650.00
To record goods received from HO.

Home Office 10,850.00

Shipment from HO 10,000.00
Freight In 650.00
Cash 200.00
To record shipment from Baguio to Laoag.

LAOAG BRANCH:
Shipment from HO 10,000.00
Freight In 500.00
Home Office 10,500.00
To record goods received from HO.