CHAPTER 8 SUGGESTED ANSWERS

EXERCISES
Exercise 8 - 1 (a) (b) (c) (d) (e) (f) Working Fund - Agency Cash Accounts Receivable - Agency Sales - Agency Cash Accounts Receivable - Agency Expenses - Agency Cash Expenses - Agency Cash Cost of Sales - Agency Shipments to Agency 5,000 5,000 50,000 50,000 35,000 35,000 4,500 4,500 2,250 2,250 36,000 36,000

Exercise 8- 2 (a) Working Fund - Makati Agency Samples - Makati Agency Cash Shipments to Makati Agency Accounts Receivable - Makati Agency Sales - Makati Agency Cost of Sales - Makati Agency Shipments to Makati Agency Salaries and Commission - Makati Agency Furniture and Fixtures - Makati Agency Cash Delivery Expense - Makati Agency Office Supplies Expense - Makati Agency Cash Samples Expense - Makati Agency Samples - Makati Agency Office Supplies - Makati Agency 10,000 60,000 10,000 60,000 200,000 200,000 116,000 116,000 20,000 45,000 65,000 6,200 1,000 7,200 25,000 25,000 300

(b) (c) (d)

(e)

(f) (g)

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Office Supplies Expense (h) (I) Depreciation Expense - Makati Agency Accumulated Depr. - Furniture & Fixtures Sales - Makati Agency Agency Income Cost of Sales - Makati Agency Salaries and Commission - Makati Agency Delivery Expense - Makati Agency Samples Expense - Makati Agency Office Supplies Expense - Makati Agency Depreciation Expense - Makati Agency Agency Income Income Summary Home Office Books (a) (b) (c) (d) (e) (f) (g) (h) Cash Iloilo Branch Iloilo Branch Cash Expenses Iloilo Branch Iloilo Branch Shipments to Iloilo Branch Shipments to Iloilo Branch Iloilo Branch Furniture and Fixtures Cash Iloilo Branch Accumulated Depr. - Furniture & Fixtures Branch Income Branch 20,000 1,250

300 1,250 200,000 30,850 116,000 20,000 6,200 25,000 700 1,250 30,850 30,850

(j)

Exercise 8-3

20,000 3,500 3,500 1,200 1,200 32,000 32,000 15,000 15,000 5,500 5,500 550 550 2,600 2,600

Branch Office Books

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(a)

Home Office

20,000

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Cash (b) (c) (d) (e) (f) (g) (h) Expenses Home office Home Office Cash Shipments from Home Office Home Office Home Office Shipments from Home Office Memo entry Depreciation Expense Home Office Home Office Income Summary Home Office Books (a) (1) (5) Dagupan Branch Shipments to Branch Cash Dagupan Branch Branch Office Books (1) (2) (3) Shipments from Home Office Home Office Accounts Receivable Sales Expenses Cash Accrued Expenses Cash Sales Discount Accounts Receivable Home Office Cash 300,000 300,000 550 3,500

20,000 3,500 1,200 1,200 32,000 32,000 15,000 15,000

550 2,600 2,600

Exercise 8-4

300,000 150,000 150,000

300,000 390,000 390,000 74,000 72,000 2,000 288,000 6,000 294,000 150,000 150,000

(4)

(5)

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(6) (7) (b)

Furniture and Fixtures Cash Expenses Accumulated Depr. - Furniture & Fixtures Merchandise Inventory Sales Shipments from Home Office Expenses Sales Discounts Income Summary Income Summary Home Office

40,000 40,000 8,000 8,000 60,000 390,000 300,000 82,000 6,000 62,000 62,000 62,000

(c) Honda Sales, Inc. Statement of Recognized Income and Expenses - Branch For the Year Ended December 31,2008 Sales Less: Sales Discount Cost of sales: Shipment to Home Office Less: Inventory, end 240,000 Gross Profit Expenses 82,000 Net Profit (d) Honda Sales, Inc. Statement of Financial Position - Branch December 31,2008 Assets Cash (-720,00 + 288,000 - 150,000 - 40,000) Accounts Receivable (390,000 294,000) Merchandise Inventory Furniture and Fixture Less: Accumulated Depreciation Total Assets Liabilities Accrued Expenses Home Office (300,000 - 150,000 + 62,000) Total Liabilities 214,000 P P 2,000 212,000 P 26,000 96,000 60,000 P 40,000 8,000 32,000 P 214,000 P 390,000 6,000 P 300,000 60,000 P 144,000 P 62,000 P384,000

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Exercise 8- 5 Home Office Books (a) (b) (c) (d) Furniture and Fixtures Branch Branch Cash Branch Accumulated Depr. - Furniture & Fixtures Furniture & Fixtures - new Accumulated Depr. - Furniture & Fixtures Branch Income Furniture & Fixtures - old Cash Branch Office Books Home Office Accounts Payable Accounts Payable Home Office Depreciation Expense Home Office Memo entry 24,500 24,500 24,500 24,500 2,450 2,450 40,000 2,450 7,050 24,500 25,000 24,500 24,500 24,500 24,500 2,450 2,450

(a) (b) (c) (d)

Exercise 8-6 Jan. 10 10 16 Notes Payable Home Office Furniture and Fixtures Home Office Shipments from Home Office Home Office Home Office Cash Home Office Shipments from Home Office Home Office Accounts Receivable 2,500 2,500 10,000 10,000 6,500 6,500 2,000 2,000 1,200 1,200 150 150

16 20 25

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30 31 Exercise 8 -7

Expenses Home office Home Office Income Summary Honda Company Reconciliation of Home Office and Branch Accounts December 31,2008 HO Books

800 800 750 750

Unadjusted balances Adjustments; (a) Merchandise in transit (b) Collection of home office accounts recl (c) Error in recording the net income of branch (P1,215 - P1,125) (d) Merchandise returned by branch still in transit Adjusted balances Requirement 2 Home Office Books (b) (c) (d) Branch Accounts Receivable Branch Branch Income Shipments to Branch Branch Branch Books (a) Shipments from Home Office Home Office Exercise 8-8 Home Office Books (a) (b) (c) Allowance for Doubtful Accounts Makati Branch Makati Branch General and Administrative Expense Manila Branch Makati Branch

Branch Acct. P 8,400 2,500 90 ( 640) P 10,350

Branch Books HO Acct. P 9,735 615

_______ P 10,350

2,500 2,500 90 90 640 640

615 615

600 600 1,250 1,250 1,200 1,200

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(d)

Makati Branch Allowance for Uncollectible Accounts Branch Books

850 850

(a) (b) (c) (d)

Home Office Accounts Receivable General and Administrative Expenses Home Office No entry Uncollectible Accounts Expense Home office

600 600 1,250 1,250

850 850

PROBLEMS
Problem 8-1 (a) Samples - Cebu Agency Advertising Materials - Cebu Agency Shipments to Cebu Agency Advertising Materials Working Fund - Cebu Agency Cash Accounts Receivable - Cebu Agency Sales - Cebu Agency Cost of Sales - Cebu Agency Shipments to Cebu Agency 60,000 35,000 60,000 35,000 30,000 30,000 330,000 330,000 250,000 250,000

(b) (c)

(d)

Cash Sales Discounts - Cebu Agency Accounts Receivable - Cebu Agency Rent Expense - Cebu Agency Delivery Expense - Cebu Agency Repairs and Maintenance - Cebu Agency Cash Salaries and Wages - Cebu Agency Commission Expense - Cebu Agency Salaries and Wages Commission Expense

245,000 5,000 250,000 15,000 3,000 2,200 20,200 10,200 33,000 10,200 33,000

(e)

(f)

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(g) (g) (h)

Samples Expense - Cebu Agency Samples - Cebu Agency Advertising Materials Expense - Cebu Agency Advertising Materials - Cebu Agency Sales - Cebu Agency Agency Income Cost of Sales - Cebu Agency Sales Discounts - Cebu Agency Rent Expense - Cebu Agency Delivery Expense - Cebu Agency Repairs and Maintenance - Cebu Agency Salaries and Wages - Cebu Agency Commission Expense - Cebu Agency Samples Expense - Cebu Agency Advertising Materials Expense - Cebu Agency Income Summary Agency Income Home Office Books

15,000 15,000 10,500 10,500 330,000 13,900 250,000 5,000 15,000 3,000 2,200 10,200 33,000 15,000 10,500 13,900 13,900

(I)

Problem 8- 2 (a) (b) (c) (d) Branch Cash Branch Shipments to Branch No entry Branch Cash Equipment Gain on Transfer of Equipment No entry Expenses Cash and (h) no entry Cash Branch Branch Books (a) Cash Home Office 150,000 150,000 52,500 52,500 90,000 3,000 75,000 12,000 7,500 7,500 150,000 150,000 90,000 90,000

(e) (f) (g) (I)

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(b) (c) (d) (e)

Shipments from Home Office Home Office Purchases Cash Equipment Home Office Accounts Receivable Sales Cash Accounts Receivable

90,000 90,000 120,000 120,000 90,000 90,000 250,000 250,000 100,000 100,000

(f) (g) (h) (I)

No entry Depreciation Expense - Equipment Accumulated Depr. - Equipment Selling and Administrative Expenses Cash Home Office Cash 9,000 9,000 45,000 45,000 52,500 52,500

Problem 8-3 Requirement 1 a. b. c. d. e. f. g. Accounts Receivable Sales Purchases Accounts Payable Shipments from Home Office Home office Cash Accounts Receivable Accounts Payable Cash Allowance for Uncollectible Accounts Accounts Receivable Home Office Cash 80,000 80,000 21,000 21,000 40,000 40,000 76,000 76,000 20,200 20,200 1,200 1,200 30,000 30,000

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h. I. j.

Expenses Cash Expenses Home Office Prepaid Expenses Accrued Expenses Expenses Allowance for Doubtful Accounts Accumulated Depreciation Merchandise Inventory, end Sales Income Summary Merchandise Inventory, beg. Shipments from Home Office Purchases Expenses Home Office Income Summary

24,800 24,800 1,600 1,600 200 400 1,700 1,100 1,200 38,800 80,000 3,300 33,000 40,000 21,000 28,100 3,300 3,300

k.

l.

Requirement 2 Volvo Company Statement of Recognized Income and Expenses - Branch For the Year Ended December 31, 2008 Sales Cost of goods sold: Inventory, January 1 Purchases Shipments from home office Cost of goods available for sale Less Inventory, December 31 Gross profit Operating expenses Net loss Volvo Company Statement of Financial Position - Branch December 31, 2008 P80,000 P33,000 21,000 40,000 P94,000 38,800

55,200 P24,800 28,100 P 3,300

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Assets Cash (7,000 + 76,000 + 20,200 - 30,000 - 24,800) Accounts Receivable (24,400 + 80,000 - 76,000 -1,200) Less Allowance for Uncollectible Accounts Merchandise Inventory Prepaid Expenses Furniture and Fixtures Less Accumulated Depreciation Total Assets Liabilities Accounts Payable (4,000 + 21,000 - 20,200) Accrued Expenses Home Office (60,500 + 40,000 - 30,000 + 1,600 - 3,300) Total Liabilities Volvo Company Statement of Changes in Home Office Account For the Year Ended December 31, 2008 Home office account balance, January 1 Add: Shipments from home office Expenses paid by home office Total Deduct: Remittance to home office Net loss Home office account balance, December 31 Requirement 3 c. g. i. Davao Branch Shipments to Branch Cash Davao Branch Davao Branch Cash Branch Income Davao Branch Problem 8-4 Requirement 1 Branch Books a. Cash Shipments from Home Office Accounts Receivable 15,000 102,000 26,000 P 60,500 P 40,000 1,600 P 30,000 3,300 41,600 P102,100 33,300 P 68,800 P 8,000 P27,200 1,600 P 7,700 6,600 25,600 38,800 900 1,100 P74,400 P 4,800 800 68,800 P74,400

40,000 40,000 30,000 30,000 1,600 1,600 3,300 3,300

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Home Office Home Office Cash b. c. d. e. f. g. Accounts Receivable Sales Cash Accounts Receivable Purchases Accounts Payable Accounts Payable Cash Expenses Cash Cash Home Office Accounts Receivable Shipments from Home Office Home Office Home Office Cash Home Office Books a. Bacolod Branch Cash Shipments to Branch Accounts Receivable Store Furniture and Fixtures Bacolod Branch b. c. d. e. Accounts Receivable Sales Cash Accounts Receivable Purchases Accounts Payable Accounts Payable 143,000 9,000

143,000 9,000 62,000 62,000 26,000 26,000 30,000 30,000 14,500 14,500 12,500 12,500 16,000 1,500 17,500 12,500 12,500 10,000 10,000

h. I.

15,000 102,000 26,000 9,000 9,000 346,000 346,000 400,000 400,000 316,000 316,000 362,000

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Cash f. Expenses Accrued Expenses Cash Allowance for Uncollectible Accounts Bacolod Branch Bacolod Branch Shipments to Branch Cash Bacolod Branch 89,500 2,500

362,000

92,000 1,500 1,500 12,500 12,500 10,000 10,000

g. h. I.

Requirement 2 Jazz Company Statement of Recognized Income and Expenses - Bacolod Branch For the Month Ended January 31, 2008 Sales Cost of goods Sold: Shipments from Home Office (102,000 + 12,500 + 6,000) Purchases Cost of Goods Available for Sale Less Merchandise Inventory, December 31 (9,800 + 600) Gross Profit Expenses (12,500 + 4,750 + 350+ 3,500) Net Loss Jazz Company Statement of Financial Position - Bacolod Branch January 31, 2008 Assets Cash (15,000 - 9,000 + 26,000 - 14,500 - 12,500 + 16,000 - 10,000) Accounts Receivable (62,000 + 26,000 - 26,000 17,500) Merchandise Inventory (98,000 + 6,000) Total Assets Liabilities Accounts Payable (30,000 - 14,500) Accrued Expenses P 11,000 44,500 104,000 P159,500 P 15,500 3,500 P 62,000 P120,500 30,000 P150,500 104,000

46,500 P 15,500 21,100 P 5,600

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Home Office (143,000-9,000-1,500+12,500-10,000+6,000+4,750+350 -5,600) Total Liabilities Jazz Company Statement of Recognized Income and Expenses - Home Office For the Month Ended January 31, 2008 Sales Cost of Goods Sold: Merchandise Inventory, January 1 Purchases Cost of Goods Available for Sale Less Shipments to Branch (102,000 + 12,500 + 6,000) Cost of Goods Available for Own Sale Less Merchandise Inventory, December 31 Gross Profit Expenses (89,500 - 4,750 + 1,000 + 7,500) Net Income from Own Operations Less Branch Net Loss Net profit Income Tax Net Profit Jazz Company Statement of Financial Position - Home Office January 31, 2008 Assets Cash (150,000 - 15,000 + 400,000 362,000 - 92,000 + 10,000) Accounts Receivable (420,000 - 26,000 + 346,000 - 400,000) Less Allowance for Uncollectible Accounts (12,000 - 1,500) Merchandise Inventory Branch (143,000 - 9,000 - 1,500 + 12,500 - 10,000 + 6,000 + 4,750+ 350 - 5,600) Store Furniture and Fixtures (150,000 + 9,000) Less Accumulated Depreciation (46,000 + 1,350) Total Assets Liabilities and Shareholders Equity Accounts Payable (337,500 + 316,000 - 362,000) Accrued Expenses Income Tax Payable Ordinary Share Capital (282,000 + 36,650) Retained Earnings (282,000 + 23,822 Total Liabilities and Shareholders Equity Requirement 3

140,500 P159,500

P346,000 P460,000 316,000 P776,000 120,500 P655,500 445,000

210,500 P135,500 93,250 P 42,250 5,600 P 36,650 12,828 P23,822

P 91,000 P340,000 10,500 329,500 445,000 140,500 P159,000 47,350 111,650 P1,117,650

P 291,500 7,500 12,828 500,000 305,822 P1,117,650

Jazz Company Combined Statement of Recognized Income and Expenses for Home Office and Branch For the Month Ended January 31, 2008

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Sales Cost of Goods Sold: Merchandise Inventory, January 1 Purchases Cost of Goods Available for Sale Less Merchandise Inventory, December 31 Gross Profit Expenses Net Profit Income Tax Net profit

P408,000 P460,000 346,000 P806,000 549,000

257,000 P151,000 114,350 P 36,650 12,828 P 23,822

Jazz Company Combined Statement of Financial Position for Home Office and Branch January 31, 2008 Assets Cash Accounts Receivable Less Allowance for Uncollectible Accounts Merchandise Inventory Store Furniture and Fixtures Less Accumulated Depreciation Total Assets Liabilities and Shareholders Equity Accounts Payable Accrued Expenses Income Tax Payable Ordinary Share Capital Retained Earnings Total Liabilities and Shareholders Equity Requirement 4 Branch Books a. b. Shipments from Home Office Home Office Expenses 6,000 6,000 4,750 P 307,000 11,000 12,828 500,000 305,822 P1,136,650 P 102,000 P384,500 10,500 P159,000 47,350 374,000 549,000 111,650 P1,136,650

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Home Office c. Expenses Home Office P22,500 + P9,000 = P31,500/7.5 yrs x 1/12 Expenses Accrued Expenses Sales Merchandise Inventory, end Income Summary Shipments from Home Office Purchases Expenses f. Home Office Income Summary Home Office Books a. b. c. Bacolod Branch Shipments to Branch Bacolod Branch Expenses Expenses Bacolod Branch Accumulated Depreciation ( 150,000 - 30,000 = 120,000 x 10% x 1/12 = 1,000 ) Expenses Accrued Expenses Branch Income Bacolod Branch Sales Shipments to Branch Merchandise Inventory, end Income Summary Merchandise Inventory, beg. Purchases Expenses Branch Income Income Tax Income Tax Payable Income Summary 6,000 5,600 350

4,750 350 3,500 3,500 62,000 104,000 5,600 120,500 30,000 21,100 5,600

d. e.

6,000 4,750 4,750 1,000 350 1,350 7,500 7,500 5,600 5,600 346,000 120,500 445,000 36,650 460,000 316,000 93,250 5,600 12,828 12,828 12,828

d. e. f.

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Income Tax g. Income Summary Retained Earnings 23,822

12,828 23,822

Problem 8-5 Requirement 1 Feroza Company Working Paper for Combined Financial Statement For the Year Ended December 31,2008 Adjustments Eliminations Dr. Cr. Combined Income Statement Dr. Cr. Combined Balance Sheet Dr. Cr. 84,900 10,500 176,550 180,000 72,150

Debits Cash NR AR Inventories F&E Branch Cur. CGS OE Credits AP CS HO Cur. RE Sales Net Profit

HO 63,000 10,500 120,600 143,700 72,150 124,050 300,750 104,250 939,000 61,500 300,000

BR 21,900 55,950 36,300

a.124,050 128,700 32,850 275,700 429,450 137,100

61,500 300,000 124,050 a.124,050 37,500 151,650 275,700 124,050 124,050 566,550 125,100 691,650 691,650 691,650 691,650 524,100 125,100 524,100

37,500 540,000 939,000

Requirement 2 a. Sales Income Summary 151,650 9,900

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Cost of Goods Sold Operating Expenses b. Home Office Income Summary 9,900

128,700 32,850 9,900

Requirement 3 a. b. Branch Income Branch Income Summary Branch Income 9,900 9,900 9,900 9,900

Problem 8-6 Requirement 1 Isuzu Company Reconciliation of Home Office and Branch Accounts January 31, 2008 Home Office Books Branch Acct. P77,150 Branch Books Home Office Acct. P56,450 600 4,400 ( 750 ( 540) (16,000) P61,360 90)

Unadjusted balances Add (deduct); Advertising expense charged to branch Merchandise shipment in transit Merchandise shipment for P16,560 recorded as P16,650 Collection of home office account Understatement of 1994 depreciation Remittance to home office in transit Adjusted balances Requirement 2 Home Office Books a. Cash Retained Earnings Accounts Receivable Iloilo Branch Branch Books a. Advertising Expense Shipments from Home Office Home Office

_______ P61,360

16,000 540 750 15,790

600 4,310 4,910

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Problem 8-7 Requirement 1 a. Shipments from Home Office Operating Expenses Home Office Current 57,600 8,100 65,700

b.

Sales Merchandise Inventory, end Income Summary Merchandise Inventory, beg. Shipments from Home Office Operating Expenses Income Summary Home Office Current

778,200 122,180 116,990 47,800 680,800 54,790 116,990 116,990

c.

Requirement 2 a. b. c. Freight-Out Branch Current Cash Branch Current Branch Current Branch Income 470 470 19,200 19,200 116,990 116,990

Requirement 3 Ford Company Reconciliation of Current Account December 31,2008 Branch Acct. P 206,344 Home Office Acct. P120,974 57,600 4,200 3,900 P 186,674

Balances before adjustment Shipment in transit Advertising charged to branch Rent charged to branch Error in charging freight Remittance in transit

(470) (19,200) P 186,674

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Problem 8-8 Mitsubishi Trading Company Reconciliation of Home Office and Branch Accounts December 31, 2008 Unadjusted balances Add (deduct): Error in recording cost of equipment Insurance premium recorded twice by branch Freight for P1,125 recorded as P1,215 Discount from home office not recorded Share of branch in advertising not recorded Error in recording remittance Adjusted balances Requirement 3 a. Office Equipment Advertising Expense Insurance Expense Freight Discount from Home Office Home Office MULTIPLE CHOICE 1. 2. 3. B A A Sales Cost of sales ( 400,0000 - 70,000) Gross profit Expenses [30,000 + 10,000 + (10,000 - 6,000) + 5,000] Net profit Sales Cost of sales w/o freight Add freight Cost of sales w/ freight P400,000 330,000 70,000 49,000 P 21,000 P46,500 x 70% P32,550 1,100 P33,650 3,150 700 675 90 800 2,285 Branch Acct. P225,770 Home Office Acct. P220,485 3,150 675) 90) 800) 700 ________ P222,770 ( ( (

3,000) P222,770

4.

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5.

Sales Less Sales Discount (39,690 / 98%) - 39,690 Cost of sales Gross Profit Expenses: Selling Administrative (46,500 x 5%) Samples Expenses Net Profit 17,500 + 8,000 +9,250 + (50,000 x 60% x 1/6) C Sales Cost of sales Gross Profit Expenses Net Income P 87,00 / 125% = Sales Cost of sales Gross Profit Expenses (350 + 250) Net Income

P46,500 810

P45,690 33,650 P12,040

P 2,820 2,325 1,900

7,045 P 4,995

6. 7.

P176,000 105,000 P 71,000 39,750 P 31,250 P70,000 P 87,500 70,000 P 17,500 6,000 P 11,500

8. 9.

D B

10 11 12 13

A C B A Sales Cost of sales Shipments Less Inventory, end Gross Profit Expenses Net Profit P17,500 + 8,680 203,500 (186,120 25,245 18,755) = 23,870 Home Office Current Branch Income Correct branch account - current P 48,125 23,870 P 71,995 P74,000 P67,680 9,180 58,500 P15,500 6,820 P 8,680 P 26,180

14 15 16 17

A A D D

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18

Sales Cost of Sales: Shipments from home office Less Inventory, Dec. 31 Gross profit Expenses Net Profit P90,000 + P14,400 P1,500 + 43,800 + 37,170 Net Sales (198,720 - 3,600) Cost of sales Beg. Inventory Shipments Goods available for sale End. Inventory Gross Profit Expenses (57,930 + 1,920) Net Profit Balances before adjustment Adjustments: 1. Shipments in transit 2. HO AR collected by branch 3. Supplies returned 4. Error in recording Br. net income 5. Cash to Branch in transit

P112,500 P120,000 30,000 90,000 P 22,500 8,100 P 14,400 P104,400 P 82,470 P 195,120 P 37,170 136,000 P 173,170 41,370

19 20 21

C A D

131,800 P 63,320 59,850 P 3,470

22

BR. Acct. HO Acct. P150,000 P117,420 37,500 10,500 (4,500) (1,080) 25,000 25,000 P179,920 P 179,920 P 179,920 BR Acct. P43,500 (550) P42,950 900 P42,950 P 100,000 P21,000 61,000 P82,000 19,000 HO. Acct. P41,900 60

23 24

D C Balances Error in recording allowance Advances taken by Pres. Share in advertising expense

25

Sales Cost of sales Inventory, beg. Merchandise from Home Office Merchandise available for sale Less Inventory, end Gross profit Operating Expenses Net profit of Branch A

63,000 P37,000 21,000 P16,000

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26

C Imprest branch fund Accounts Receivable, Jan.1 Inventory, Jan.1 Home Office account

Branch A P 2,000 55,000 21,000 P 78,000

Branch B P 1,500 43,500 19,000 P 64,000

27 28

B C Imprest branch fund Accounts Receivable, Dec. 31 Inventory, Dec. 31 Balance of Branch account - current Sales Cost of sales Inventory, Jan.1 Merchandise from Home office Merchandise available for sale Less Inventory, Dec.31 Gross profit Operating Expenses Net profit of Branch B P 1,500 53,000 12,000 P 67,000 P 80,000 P 19,000 47,000 P 66,000 12,000

29

54,000 P 26,000 14,300 P 11,700 Branch Acct. P 30,670 (47,800) 160,000 (8,900) P 133,970 HO Acct. P 107,970 22,000

30

D Beg. Balances 1. Branch remittances 2. Shipment to branch 3. Home office expense paid by branch 4. Branch receivable collected by branch

HO Account. P 30,670 (55,000) 138,000 (5,700)

P 107,970 31 D Unadjusted balances 1. Remittance in transit 2. Shipment in transit 3. Home office expense paid by branch 4. Branch receivable collected by branch 5. Branch net profit Branch Acct. P 133,970 (7,200) (5,700) 6,500 P 127,570

(8,900) 6,500 P 127,570 P (10,000) ( 65,700) P (75,700) P (53,960) 75,000 ( 90)

32

Marketing Expense of another branch charged to Butuan Butuans remittance credited to Davao Net adjustment in Home Office Banch account Fixed account not recorded by Butuan Inventory transfer recorded twice by Butuan Error in recording debit memo

33

4,650

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Net adjustment in Branch Books 34 D. Unadjusted balances 35 B. Net adjustment in Branch Account Adjusted balances Branch Account P165,920 (75,700) P 90,220

20,950

Home Office Account P111,170 (20,950) P 90,220