On December 31, 2015, the Branch account in the Manila Home Office books shows a valance of p55,500.

You ascertain the

following facts in analyzing this account.
a. On December 31, 2015, merchandise billed at P5,800 was in transit from the home office to the branch.
b. The branch had collected home office accounts receivable of p560; the home office was not notified.
c. On December 29, 2015, the home office mailed a check for P2,000 to the branch, but the accountant for the home
office had recorded the check as a debit to Charitable Contributions; the branch has not received the check as of
December 31, 2015.
d. Branch net income for December 2015 was recorded erroneously by the home office at P840 instead of P480.
e. On December 28, 2015, the branch has returned supplies costing P220 to the home office; the home office had not
recorded the receipt of the supplies as at Dec. 31.
40. Calculate the adjusted balance of the reciprocal accounts at December 31, 2015
a. P49,680 c. P46,980
b. P57,480 d. P54,870

The AB Trading Co. operates a branch in Iloilo. At close of business on December 31, 2015, Home Office account in the
branch books showed a credit balance of P372,900. The interoffice accounts were in agreement at the beginning of the year.
For purpose of reconciling the interoffice accounts, the following facts were ascertained;
a. A furniture costing the home office P4,600 was picked up by the branch as P460. The branch will maintain and use
the asset.
b. The branch write – off uncollectible accounts of P1,260. The allowance for doubtful accounts is maintained on the
books of the home office. The home office was not yet notified.
c. Freight charge on merchandise made by the home office for P2,715 was recorded in the branch books as P7,215.
d. Home office credit memo for P9,710 was recorded by the branch at P7,910.
e. Iloilo branch failed to take up a P2,450 debit memo from the home office.
f. The home office inadvertently recorded a remittance for P3,730 from its Ilocos branch as remittance for its Iloilo
branch.
g. Insurance premium of P1,675 charged by the home office was taken up twice by the branch.
h. A P14,500 branch remittance to the home office initiated on December 28, 2015, was recorded on the home office
books on January 2, 2016.
i. A home office inventory shipment to Ilocos branch on December 29, 2015, was recorded by the branch on January
3, 2016, the billing of P47,000 was at cost.
j. A branch customer remitted a P19,000 to the home office. The home office recorded this cash collection on
December 22, 2015. Meanwhile, back at the branch, no entry has been made yet.
41. Determine the balance of the Investment I Branch account before adjustment:
a. P364,545 c. P319,545
b. P307,515 d. P366,545

Practical Accounting 2 1