Beruflich Dokumente
Kultur Dokumente
TEST II
Home Corporations board of directors decided to create a marketing arm that will take care
of promoting and distributing its products in Davao. The following are the trial balance on
Dec. 31, 2015 after the branch, Davao Marketing, has been in operation for two years:
Cash
Receivables
Inventories
Other Assets, net
Branch, Current
Shipments from Home
Freight In
Purchases
Freight Out
Other Operating Expenses
Totals
Accounts Payable
Share Capital
Retained Earnings
Home Office, Current
Sales
Shipments to Davao
Allowance for Mark-Up, Jan 1
Totals
Homer
P 12,160
20,000
36,000
200,000
118,000
150,000
15,840
78,000
P630,000
P 67,000
200,000
30,900
277,200
52,800
___2,100
P630,000
Davao
P 20,000
38,000
34,600
90,400
57,000
3,420
80,000
13,000
65,000
P 401,420
P 79,160
102,260
220,000
________
P401,420
Home
Davao
Combined
INCOME STATEMENT:
Sales
_________ _________
Cost of Sales
Inventory 1/1
Purchases
Shipments to/from
Freight In
Inventory, 12/31
_________ _________
Cost of Sales
_________ _________
Gross Profit
Freight Out
Other Operating Exp
_________ _________
Net Profit fr Operation
Branch Profit/Loss
_________ _________
Net Profit
_________ _________
_________
_________
_________
_________
_________
_________
STATEMENT OF RE:
Jan 1
Add Net Income
Dec 31
BALANCE SHEET:
Assets
Cash
Receivables, net
Inventories
Other Assets, net
DVO Branch, Current
Allow for Mark-up
Total Assets
________
________
________
________
_________
_________
________
________
________
________
_________
_________
SOLUTION 3BAC
TEST 1
1. C
2. D
3. B
4. A
5. C
6. D
7. False* 8. True
*unsold merchandise of home office (should be of the branch)
9. D
10. A
TEST II
Unadjusted balance
Merchandise in transit including freight
Cash in transit from Branch to HO
HO liability paid by branch
Branch AR collected by HO
Adjusted Balance
Adjusting entries:
Sales
Allow for Mark Up
(57,000 +9,000) * .2
Branch Current
P118,000
(2,000)
(15,600)
P 100,400
Books of Home
13,200
13,200
Purchases
Freight In
Accounts Payable
35,000
700
35,700
Cash In Transit
Branch, Current
2,000
Accounts Payable
Branch, Current
15,600
Shipments in Transit
Freight In
Home Office, Current
9,000
540
9,540
2,000
15,600
Depreciation Expense
Accumulated Depn
Home Office, Current
Accounts Receivable
312
312
11,400
11,400
Books of Davao
Sales
264,00
0
67,700
Inventory End
52,800
36,000
185,00
0
700
15,840
78,000
68,960
Freight In
Freight Out
Other Operating Expn
Income Summary
Branch Income Summary
Branch, Current
6,340
6,340
10,860
4,520
10,860
4,52
0
Income Summary
73,48
0
Retained Earnings
73,48
0
Income Summary
Inventory Beg
Shipments from Home
220,000
36,53
2
6,340
34,600
66,000
Freight In
Purchases
Freight Out
Other operating Expn
Home Office Equity
Income Summary
3,960
80,000
13,000
65,312
6,340
6,340
Home
Davao
Combined
INCOME STATEMENT:
Sales
264,000
Cost of Sales
Inventory 1/1
36,000
Purchases
185,000
Shipments to/from
(52,800)
Freight In
700
Inventory, 12/31
(67,700)
Cost of Sales
101,200
Gross Profit
162,800
Freight Out
(15,840)
Other Operating Exp
(78,000)
Net Profit fr Operation
68,960
Branch Profit/Loss
_4,520
Net Profit (Loss)
__P73,480
220,000
34,600
80,000
66,000
3,960
(36,532)
148,028
71,972
13,000
(65,312)
(6,340)
_______
(6,340)
484,000
a) 2,100
b) 52,800
68,500
265,000
b) 66,000
4,660
(_99,792)
_238,368
245,632
(28,840)
(143,312)
c) 4,440
_________
P73,480
STATEMENTOF RE:
Jan 1
Add Net Income
Dec 31
P 30,900
73,480
P104,380
BALANCE SHEET:
Assets
Cash
Receivables, net
Inventories
Other Assets, net
DVO Branch, Current
Allow for Mark-up
14,160
20,000
67,700
200,000
94,060
(4.440)
20,000
26,600
36,532
90,088
Total Assets
391,480
173,220
_470,640
87,100
200,000
104,380
79,160
P 166,260
200,000
104,380
391,480
P 30,900
73,480
P104,380
P 34,160
46,600
99,792
290,088
c) 4,440
d)94,060
a) 2,100
b)13,200
94,060
173,220
d)94,060
_P470,640
TEST II
Home Corporations board of directors decided to create a marketing arm that will take care
of promoting and distributing its products in Davao. The following are the trial balance on
Dec. 31, 2015 after the branch, Davao Marketing, has been in operation for two years:
Homer
Davao
Cash
Receivables
Inventories
Other Assets, net
Branch, Current
Shipments from Home
Freight In
Purchases
Freight Out
Other Operating Expenses
Totals
Accounts Payable
Share Capital
Retained Earnings
Home Office, Current
Sales
Shipments to Davao
Allowance for Mark-Up, Jan 1
Totals
P 12,160
20,000
36,000
200,000
118,000
150,000
15,840
78,000
P630,000
P 67,000
200,000
30,900
277,200
52,800
___2,100
P630,000
P 20,000
38,000
34,600
90,400
57,000
3,420
80,000
13,000
65,000
P 401,420
P 79,160
102,260
220,000
________
P401,420
SOLUTION 3AAC
TEST 1
1. C
2. D
3. B
4. A
5. C
6. D
7. False* 8. True 9. D
*false because unsold merchandise of the home office (should be of the branch)
TEST II
10. A
Unadjusted balance
Merchandise in transit including freight
Cash in transit from Branch to HO
HO liability paid by branch
Branch AR collected by HO
Adjusted Balance
Branch Current
P118,000
(2,000)
(15,000)
P 101,000
Adjusting entries:
Sales
Allow for Mark Up
(57,000 +9,000) * .2
Books of Home
13,200
13,200
Purchases
Freight In
Accounts Payable
35,000
700
35,700
Cash In Transit
Branch, Current
2,000
Accounts Payable
Branch, Current
15,000
Shipments in Transit
Freight In
Home Office, Current
9,000
540
9,540
2,000
15,000
Depreciation Expense
Accumulated Depn
Home Office, Current
Accounts Receivable
300
300
10,800
10,800
Books of Davao
Sales
264,00
0
67,700
Inventory End
52,800
36,000
185,00
0
700
15,840
78,000
68,960
Freight In
Freight Out
Other Operating Expn
Income Summary
Branch Income Summary
Branch, Current
6,328
6,328
10,860
4,532
10,860
4,53
2
Income Summary
73,49
2
Retained Earnings
73,49
2
Income Summary
Inventory Beg
Shipments from Home
220,000
36,53
2
6,328
34,600
66,000
Freight In
Purchases
Freight Out
Other operating Expn
Home Office Equity
Income Summary
3,960
80,000
13,000
65,300
6,328
6,328
Home
Davao
264,000
220,000
Combined
INCOME STATEMENT:
Sales
Cost of Sales
Inventory 1/1
Purchases
Shipments to/from
Freight In
Inventory, 12/31
Cost of Sales
Gross Profit
Freight Out
Other Operating Exp
Net Profit fr Operation
Branch Profit/Loss
Net Profit (Loss)
STATEMENTOF RE:
Jan 1
Add Net Income
Dec 31
36,000
185,000
(52,800)
700
(67,700)
101,200
162,800
15,840
78,00
0
68,960
__4,532
_P73,492
___484,000
34,600
80,000
66,000 b) 52,800
3,960
(36,532) c) 4,440
148,028
71,972
13,000
65,30
0
(6,328)
_______
_(6,328)
a) 2,100
68,500
265,000
b) 66,000
4,660
(_99,792)
__238,368
245,632
(28,840)
_(143,300)
73,492
_________
_P73,492_
P 30,900
73,492
P104,392
P 30,900
73,492
P104,392
BALANCE SHEET:
Assets
Cash
Receivables, net
Inventories
Other Assets, net
DVO Branch, Current
Allow for Mark-up
14,160
20,000
67,700
200,000
94,672
(4.440)
20,000
27,200
36,532
90,100
Total Assets
392,092
173,832
_471,252
87,700
200,000
104,392
79,160
P 166,860
200,000
104,392
392,092
c) 4,440
P 34,160
47,200
99,792
290,100
d)94,672
a) 2,100
b)13,200
94,672
173,832
d)94,672
_P471,252