Problem 1

Debit Credit
Cash 11,900.00
Home Office 100,000.00
Shipments from Home Office 130,000.00
Accounts receivable 62,500.00
Expenses 8,100.00
Sales 112,500.00
212,500.00 212,500.00

Ending inventory 30,000.00

Solution

Sales 112,500.00
COGS - 100,000.00 SFHO 130,000.00
GP 12,500.00 Less: EI - 30,000.00
Expenses - 8,100.00 COGS 100,000.00
Profit 4,400.00 (1)

Investment in branch 100,000.00

Add: Profit of branch 4,400.00
Investment in branch 104,400.00 (2)
Problem 2

Sales 203,500.00 Cr.

Shipments from home office 186,120.00 Dr.
Operating expenses 15,000.00 Dr.
Home office 48,125.00 Cr.

Ending inventory 25,245.00

Solution

Sales 203,500.00 SFHO 186,120.00

COGS - 160,875.00 Less: EI - 25,245.00
GP 42,625.00 COGS 160,875.00
Expenses - 15,000.00
Profit 27,625.00

Investment in branch 48,125.00

Add: Profit of branch 27,625.00
Investment in branch 75,750.00 (1)
Problem 3 Solution

shipments of merchandise: 125% of cost SFHO

March 5 130,000.00 at billed price SFHO
March 10 60,000.00 at billed price SFHO
March 20 45,000.00 at billed price Total SFHO
Defective merchandise
returned of merchandise: EI
March 25 5,050.00 GOODS SOLD

branch net loss: COGS

March 31 6,200.00

ending inven 85,000.00

 130,000.00
60,000.00
45,000.00
235,000.00
- 5,050.00
- 85,000.00
144,950.00 at billed price

115,960.00 at cost
Problem 4 Solution

Debit Credit
Cash 28,600.00 Sales
Accounts receivable 173,800.00 COGS
Shipments from home office 462,000.00 SFHO
Home office 324,500.00 EI
Sales 369,600.00 GP
Expenses 29,700.00 OPEX
net income

Ending inventory 138,600.00

mark up 40% on cost
 369,600.00
140%
330,000.00 SFHO 462,000.00
- 99,000.00 231,000.00 EI 138,600.00
138,600.00
29,700.00
108,900.00
 100% 40%
330,000.00
99,000.00
Problem 5 Solution

Petty cash 94,500.00 ACCOUNTS RECE

Accounts receivable, beg 86,000.00 beg 86,000.00
Inventory, beg 75,500.00 sales 272,700.00
Accounts receivable, end 88,800.00
Inventory, end 81,000.00
Sales 272,700.00 358,700.00
Sales returns 5,000.00
Accounts receivable written of 2,000.00
Shipments from home office 220,600.00
Expenses (paid by home office) 22,500.00
ACCOUNTS RECEIVABLE
5,000.00 sales returns
2,000.00 ar written of
88,800.00 end
262,900.00 squeeze
358,700.00
Problem 6

SFHO 120,000.00 at billed price, 20% above cost

inventory: branch
January 1, 2016 100,000.00
December 31, 2016 118,000.00

inventory: home office

December 31, 2016 160,500.00 inclusive of goods held
on consignment = 10, 500
Solution

Ending inventory
billed price cost
branch 118,000.00 98,333.33
home office 160,500.00
less: held on consignment - 10,500.00
248,333.33
 Debit Credit
Cash 11,900.00
Home Office 100,000.00
Shipments from Home Office 130,000.00
Accounts receivable 62,500.00
Expenses 8,100.00
Sales 112,500.00
212,500.00 212,500.00

March 5 130,000.00 at billed price

March 10 60,000.00 at billed price
March 20 45,000.00 at billed price

Petty cash 94,500.00

Accounts receivable, beg 86,000.00
Inventory, beg 75,500.00
Accounts receivable, end 88,800.00
Inventory, end 81,000.00
Sales 272,700.00
Sales returns 5,000.00
Accounts receivable written of 2,000.00
Shipments from home office 220,600.00
Expenses (paid by home office) 22,500.00

AR, beg 86,000.00

Sales 272,700.00
Total AR 358,700.00
Sales returns 5,000.00
AR,end 88,800.00
AR write of 2,000.00
95,800.00
262,900.00
Sales 203,500.00 Cr. Sales
Shipments from home office 186,120.00 Dr. CGS
Operating expenses 15,000.00 Dr. SFHO
Home office 48,125.00 Cr. EI
GP
OPEX
Sales 112,500.00 Net income
COGS 100,000.00 HO
SHFO 130,000.00 IIB
Less: EI 30,000.00
GP 12,500.00
Expenses 8,100.00 Sales
Profit 4,400.00 COGS
SFHO
104,400.00 EI
GP
SFHO 130,000.00 OPEX
SFHO 60,000.00 net income
SFHO 45,000.00
235,000.00
Defective merchandise - 5,050.00
EI - 85,000.00
GOODS SOLD 144,950.00
COGS 115,960.00

EI markup 118,000.00
EI cost 98,333.33
Home Office w. cons 160,500.00
Consigned goods 10,500.00
248,333.33
 203,500.00

186,120.00
25,245.00 160,875.00
42,625.00
15,000.00
27,625.00
48,125.00
75,750.00

369,600.00 138,600.00 1.4

99,000.00
330,000.00 39,600.00
99,000.00 231,000.00
138,600.00 462,000.00
29,700.00 330,000.00
108,900.00 132,000.00
 Debit Credit
Cash 28,600.00
Accounts receivable 173,800.00
Shipments from home office 462,000.00
Home office 324,500.00
Sales 369,600.00
Expenses 29,700.00
694,100.00 694,100.00