Beruflich Dokumente
Kultur Dokumente
AND BRANCHES
Suggested Solutions
DE LEON/ DE LEON/ DE LEON
STRAIGHT PROBLEMS
Problem 1. Branch was billed at cost by Home Office
1.1 JEs: HOME OFFICE BOOKS BRANCH OFFICE BOOKS
Branch 12,800
BIS (RBNI) 12,800
1.2 Closing Entries
Sales 76,800
MI, end 21,120
Sh from HO 38,400
Purchases 27,520
SE 9,600
GAE 7,680
Insurance exp 1,280
Depreciation exp 640
Income Summary 12,800
Transfers Transfers
above Cost @ cost Mark-up
BI: from OV 64,000 64,000 -
HO 25,600 20,480 5,120
Add: Purchases from OV 153,600 153,600 -
Shipments from HO 134,400 107,520 26,880
Total goods available 377,600 345,600 32,000
EI: from OV (25,600) (25,600) -
HO (57,600) (46,080) (11,520)
COGS 294,400 273,920 20,480
STRAIGHT PROBLEMS
3.3 Working Paper Elimination Entries (WPEE)
WPEE #1 WPEE #3
3.4 Adjusting Entries to take-up HO share in net income of Branch (Equity Method)
STRAIGHT PROBLEMS
3.5 Closing Entries in Individual Books of Home Office and Branch Office
BRANCH OFFICE BOOKS
Sales 409,600
MI, end 83,200
IS (RBNI) 51,200
MI, beg 89,600
Purchases 153,600
Sh from HO 134,400
OE 64,000
IS (RBNI) 51,200
Home Office 51,200
STRAIGHT PROBLEMS
3.3 Working Paper Elimination Entries (WPEE)
WPEE #1 WPEE #3
IS (CNI) 102,400
Retained Earnings 102,400
STRAIGHT PROBLEMS
3.6 Income Statements for HO, Branch, and Combined
HO BO
HO BO 1,638,400
Sales 1,228,800 409,600
MI, beg 294,400 89,600
Purchases 1,024,000 153,600 378,880
Shipments ( 107,520) 134,400 1,177,600
MI, end ( 230,400) (83,200) -
Cost of sales 980,480 294,400 (302,080)
Gross Profit 248,320 115,200 1,254,400
OE (217,600) ( 64,000) 384,000
Net Income 30,720 51,200 (281,600)
102,400
BO
STRAIGHT PROBLEMS
12,800
3.7 Balance Sheets for HO, Branch, and Combined
HO 64,000 HO BO
Cash 76,800 83,200 89,600
A/R 102,400 166,400
MI, end 230,400 115,200 302,080
Fixed Asset 1,113,600 1,228,800
Branch 217,600
DP ( 11,520) 206,080 - -
Totals 1,729,280 275,200 1,786,880
217,600
275,200
STRAIGHT PROBLEMSV
Problem 4. Reconciliation of reciprocal balances.
Transactions Adjustments
(a) TD (254,000) (284,400) (a) (30,400)
(b) TD 752,000 681,600 (b) 70,400
© TD 24,000 © 24,000
(d) TD (46,080) (d) (46,080)
(e) Error (16,000) (e) 16,000
(f) Error 16,000 (f) (16,000)
(g) NRI (20,000) ( 20,000) (g) -
6.1
6.2
Overstatement of branch cost of sales:
AFOVOBI ( before adjustment for realized allowance) P 99,000
Less required allowance on BEI from HO (114,000/125%)x25% 22,800
HONI 555,000
RBNI 81,000
Realized Allowance 76,200
Combined NI 712,200
STRAIGHT PROBLEMS
Branch
Sales 1,080,000
COGS: BI 63,000
Purch 450,000
Shpmnt 360,000
EI (115,200) (757,800)
Gross Profit 322,200
OPEX (165,000)
TBNI 157,200
HONI 555,000
TBNI 157,200
Combined NI 712,200
STRAIGHT PROBLEMS
6.3
Problem
Books of8,Home
Inter-branch
Office transfer of merchandise.
Balgan Br 16,000 Books of Balgan Br Books of Flores Branch
Sh fr HO 16,000
Sh to balgan Br 16,000 F-in 500
Cash 500
HO 16,000
Sh to Blgan Br 16,000
Sh to Flres Br 16,000
Suggested Solutions: Multiple Choice Items
Branch EI @ cost:
Total BV P 40,000
Less Branch EI from OV 5,280 x 100% = P 5,280
Branch EI from HO P 34,720 / 140% = 24,800
Amount P 30,080
True Branch NI
RBNI (P4,000 - P2,000) P 2,000
Plus Realized allowance:
[(224,000 - 34,720) / 140%] x 40% 54,080
TBNI P56,080
Suggested Solutions: Multiple Choice Items
3. A
BP Cost Mark-up
MI, beg (HO) 12,000 2,400
4. A
HO: Branch
Sales 480,000 Sales 168,000
COGS: BI 96,000 COGS: BI 48,000
Purch 400,000 Shpmnt 124,800
Shpmnt (104,000) EI (38,400)
EI ( 78,400) (313,600) 134,400
Gross Profit 166,400 Divide by 120% (112,000)
OPEX (57,600) Gross Profit 56,000
HONI 108,800 OPEX (28,800)
TBNI 27,200
HONI 108,800
TBNI 27,200
Combined NI 136,000
Suggested Solutions: Multiple Choice Items
5. D
Sales P124,000
Less Cost of Sales
Inventory, beg P 18,400
Purchases 152,000
Shipment to Branch ( 80,000)
Inventory, end ( 24,000) 66,400
Gross Profit P 57,600
Sundry expenses 40,000
Net income P 17,600
Suggested Solutions: Multiple Choice Items
6. D
Sales P 112,000
Less Cost of sales
Inventory, beginning P 8,440
Shipment from HO (P80,000 + 4,400 + 200) 84,600
Inventory, end (P11,200 + 416 + 200) (11,816) 81,224
Gross profit P 30,776
Sundry expenses 20,000
Net income P 10,776
AFOVBI 8,800:
Shipments 80,000* 10%= 8000
Beg Inv 800
7. D
Sales (424,000 + 126,000) P550,000
Less Cost of Sales
MI, beg (46,000+ 14,240) P 60,240
Purchases 328,000
MI, end (57,000 + 19,500) ( 76,500) 311,740
Gross profit P238,260
Less Operating expenses (152,800 + 40,600) 193,400
CNI P 44,860
Suggested Solutions: Multiple Choice Items
8. D
RBNI P 12,000
Plus Realized allowance 14,400
TBNI P 26,400
Sales 160,000
COS 72,000
Gross Profit 88,000
OPEX 76,000
Net Income 12,000
9. B
HO Books Branch Books
Branch A/C HO Account
UBs 20,440 21,880
Adjustments (1) (9,600)
(2) 12,000
(3) - -
(4) (2,880)
(5) ( 960)
(6) (2,880)
ABs 19,000 19,000
Suggested Solutions: Multiple Choice Items
10. B
Branch
Sales 234,000
COGS:
Purch 36,000
Shpmnt 120,000
EI (42,000) (114,000)
Gross Profit 120,000
OPEX (57,600)
TBNI 62,400
Cash for the working fund to be operated under Imprest system P100,000
Merchandise Samples 240,000
During the month, the sales agency submits sales on account of P1,500,000 which was duly
approved by the home office. Cost of merchandise shipped to fill the orders from customers
obtained by the sales agency is P800,000. Home office disbursements chargeable to the
agency are as follows: Furniture and fixtures, P150,000; manager’s and salesmen’s
salaries, P88,000;and rent, P35,000. On May 31, the sales agency working fund is
replenished: paid vouchers submitted by the sales agency amounted to P42,000. Sales
agency samples are useful until December 31, 2016, which at that time, are believed to
have a salvage value of 15% of cost. Furniture are depreciated at 30% per annum.
1.What is the net profit of the SILAY CITY AGENCY for the month of May, 2016?
a. P327,250 c. P463,750
b. P315,250 d. P505,750
Sales 1,500,000
Less: Cost 800,000
GP 700,000
Less: Salaries and Wages 88,000
Rent Expense 35,000
Misc Expense 42,000
Supplies Expense(P240,000 x 85%) /8 25,500
Dep. Expense (P150,000 x 30%)/12 3,750 194,250
Net Profit 505,750