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ADVANCED
ADVANCED ACCOUNTING
ACCOUNTING
1. Leila Co's Clark branch submitted the following data for 2011, its first year of operation:
Sales. P203, 500 Cr
Shipments from home office. 186, 120 Dr
Operating expenses.
expenses. 18, 755 Dr
Home office current. 48, 125 Cr
Shipments to the branch are billed at cost. The December
December 31 inventory of the branch was
P25, 245. What is the correct balance on December 31, 2011 of the Branch Account current as
per home office books?
a. P46, 750. c. P65, 505
b. 48, 125. d. 71, 995
3. Barros Corporation's shipments to and from its Brazil city branch are billed at 120% of cost.
On December 31, Brazil branch reported the following data, at billed prices; inventory,
inventory, January 1,
of P33, 600; shipments received from home office
office of P840, 000; shipments returned of
P48, 000; and inventory,
inventory, December 31, of P36, 000. What is the balance of the allowance for
over valuation of branch inventory
inventory on December 31 before adjustments?
a. P5, 600. c. P6, 000
b. 137, 600. d. 145, 600
6. The Gift co. has a branch in Dipolog City. During 2011, the home office shipped to the branch
merchandise billed at P150, 000 including a mark-up of 20% on cost. The branch reports
opening and closing inventories
inventories of P90, 000 and P120,
P120 , 000, respectively,
respectively, while the home office
offi ce
has a closing inventories of P210, 000 which includes merchandise which are held on
consignment valued at P10, 000. Both location use the periodic inventory system. What closing
inventory would be reported in the combined statement
statement of income for the year 2011?
a. P296, 000. c. P320, 000
b. 300, 000. d. 330, 000
7. The Manila branch of the Great co. is billed for merchandise by the home office at 20% a bove
cost. The branch in turn prices merchandise for sales purposes at 25% above billed price. On
February 16, all of the branch merchandise is destroyed
destroyed by fire. No insurance was maintained.
Branch accounts show the following information:
Merchandise inventory,
inventory, January 1 (at billed price). P 26, 400
Shipments from home office (Jan. 1 - Feb.
Feb. 16). 20, 000
Sales. 15, 000
Sales returns. 2, 000
Sales allowances.
allowances. 1,000
What was the cost of the merchandise
merchandise destroyed by
by fire?
a. P36, 000. C. P36, 800
b. 30, 667. d. 30, 000
8. Trial balances for the home office and the branch of the Tony
Tony co. show the following accounts
accounts
before adjustment, on December
December 31, 2011. The home office policy of billing the branch for
merchandise is 20% above cost.
Home office Branch
Unrealized intercompany inventory profit P10, 800
Shipments to branch 24, 000
Purchase (outsiders) P7, 500
Shipments from home office 28, 800
Merchandise inventory,
inventory, Dec. 1, 2011 45, 000
What part of the branch inventory
inventory as of Dec. 1, 2011 represent purchases
purchases from outsiders
outsiders and
what part represents goods acquired from the home office?
Outsiders Home office
a. P12, 000. P33, 000
b. 16, 500. 28, 500
c. 15, 000. 30, 000
d. 9, 000. 36, 000
9. Swift corporation, operates a number of branches in Metro Manila. On June
June 30, 2011, it's San
Lorenzo branch showed
showed a home office account balance of P27, 350 and the
t he home office books
showed a San Lorenzo
Lorenzo branch account balance of P25, 550. The following information may help
in reconciling both accounts:
1. A P12, 000 shipment, charged by Home office to San Lorenzo branch, was actually sent to and
retained by Sto. Tomas branch.
2. A P15, 000 shipment, intended and charged to San Jose branch was shipped to San Lorenzo
branch and retained by the latter.
3. A P2, 000 emergency cash transfer from Sto. Tomas
Tomas branch was not taken up in the Home
office books.
4. Home office collects a San Lorenzo branch
branch accounts receivable of P3, 600 and fails to notify
the branch.
5. Home office was charged for P1, 200 for merchandise returned by San Lorenzo branch on
June 28 the merchandise
merchandise is in transit.
transit.
Home office erroneously recorded San Lorenzo's net income for May,
May, 2011 at P16, 275. The
branch reported a net income
income of P12, 675.
What is the reconciled amount
amount of the home office and San Lorenzo branch reciprocal accounts?
a. P21, 750
b. 23, 750
c. 27, 350
d. 20, 150
On January
January 5, 2012, the Davao branch transfer
transfer half of the original shipment to the Baguio
branch, and e Davao branch pays P500 as the shipment.
12. Using the same information in No.11 at what amounts should the 60% of the merchandise
remaining unsold at December 31, 2011 be included in (1) the inventory of the Davao branch at
December 31, 2011, and (2) the published balance sheet of Kathy Office Supply Company at
December 31, 2011 shows inventory of:
14. Using the same information in Nos. 11,12,13. What is the entry on the books of Davao
branch in respect to January 5, 2012 transfer:
a. Home office 15, 500
Inventory 15, 500
b. Home office. 15, 100
Shipments inventory 15, 000
Cash (for freight charges). 100
c. Home office 15, 500
Cash (for freight charges). 500
Inventory 15, 000
d. Home office. 15, 600
Cash (for freight charges). 500
Freight-in. 600
Inventory.
Inventory. 14, 500
15. Using the same information in Nos. 11-13, what is the entry on the home office books in
respect to January 5, 2012 transfer:
a. Home office. 15, 500.
Cash. 500
Inventory.
Inventory. 15, 000
b. Shipments. 14, 500
Freight-in. 600
Home office current 15, 100
c. Branch current- Baguio.
Baguio. 15, 100
Excess freight. 400
Branch current -Davao.
-Davao. 15, 500
d. Branch current-Baguio. 15, 100
Excess freight. 600
Branch current-Davao.
current-Davao. 15, 700