Beruflich Dokumente
Kultur Dokumente
MATERI LAB 1
HOME OFFICE AND BRANCH OFFICE
Home Office
Outside
Entities
Branch Office 2 Branch Office 1
Examples
- Creation of new branch
Ksatria Muda Company creates a new branch in Jakarta by transferring $20,000 in cash
and an equipment valued at $14,000.
- Merchandise Shipment
Ksatria Muda Company transfers Merchandise to Jakarta Branch at $40,000 its cost.
Jakarta Branch 40,000 Shipment from HO 40,000
Shipment to BO 40,000 Home Office 40,000
- Freight Cost
Ksatria Muda Company paid $500 for $50,000 of merchandise shipped to Jakarta Branch.
Jakarta Branch 50,500 Shipment from HO 50,000
Shipment to BO 50,000 Freight In 500
Cash 500 Home Office 50,500
- Return
Jakarta Branch returned 50% of the merchandise from Ksatria Muda, Jakarta Branch paid
$300 for the shipment.
- Expense Allocation
Jakarta Branch pays $5,000 for advertising expense that relates equally to Branch and
Home Office.
Additional Information
Ending Inventory from HO (After Mark Up of 25%) = 3,000 (125% from cost)
Ending Inventory from HO (Cost Basis) = 2,400 (100% cost)
Loading in Branch for 3,000 Ending Inventory = 600
Realize Loading Inventory = 9,400 (10,000 – 600)
(i)