Professional Documents
Culture Documents
Chapter 12
Chapter 12
12-2:
c.
Sales
Cost of goods sold:
Purchases
Merchandise inventory, end
Gross profit
Expenses
Net income (loss)
12-3:
P800,000
180,000
620,000
P 80,000
198,000
P (118,000)
b
Sales
Cost of goods sold (P70,000 / 140%)
Gross profit
Less: Samples (P8,000 P6,000)
Expenses
Net income
12-4:
P 700,000
P 70,000
50,000
P 20,000
P 2,000
2,800
4,800
P 15,200
a
Sales
Cost of goods sold
Gross profit
Expenses (P9,000 + P4,500)
Net income
12-5:
12-6:
12-7:
12.8
a
Shipment of merchandise to home office
Equipment sent to home office
Expenses assigned to branch by the home office
Cash remittance to home office
Home office account balance
P 100,000
72,000
P 28,000
13,500
P 14,500
P 80,000
50,000
8,000
(40,000)
P 98,000
12-9: d
12-10: a
Home Office account balance before closing, Dec. 32, 1008
P 35,000
Net income (loss)
Sales
P147,000
Cost of cost goods sold
Shipment to branch
P135,000
Inventory, 12/31
18,500 116,500
Gross profit
P 30,500
Expenses
13,500
17,000
Home Office account balance (Investment in Branch account balance) P 52,000
Shipment to Branch account has no beginning balance, because this was closed at the end
of 2011.
12-11: b
Petty cash fund
Accounts receivable
Inventory
Home Office account balance
Jan. 1, 2011
P 6,000
86,000
74,000
P166,000
Jan. 1, 2012
P 6,000
98,000
82,000
P186,000
12-12: d
(Branch Books)
Home Office
P 21,320
7,280
( 400)
P 28,200
12-13: a
Unadjusted balance Investment in Branch account, 12/31
Charge for advances by president
Erroneous entry for merchandise allowance
Share in advertising expense
Unadjusted balance Home Office account, 12/31
P430,000
(5,500)
( 600)
(9,000)
P414,900
12-14: a
Unadjusted balances, 12/31
Shipment in transit
Collection of HO A/R by branch
Error in recording of branch profit
Returns of merchandise in transit
Adjusted balances, 12/31
(Branch Books)
(Home Office Books)
Home Office Investment in Branch
P 97,350
P 84,000
6,150
25,000
900
( 6,400)
P103,500
P103,500
12-15: a
(Branch Books)
Home Office
P27,350
Unadjusted balances
Error in recording shipment to Cavity branch
Error in recording shipment to Tagaytay branch
Branch AR collected by home office
(3,600)
Merchandise returns in transit
Error in recording branch profit
Adjusted balances
P23,750
12-16: c
Unadjusted balance- Investment in Branch account
Remittance in transit
Shipment in transit
Expenses allocated
Error in recording remittance
Error in recording shipments
Unadjusted balance Home Office account
Unadjusted balances,
Remittance in transit
Shipment in transit
Expenses allocated
Unrecorded HO collection of AR
Error in recording shipments
Adjusted balances
12.17
P 85,000
(10,000)
(20,000)
( 5,000)
3,000
( 9,000)
P 44,000
( Branch Books)
Home Office
P 44,000
(HomeOffice Books)
Investment in Branch
P 85,000
(10,000)
20,000
5,000
(3,000)
9,000
P 75,000
P 75,000
(Branch Books)
Home Office
Branch
Unadjusted balances
Branch AR collected by Home Office
Shipments in transit
Acquisition of furniture
Merchandise returns
Cash remittance in transit
Adjusted balances
P 440,000
( 8,000)
32,000
P 464,000
P 496,000
(12,000)
(15,000)
( 5,000)
P 464,000
PROBLEMS
Problem 12-1
Home Office Books
1. Investment in branch
Cash
30,000
2. Investment in branch
Shipment to branch
75,000
Branch Books
Cash
30,000
75,000
3. No entry
4. No entry
5. Shipment to branch
Investment in branch
30,000
Home office
30,000
75,000
Purchases
Accounts payable
10,000
75,000
10,000
Accounts receivable
Sales
2,000
2,000
6. No entry
125,000
125,000
Home office
2,000
Shipment from home office
Cash
105,000
Accounts receivable
7. No entry
2,000
105,000
Accounts payable
7,000
Cash
7,000
8. No entry
Salaries
Rent
Utilities
Other operating expenses
10,000
5,000
2,000
12,000
Cash
29,500
9. Investment in branch
Accumulated depn
10. Cash
Investment in branch
7,500
7,500
65,000
Depreciation
Rent
Insurance
Home office
1,500
5,000
1,000
7,500
Home office
65,000
65,000
Cash
65,000
11. Cash
3,000
Investment in branch
3,000
10,000
10,000
Home office
Accounts receivable
Sales
Inventory, end
3,000
125,000
5,000
Shipment from
3,000
HO
73,000
Purchases
10,000
Salaries
10,000
Rent
Utilities
10,000
2,000
Other operating expenses
12,500
Home office
10,000
Problem 12-2
a.
2.
3.
Cash
Merchandise inventory
Home office
200,000
350,000
Merchandise inventory
Accounts payable
400,000
Accounts receivable
Sales
650,000
425,000
Cash
600,000
550,000
400,000
650,000
425,000
Accounts receivable
4.
5.
b.
Advertising expense
Sales commission
Other expense
Cash
Accounts payable
Home office
Cash
40,000
65,000
45,000
150,000
370,000
120,000
490,000
c.
600,000
P650,000
425,000
225,000
P40,000
65,000
45,000
150,000
P 75,000
P160,000
50,000
325,000
P535,000
Accounts payable
Home office
30,000
505,000
P535,000
Problem 12-3
Home Office Books
Branch Books
(1) Adjusting Entries
a. Investment in branch
Cash
63,750
b. Investment in branch
Shipment to branch
75,300
c. Accounts receivable
Sales
157,500
d. Purchases
Accounts payable
183,750
e. Cash
170,400
Cash
Home office
Shipment from HO
Home office
75,300
73,300
Accounts receivable
Sales
99,000
157,500
183,750
Purchases
33,750
Accounts payable
33,750
Cash
Accounts receivable
f. Accounts payable
Cash
g. Expenses
Cash
Furniture & fixtures branch
Investment in branch
h. Cash
63,750
63,750
170,400
186,000
186,000
39,900
75,300
99,000
80,100
Accounts receivable
Home office
Cash
80,100
Accounts payable
Cash
18,375
80,100
80,100
18,375
39,900
12,000
12,000
80,100
Investment in branch
Home office
Cash
12,000
12,000
80,100
Expenses
Cash
i. Retained earnings
Cash
63,750
27,000
27,000
15,000
15.000
1,750
1,750
975
975
Expenses
Home office
975
975
l. Prepaid expenses
Expenses
375
m. Expenses
Accrued expenses
150
375
Prepaid expenses
Expenses
1,125
150
Expenses
Accrued expenses
1,125
450
450
Closing Entries
Home Office Books
n. Sales
Shipments to branch
Merchandise inv., 12/31
Merchandise inv. 1/1
Purchases
Expenses
Income summary
157,500
75,300
72,750
o. Branch loss
Investment in branch
2,100
p. Income summary
Branch loss
2,100
q. Income summary
Retained earnings
3.
Branch Books
60,180
183,750
41,445
20,175
2,100
Sales
99,000
Merchandise inv., 12/31 35,250
Income summary
2,100
Purchases
33,750
Shipment from HO
75,300
Expenses
27,300
Home office
2,100
Income summary
2,100
2,100
18,075
18,075
P157,500
P 60,180
183,750
P243,930
( 75,300)
P168,630
( 72,750)
95,880
P 61,620
41,445
P 20,175
( 2,100)
P 18,075
P 99,000
P 33,750
75,300
P109,050
35,250
73,800
P 25,200
27,300
P( 2,100)
P 34,800
28,575
72,750
3,075
P30,000
8,370
21,630
P12,000
975
11,025
45,825
P217,680
P 2,025
31,950
P 33,975
P 75,000
108,705
183,705
P217,680
P 6,375
18,000
35,250
1,125
P61,650
P 450
15,375
P61,650
P256,500
P 60,180
217,500
P277,680
108,000
169,680
P 86,820
68,745
P 18,075
Cebu Company
Statement of Financial Position
December 31, 2011
Assets
Cash
Accounts receivable
Merchandise inventory
Prepaid expenses
Furniture and fixtures
Less: accumulated depreciation
Total assets
Liabilities and Stockholders Equity
Accrued expenses
Accounts payable
Capital stock
Retained earnings
Total liabilities and stockholders equity
P 41,175
47,475
108,000
4,200
P42,000
9,345
32,655
P233,505
P 2,475
47,325
75,000
108,705
P233,505
Problem 12-4
Branch Books
22,000
Investment in branch
45,000
540,000
90,000
120,000
22,000
Home office
22,000
Branch income
22,000
Branch income
22,000
Income summary
22,000
Income summary
142,000
Retained earnings
142,000
CG Corporation
Combined Statement Working Paper
Year Ended December 31, 2011
Eliminations
Home
Office
Debits
Cash
Accounts receivable
Inventory, 1/1
Investment in branch
Equipment (net)
Purchases
Shipments from HO
Expenses
Total debits
36,000
54,000
45,000
70,000
95,000
540,000
90,000
930,000
Branch
Debit
Credit
7,000
29,000
18,000
Income
Statement
Dr (Cr)
43,000
83,000
63,000
(2) 70,000
95,000
540,000
145,000
20,000
219,000
(1)145,000
110,000
150,000
371,000
Credits
Accounts payable
Home Office
Capital stock
Retained earnings, 1/1
Sales
Shipments to branch
Total credits
54,000
144,000
560,000
145,000
930,000
145,000
90,000
60,000
27,000
4,000
70,000
31,000
(2) 70,000
54,000
144,000
(705,000)
(1)145,000
219,000
(150,000)
215,000
Net income
Total liabilities & equity
1.
2.
Balance
Sheet
215,000
142,000
142,000
371,000
10
Problem 12-5
(1)
Oro Company
Working Paper for Combined Statements
Year Ended December 31, 2011
Home
Office
Branch
Debits
Cash
Notes receivable
Accounts receivable (net)
Inventories
Furniture & fixtures (net)
Investment in Branch
Cost of goods sold
Operating expenses
63,000
10,500
120,600
143,700
72,150
124,050
300,750
104,250
128,700
32,850
Totals
939,000
275,700
Credits
Accounts payable
Common stock
Retained earnings
Home Office
Sales
Totals
Eliminations
Debit
Credit
Income
Statements
Dr (CR)
21,900
55,950
36,300
84,900
10,500
176,550
45,000
72,150
(2)135,000
(1)124,050
(2)135,000
564,050
137,100
389,100
61,500
300,000
37,500
61,500
300,000
37,500
124,050
151,650
540,000
939,000
Balance
Sheet
275,700
(1)124,050
(691,650)
289,050
289,050
Net Income
9,900
(9,900)
389,100
Closing Entries
2.
Branch Books
Sales
Income Summary
Cost of goods sold
Operating expenses
Home Office
Branch loss
9,900
11
Income summary
9,900
Investment in Branch
Income summary
Branch loss
9,900
9,900
9,900
Problem 12-6
a.
b.
P138,200
( 45,000)
( 15,000)
6,000
P 84,200
P(93,000)
( 200)
12,000
( 3,000)
P(84,200)
Adjusting Entries
Home Office Books
Branch Books
Other income
Investment in branch
Rizal
45,000
Cash
15,000
200
200
45,000
Investment in branchRizal
Investment in branch
Accumulated depn
Salary expense
Home office
Home office
12,000
Shipments from HO
12,000
Depreciation expense
Home office
3,000
15,000
6,000
6,000
3,000
Problem 12-7
a.
P166,400
(30,000)
(12,000)
P124,400
P103,200
7,200
24,000
8,000
( 18,000)
P124,400
12
b.
Adjusting Entries
Home Office Books
Cash
30,000
Shipment to branch
12,000
Investment in branch
42,000
Branch Books
Shipment from HO
24,000
Supplies
8,000
Expenses
7,200
Accounts receivable
18,000
Home office
21,200
Problem 12-8
(1)
Reconciliation Statement
(Home Office Books) (Branch Books)
Investment in Branch
Home Office
Unadjusted balances, 1/31
Advertising charged to branch
Home office AR collected by branch
Shipment in transit
Error in recording receipt of merchandise
Understatement of depreciation
Remittance in transit, 1/31
(2)
P59,720
P 43,268
480
600
( 180)
( 432)
(12,800)
P47,088
P 47,088
Adjusting Entries
Home Office Books
Retained earnings
Cash
Accounts receivable
Investment in branch
Branch Books
432
12,800
Advertising
480
Shipments from HO
3,520
600
Shipment from HO
12,632
Home office
180
3,820
Problem 12-9
(1)
Branch Books
Adjusting Entries
Shipment from home office
Operating expenses (P4,200 + P3,900)
Home office
57,600
8,100
65,700
Closing Entries
Sales
Inventory, 12/31 (P64,580 + P57,600)
Inventory, 1/1
Shipment from HO (P623,200 + P57,600)
Operating expenses
Income summary
778,200
122,180
Income summary
Home office
116,990
47,800
680,800
54,790
116,990
116,900
13
(2)
(3)
470
330
800
116,990
116,900
Reconciliation Statement
Unadjusted balances, 12/31
Error in recording remittance to branch
Shipment in transit
Expenses charged to branch
Branch net income
Freight erroneously charged to branch
Cash remittance in transit to HO
Adjusted balances, 12/31
Problem 12-10
a.
Branch Books:
Home Office account balance, January 1, 2011
Remittance to the home office
Shipments received from the home office (P440,000 P39,000)
Credit memo from the home office
Merchandise returned to the home office
Home Office account balance, December 31, 2011
b.
P 134,000
(189,000)
401,000
12,000
( 10,400)
P
347,600
Reconciliation Statement
Home Office Books
(Investment in Branch)
P 397,100
( 42,000)
12,000
Branch Books
(Home Office )
P 347,600
39,000
17,000
(24,500)
(12,000)
14
P 367,100
P 367,100
Problem 12-1111
a.
P 2,000
Sales (P 27,000 + P 33,000 + P 26,000) .
Cost of Goods Sold (P 36,000 + P 18,000) .
Gross Profit
Rent Expense ..
Property Tax Expense
Depreciation Expense
Miscellaneous Expense .
General Corporate Expense
Net Income
b.
P 86,000
(54,000)
P 32,000
P 4,000
5,000
4,000
11,000
6,000
P 180,000
Initial Transfers .
June Inventory Shipment ..
Property Tax Payment ..
September Inventory Shipment
Expense Allocation ..
Cash Transfer ...
Balance in Home Office/Branch Accounts (correct) ..
c.
(30,000)
P 2,000
4/1
Rent Expense
Cash .
Cash ..
Sales
P 188,000
18,000
5,000
26,000
6,000
(63,000)
P 180,000
30,000
36,000
122,000
188,000
4,000
4,000
27,000
27,000
18,000
Cash .
Sales ...
33,000
18,000
33,000
15
18,000
18,000
Miscellaneous Expenses .
Cash ...
7,000
Inventory .
Home office ...
18,000
7,000
18,000
7/6
9/9
10/1
11/1
12/22
12/31
12/3
d.
5,000
Inventory
Home Office .
26,000
5,000
26,000
Cash
Sales .
26,000
18,000
4,000
Home Office
Cash .
63,000
Depreciation Expense .
Accumulated depreciation ..
4,000
6,000
26,000
18,000
4,000
63,000
4,000
6,000
TARLAC BRANCH
Statement of Financial Position
December 31, 2011
Assets
Cash .
Inventory .
Equipment ...
Accumulated Depreciation .
Total Assets
Equity
Home Office* ..
P 38,000
26,000
P 122,000
(4,000)
118,000
P 182,000
P 182,000
*Home office balance is P 180,000 as computed in Part b plus the P 2,000 net
income for the period.
16