INFOLINK UNIVERSITY COLLEGE

DEPARTMENT OF ACCOUNTING AND FINANCE

TEST 2

NAME ID GROUP

1. Prepared a journal entry for the following transaction show ending balance each General ledger
of the branch and each reciprocal account of the home office under billed merchandise at cost
A. Cash of 1,000 was forwarded to Branch X

B. Merchandise with cost of 60,000 was shipped to Branch X

C. Equipment of 500 acquired by Branch X, to be carried in home office records

D. Credit sales by Branch X amounted to 80,000; the cost of merchandise sold was
45,000.

E. Collections of trade accounts receivable 62,000 made by Branch X.

F. Payments for operating expenses by Branch X totaled 20,000

G. Cash of 37,500 remitted to home office by Branch X

H. Operating expenses charged to Branch X by home office totaled 3,000

 INFOLINK UNIVERSITY COLLEGE

DEPARTMENT OF ACCOUNTING AND FINANCE

TEST 2

NAME ID GROUP

1. Prepared the reconciliation process of reciprocal account of home office and investment at
branch office ledger account .

Assume the home office and the branch accounting records contain the following data and
the balances of the Home Office account and Investment in Branch accounts on Dec 31 are
41,500 Cr. and 49,500 Dr. respectively. Comparison of the two reciprocal accounts discloses
four reconciling items.
1. A debit of 8,000 in Investment in Branch account without a related credit in Home Office
account
2. A credit of 1,000 in the Investment in Branch account without a related debit in the Home
Office account
3. A debit of 3,000 in the Home Office ledger account without a related credit in Investment
in Branch account
4. A credit of 2,000 in the Home Office ledger account without a related debit in the
Investment in Branch account. Accounts receivable of the home office was collected on
Dec 30 and recorded as credit to Home Office.
reconcile the reciprocal ledger account
 prepare journal entry for Br.office on Dec 31,1999,to bring its accounting
records up to date and Head office
2. The home office shipped merchandise costing 6,000 to Branch D and paid freight
costs of 400. Subsequently, the home office instructed Branch D to transfer this
merchandise to Branch E. Branch D paid 300 to carry out this order. The cost of
direct shipment from home office to E would have been 500. The journal entries
in the three sets of records would be: