1. On December 31, the unadjusted balance of Investment in Baclaran Branch Account is P165,920 in the Home Office’s Book.

’s Book. The following

data were found in your examination of the books of the Home Office and its Baclaran Branch:

a. Transfer of fixed assets from Home Office amounting to P53,960 was not booked by Baclaran Branch.
b. P10,000 covering marketing expense of Bataan Branch was charged by Home Office to Baclaran Branch.
c. Baclaran Branch recorded a debit note on inventory transfers from Home Office of P75,000 twice.
d. Home Office recorded cash transfer of P65,700 from Baclaran Branch as coming from Davao Branch.
e. Baclaran Branch reversed a previous debit memo from Bohol Branch amounting to P10,500. Home Office decided that this charge is
appropriately Davao’s Branch.
f. Baclaran Branch recorded a debit memo from Home Office of P4,650 as P4,560.
 
What is the unadjusted balance of Home Office Current Account in Baclaran Branch’s books on December 31? 5pts
 

2. After examining on a comparative basis the inter-office account of the Bulacan Company with its suburban
branch and the similar account carried on the latter's books, the following discrepancies at the close of the
business on June 30, 2021 were seen:

a. A charge for labor by the Home Office, P500 was recorded twice by the branch.

b. A charge of P895 was made by the Home Office for freight on merchandise, but the amount was recorded by
the Branch as P89.50.

c. A charge of P980 (furniture and fixture) on the Home Office books was taken up by the Branch as P890.

d. A credit by the Home Office for P350 (merchandise allowances) was taken up by the Branch as P400.

e. The Home Office charged the Branch P425 for interest on open account which the Branch failed to take up in
full; instead, the Branch sent to the Home Office a wrong adjusting memo, reducing the charge by P100 and
set up a liability for the net amount.
f. The Home Office received P5,000 from the sale of a truck which is erroneously credited to the Branch; the
Branch did not charge the Home Office therewith.

g. The Branch by mistake sent the Home Office a debit note for P370 representing its proportion of a bill for
repairs of truck; the Home Office did not record it.

h. The Branch inadvertently received a copy of the Home Office entry dated July 19, 2021 correcting item (f)
and entered a credit in favor of the Home Office as of June 30, 2021.

At June 30, 2011, the unadjusted balance of the Investment in Branch account on the Home Office books
showed P175,520. At the beginning of the year, the inter-office accounts were in balance.

What is the unadjusted balance of the Home Office account on the branch books on June 30, 2021? 5pts

3. Cebu branch submitted the following data to its home office in Manila for 2021, its first year of operation:

Sales     2,300,000.00

Shipments from home office     1,850,000.00

Operating expenses        235,000.00

Home Office        480,000.00

Shipments to the branch are billed at cost. The December 31 inventory of the branch was P255,500.

What is the balance of the Investment in Branch account on Dec. 15, 2021 on the home office books?
5pts

 
  
4. Ayala Branch was billed by Home Office for merchandise at 140% of cost. At the end of its first
month, Ayala Branch submitted among other things, the following data:
 

Merchandise from Home Office (at billed price)          98,000.00

Merchandise purchased locally by Branch          40,000.00

Inventory, Dec. 31 of which P7,000 are of local

         28,000.00
purchase

Net sales for the month        180,000.00

The branch inventory at cost and the gross profit of the branch as far as the home office is
 
concerned are: 5pts

5. The Neneng Corporation established its San Pedro branch in March 2021. During the first year of
operations, the home office shipped to the branch merchandise which had cost P120,000. Three-fourths of
these merchandise was sold by the branch for P141,000. Operating expenses of the branch amounted to
P27,000.

How much total comprehensive income will the branch report if merchandise is billed by the home
office to the branch at 25% above cost? 5pts

6. On July 31, 2021, the home office in Manila establishes a sales agency in Bulacan. The following assets are
sent to the agency:
Cash (working fund to be operated under the imprest system)          22,000.00

Samples of merchandise          36,000.00

During the month of August, the following transactions occurred:

a. The sales agency submits sales order of P272,000, sales invoice was billed at P268,000. Cost of sales to
customers is P124,000.

b. Collections during the month amount to P58,200, net of 3% discount.

c. Home office disbursements chargeable to the agency are as follows:

Furniture          40,000.00

Salaries for the month          21,600.00

Annual rent of office space          36,000.00

d. On August 31, the sales agency working fund is replenished. Paid vouchers submitted by the sales agency
amounting to P17,925. Samples are useful until Dec. 31, 2021 which, at this time, are believed to have a
salvage value of 15% of cost. Furniture is depreciated at 18% per annum.

What is the total comprehensive income of the sales agency for the month of August? 5pts