Trial Balance Adjustment Combined IS Combined BS

Home Office Branch

Dr Dr Cr Dr Cr Dr Cr
Cash 157,600 4,250 161,850
Accounts Receivable 8,650 12,600 21,250
Merchandise Inventory 40,120 40,120
Purchases 122,500 22,500 145,000
Shipment from Home Office 50,200 50,200
Prepaid Expenses 1,800 250 2,800
750
Investment in Branch 37,900 37,900
Expenses 26,600 18,000 100 250 44,000
300 750
Furnitures & Fixtures 20,000 8,000 28,000
Depreciation Expense 1,180 1,830
650
Merchandise Inv. (BS) 48,500
23,500
TOTAL 415,170 115,550
Acc. Depreciation 4,400 1,180 6,230
650
Merchandise Inv. End (IS) 48,500
23,500
Sales 105,000 66,000 171,000
Shipment to Branch 50,200 50,200
Accrued Expenses 1,250 100 1,650
300
Accounts Payable 145,300 10,250 155,550
Retained Earnings 60,420 60,420
Common Stock 50,000 50,000
Home Office 37,900 37,900
TOTAL 416,570 114,150 91,330 91,330 230,950 243,000 285,900 273,850
12,050 12,050
243,000 243,000 285,900 285,900
 BALANCE SHEET - HOME OFFICE COMBINED BALANCE SHEET
ASSETS ASSETS
Cash 157,600 Cash 161,850
Accounts Receivable 8,650 Accounts Receivable 21,250
Merchandise Inv. (BS) 48,500 INCOME STATEMENT - Home Office Merchandise Inv. (BS) 72,000
Prepaid Expenses 2,050 Sales 105,000 Prepaid Expenses 2,800
Merchandise Inventory 40,120
Investment in Branch 37,900 Furnitures & Fixtures 28,000
Shipment From Home
Furnitures & Fixtures 20,000 Less: Acc. Depreciation 6,230
Purchases 122,500
Less: Acc. Depreciation 5,580 TGAS 162,620 TOTAL ASSETS 279,670
TOTAL ASSETS 269,120 Less: Shipment to Branch 50,200
Mdse. Inventory end 48,500 63,920 LIABILITIES & EQUITY
LIABILITIES & EQUITY Gross Income 41,080 Accrued Expenses 1,650
Accrued Expenses 1,350 Branch loss - 1,400 Accounts Payable 155,550
Accounts Payable 145,300 Expenses 26,450 Retained Earnings 72,470
Retained Earnings 72,470 Depreciation Expense 1,180 Common Stock 50,000
Common Stock 50,000 Net Income 12,050 TOTAL 279,670
TOTAL 269,120

BALANCE SHEET - BRANCH INCOME STATEMENT - BRANCH

ASSETS Sales 66,000
Cash 4,250 Purchases 22,500
Shipment From Home 50,200
Accounts Receivable 12,600
TGAS 72,700
Merchandise Inv. (BS) 23,500
Less:Mdse. Inventory end 23,500 49,200
Prepaid Expenses 750 Gross Income 16,800
Furnitures & Fixtures 8,000 Expenses 17,550
Less: Acc. Depreciation 650 Depreciation Expense 650
TOTAL ASSETS 48,450 Net Loss -1,400

COMBINED INCOME STATEMENT

LIABILITIES & EQUITY
Sales 171,000
Accrued Expenses 300
Merchandise Inventory 40,120
Accounts Payable 10,250
Purchases 145,000
Home Office 37,900
TGAS 185,120
TOTAL 48,450
Less: Mdse. Invty. End. 72,000 113,120
Gross Income 57,880
Expenses 44,000
Depreciation Expense 1,830
Net Income 12,050
 HOME OFFICE Dr Cr BRANCH Dr Cr
a) Investment in branch 42,500 a) Cash 42,500
Cash 42,500 Home Office 42,500
b) Investment in Branch 50,200 b) Shipment from Home Office 50,200
Shipment to Branch 50,200 Home Office 50,200
c) Account receivable 105,000 c) Account Receivable 66,000
Sales 105,000 Sales 66,000
d) Purchases 122,500 d) Purchases 22,500
Accounts Payable 122,500 Account Payable 22,500
e) Cash 124,000 e) Home Office 53,400
Account Receivable 124,000 Account Receivable 53,400
f) Expenses 26,600 f) Account Payable 12,250
Cash 26,600 Cash 12,250
g) Cash 53,400 g) Furniture & Fixtures 8,000
Investment in Branch 53,400 Cash 8,000
h) Retained Earnings 10,000 h) Expenses 18,000
Cash 10,000 Cash 18,000
ADJUSTING ENTRIES ADJUSTING ENTRIES
1)Depreciation Expense 1,180 1)Depreciation Expense 650
Acc. Depreciation 1,180 Acc. Depreciation 650
2) Prepaid Expenses 250 2) Prepaid Expenses 750
Expenses 250 Expenses 750
3) Expenses 100 3) Expenses 300
Accrued Expenses 100 Accrued Expenses 300

Closing Entries Closing Entries

Sales 105,000 Sales 66,000
Shipment to Branch 50,200 Merchandise Inventory end. 23,500
Merchandise Inventory end. 48,500 Income Summary 1,400
Merchandise Inventory Beg. 40,120 Purchases 22,500
Purchases 122,500 Shipment from Home Office 50,200
Expenses (26,600+100-250) 26,450 Expenses 17,550
Depreciation Expense 1,180 Depreciation Expense 650
Income Summary 13,450
Home Office 1,400
Income Summary 1,400 Income Summary 1,400
Branch loss 1,400
Income Summary 12,050
Retained Earnings (13,450-1,400) 12,050
Branch loss 1,400
Investment in Branch 1,400