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  • Home Office and Branch

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    Johnallenson Dacosin
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    The home office shipped goods worth $145,000 to its branch at a 30% markup over cost. The home office reported net income of $52,500 from operations and $290,000 in operating expenses, resulting in a net income of $52,500 - $290,000 = -$237,500. The branch reported net income of $720,000 in sales and $110,000 in operating expenses, resulting in a net income of $720,000 - $110,000 = $610,000. The combined net income is $52,500 + $610,000 - $237,500 = $425,000.

    Original Description:

    HO AND BRANCH PRACTICE PROBLEMS

    Original Title

    Home-Office-and-Branch

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    The home office shipped goods worth $145,000 to its branch at a 30% markup over cost. The home office reported net income of $52,500 from operations and $290,000 in operating expenses, resulting in a net income of $52,500 - $290,000 = -$237,500. The branch reported net income of $720,000 in sales and $110,000 in operating expenses, resulting in a net income of $720,000 - $110,000 = $610,000. The combined net income is $52,500 + $610,000 - $237,500 = $425,000.

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    © All Rights Reserved
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    7 views1 page

    Home Office and Branch

    Uploaded by

    Johnallenson Dacosin
    The home office shipped goods worth $145,000 to its branch at a 30% markup over cost. The home office reported net income of $52,500 from operations and $290,000 in operating expenses, resulting in a net income of $52,500 - $290,000 = -$237,500. The branch reported net income of $720,000 in sales and $110,000 in operating expenses, resulting in a net income of $720,000 - $110,000 = $610,000. The combined net income is $52,500 + $610,000 - $237,500 = $425,000.

    Copyright:

    © All Rights Reserved
    Download as DOCX, PDF, TXT or read online from Scribd
    Flag for inappropriate content
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    of 1

    Home Office and Branch

    The ff. are some of the account balances of the home office and its branch on Dec. 31, 2022:
    HO Book Branch Book
    Inventory, Jan. 1, 2022 20,000 58,000
    Shipments from HO - 188,500
    Purchases 900,000 200,000
    Shipments to branch 145,000 -
    AOI 52,500 -
    Sales 1,200,000 720,000
    Opex 290,000 110,000

    Physical count, the EI of the branch is 79,700 including goods purchased from outsiders of 27,700, while the EI of the HO
    is 120,000. HO billed its branch for merchandise shipments at 30% above cost.

    Compute the ff.:


    1. Net income reported in the book of HO
    2. Net income reported in the book of Branch
    3. Combined net income
    4. AOI ending balance
    5. EI to be reported in the combined FS

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