1-lon,c Office, Brunch and Age n

-- c.y T r ..,nsact1on

HOME OFFICE, BRANCH ANO AGENCY !RAN

SA CTION (HOBAT)

Home Qffice book: Branch book:

Investment in
Branch or Branch Shipment
w/o Current From Home
At cost: AFOBIA (at cost) Xx Office (SrHO) xx
Shipment To Home Office
Branch (STB) xx Current xx
..--
Above wl Branch Current
cost: AFOBIA (at Billed Price) Xx
SFHO (at billec
STB (at cost) xx price) xx
AFOBIA (mark- Home Office
xx
up)
.
AFOBIA - Allowance for Overvaluatron ,n Branch Inventory Account
Current

Remember for PPE:

A (Acquirer) - Credit: Cash or Accounts Payable

R (Recorder)- Debit:PPE ;Credit. Accumulated Depreciation

U (User}-Debit: Depreciation Expense

For Inter-branch Transfer:

Should be freight (FIN-S) xx

Less: Actual Freight Cost (xx)
Excess Freight X!-1 (�x) .
Note: If positive, Other income; lf·negative, Expense

Branch 1 Branch 2
SFHO SFHO. Xx
(xx)
Less: FIN-A FIN-S xx
(xx)
le less: Cash out (xx)
_ ss: Cash out (xx)
xx
HO HOCU - Credited
_ CU -Debited (xx)
 Home Office, Branch and Agency Transaction

FIN-A.: Freight In Actual

FIN-S: Freight In Should Be
HOCU: Home Office Current

Home Office Branch Transaction at ABOVE COST or at Billed Price:

Billed Price Cost =Allowance (Markup)
81-wfin Xx Xx =xx
SFHO Xx Xx =xx
Unadjusted (pre closing) I Unrealized
TGAS Xx Xx =xx Profit before adjustment
Less: El­ After (post-closing)/ Unrealized
w/in (xx) (xx} =(xx) Profit after/ Adjusted TO
CGS-wfin Xx Xx =xx Adjustment (by} I Realized Profrt
CGS-OP Xx Xx
Total CGS Home
office
Perspective
True/Rea/
Perspective In line with
of branch GAAP
Sales Revenue xx
Total CGS xx (at Billed Price}
Gross Profit xx
Less: OPEX (xx)
Branch Net Income xx (Perspective of Branch}
Adjustment• or (Overvaluation in CGS) xx
True Branch Net Income xx (Perspective of Home office}