Ba 118.2 Q1 Ho _ Branch.pptx

BA 118.2

Home Office & Branch Accounting

QUIZ #1

1. Prepare journal entries in the books of the home office assuming the home office uses the periodic inventory system & agency income is (1) determined separately and (2) not determined separately. ABC Company has just established its Tacloban Agency. The following were the transactions for the month:

a) Working fund is set-up. Amount is ₱12,000. b) ABC ships samples to Tacloban Agency, ₱5,000. c) ABC receives sales orders from agency, ₱20,000. d) Cost of sales related to (c) is ₱11,000.

1. Prepare journal entries in the books of the home office assuming the home office uses the periodic inventory system & agency income is (1) determined separately and (2) not determined separately.

e) ABC replenished the agency working fund, ₱2,200. f) ABC charges the agency for various expenses, ₱1,500. g) At end of the month, agency samples inventory was counted at ₱3,200. h. Closed the nominal accounts of the agency.

BA 118.2

2. Given the following transactions, prepare all indicated entries in the books of the Home Office (HO) and the Branch: a) The HO shipped to the branch inventory with cost of ₱100,000. Shipments will be recorded at cost.

a2) The HO shipped to the branch inventory with cost of ₱150,000. Shipments are billed at 120% of cost.

BA 118.2

For b & c: The HO transferred equipment with book value of ₱18,000 to the branch. Assume: b) The equipment will be carried in the books of the Branch. c) The equipment will be carried in the books of the HO.

BA 118.2

For d & e: The branch purchased furniture and fixtures with cost of ₱54,000. Assume: d) The furniture and fixtures will be carried in the books of the Branch.

e) The furniture and fixtures will be carried in the books of the HO.

BA 118.2

f) The Branch remitted cash of ₱112,000 to the HO.

g) The HO paid selling expenses of ₱25,000. This was attributable to the Branch. h) The Branch paid selling expenses of ₱35,000. This was attributed to HO operations. BA 118.2

i) The Branch collected HO accounts receivable of ₱20,000. j) The HO collected Branch accounts receivable of ₱40,000.

BA 118.2

For k, l & m: Depreciation on equipment is

recorded, ₱2,500. k) The equipment is used by branch & is carried in the books of the Branch. l) The equipment is used by branch & is carried in the books of the HO. m) The equipment is used by HO & is carried in the books of the HO. n) The Branch reports net income of ₱228,000.

BA 118.2