HO operates a branch in Makati. On October 31, 2017, the Branch Current account had a balance of P300,000. In the process of reconciling the reciprocal current accounts, the items that follow were noted: a. The home office had billed the branch P75,000 for merchandise shipment still in transit of October 31. b. A home office customer’s account for P21,000 collected by the branch on October 26 has not been reported to the home office. c. The branch has failed to recognize its P5,000 share of advertising expense paid for by the home office. d. The branch reported a net income of P43,500 during the fiscal period then ended; this was erroneously taken up as P45,500 by the home office. Assuming that all other transactions related to the home office and its branch are correctly recorded, the unadjusted balance of the home office current account as of October 31, 2017 is:

HO operates a branch in Makati. On October 31, 2017, the Branch Current account had a balance of P300,000. In the process of reconciling the reciprocal current accounts, the items that follow were noted: a. The home office had billed the branch P75,000 for merchandise shipment still in transit of October 31. b. A home office customer’s account for P21,000 collected by the branch on October 26 has not been reported to the home office. c. The branch has failed to recognize its P5,000 share of advertising expense paid for by the home office. d. The branch reported a net income of P43,500 during the fiscal period then ended; this was erroneously taken up as P45,500 by the home office. Assuming that all other transactions related to the home office and its branch are correctly recorded, the unadjusted balance of the home office current account as of October 31, 2017 is:

Financial Accounting

14th Edition

ISBN:9781305088436

Author:Carl Warren, Jim Reeve, Jonathan Duchac

Publisher:Carl Warren, Jim Reeve, Jonathan Duchac

Chapter5: Accounting Systems

Section: Chapter Questions

Problem 18E

See similar textbooks

Similar questions

The Home Office had two branches, Cebu and Davao. At the end of the year, December 31, 2022, the reciprocal account in Cebu Branch was P256,600. However, there were transactions discovered to have errors. • The home office shipped merchandise costing P87,000 to Cebu branch, but was record by the branch in the amount of P78,000. • Cebu collected Davao's customer accounts worth P25,000, but Davao charged its reciprocal account in the amount of P52,000 and the home office recorded the correct transaction. How much is the adjusted balance of the reciprocal accounts? A. 247,600 B. 238,600 C. 220,600 D. 265,600
On August 1, 2019, GREEN CO, a home office established two branches: ORANGE branch and APRICOT branch. GREEN, transferred P280,000 worth of cash and P1,225,000 worth of merchandise to its ORANGE branch. On August 15, the head office instructed ORANGE to transfer three-fourths of the merchandise and cash received to APRICOT branch. In addition, on October 6, 2019, shipments from the main office received by ORANGE branch amounting to P437,500 and freight, collect amounting to P22,750. Three-fifths of the said shipments were sold by ORANGE branch to customers. On November 9, 2019, upon instruction of the home office, ORANGE branch transferred to APRICOT half of the remaining immediate prior month shipments from GREEN. The receiving branch paid additional freight in the amount of P8,750. Had the merchandise been shipped from GREEN directly to APRICOT, only P6,650 worth of freight would have been incurred. Compute the balance of the Investment in APRICOT branch account in the separate…
On June 30, 2021, Alpha Co.'s Mega branch showed a Home Office account balance of $2,735 and the Home Office books showed an investment branch Mega of $2,555. The following additional information is given: Home office was charged for $120 for merchandise returned by Mega branch (merchandise is in transit) $1,200 shipment, charged by Home Office to Mega branch was actually sent and retained by Taco branch. Home office collects a Mega branch accounts receivable of $360 and fails to notify the branch. $1,500 shipment, intended and charged to Pasta branch was shipped to Mega branch and retained by the latter $200 emergency cash transfer from Spaghetti branch was not recorded in the Home Office books Home office erroneusly recorded Mega's net income for May 2021 at $1,627.5 The branch reported a net income of $1,267.5 What is the reconciled amount of the Home Office and Mega branch reciprocal amount?
On December 31, 2020, the Branch Current in the Home Office books shows a balance of P50,000. The following facts are ascertained: Merchandise billed at P 12,500 is in transit on December 31 from the home office to the branch. The branch collected a home office accounts receivable for P3,500. The branch did not notify the home office of such collection. On December 30, the home office sent cash of P7,500 to the branch, but this was charged to general expense; the branch has not received the cash as of December 31. Branch profit for December was recorded by the home office at P2,400 instead of P2,040. The branch returned supplies of P1,500 to the home office but the home office has not yet recorded the receipt of the supplies. Assume all other transactions have been properly recorded. What is the unadjusted balance of the Home Office Current account on the branch books on December 31, 2020?
On December 31, the Investment in Branch account on the home office books of the SG Company shows a balance of P168,000. The following are some of the transactions between the home office and the branch: a. Merchandise billed at P12,300 was shipped by the home office to the branch on December 28. The merchandise is in transit and has not been recognized on the books of the branch. b. The branch collected a home office accounts receivable of P50,000 but failed to notify the home office of this collection. c. The home office was charged P12,800 when the branch returned merchandise to the home office on December 31. The merchandise is in transit. d. The home office recorded incorrectly the branch net income for November at P22,500. The branch reported net income of P25,200. The unadjusted balance of the Home Office account was:
Jonel Corporation operates a branch in Cebu. In October, the HO shipped P 68,000 merchandise to this branch, which the branch credited the HO account for P 86,000. In November, the branch collected P2,000 HO accounts receivable. The HO was properly notified but debited Investment in Branch account for P 8,000. At the end of the year, the HO paid and recorded a P 12,000 expense for the branch but the branch has not yet made the appropriate entry for this. At year-end, the branch transferred P 50,000 cash to HO but the HO has not yet made the necessary entry. Based on the above, the corrections needed are a. HO to credit its Investment in Branch account for P 48,000, and the Branch to debit the HO account for P 18,000. b. HO to credit its Investment in Branch account for P 60,000 and the Branch to debit the HO account for P6,000 c. HO to credit its Investment in Branch account for P 56,000 and the Branch to debit the HO account for P 6,000. d. HO to credit its Investment in Branch…
On December 31, the Investment in Branch account on the home office books of the Unlimited Company shows a balance of P168,000. The following are some of the transactions between the home office and the branch:a. Merchandise billed at P12,300 was shipped by the home office to the branch on December 28. The merchandise is in transit and has not been recognized on the books of the branch.b. The branch collected a home office accounts receivable of P50,000 but failed to notify the home office of this collection.c. The home office was charged P12,800 when the branch returned merchandise to the home office on December 31. The merchandise is in transit.d. The home office recorded incorrectly the branch net income for November at P22,500. The branch reported net income of P25,200.1. The unadjusted balance of the Home Office account was: 2. What is the adjusted balance of the Home Office account?
The following transactions relating to branch SG and branch Popsters are the following: • On September 30, 2020, branch SG collected branch Popsters' accounts receivable of P80,000 less 3%discount. • On October 31, 2020, home office shipped merchandise costing P400,000 to branch SG. Freight of P6,000 was paid by the home office. It is the policy of the company to bill its branches at 25% above cost. • On November 30, 2020, upon the instruction of the home office, branch SG reshipped a quarter of the above merchandise to branch Popsters with freight of P3,000 (freight-collect). Had the goods been shipped directly to branch Popsters, the freight would have been only P1,400. What is the home office current account of branch SG as of October 31, 2020?
L Trading Company operates a branch in Dallas, Texas. At close of business on December 31, 2008, Dallas Branch account in the home office books showed a debit balance of P225,770. The interoffice accounts were in agreement at the beginning of the year. For purposes of reconciling the interoffice accounts, the following facts were ascertained: (see image below) Compute for the unadjusted balance of the Home Office Current account a. 226485 b. 228485 c. 225770
Habiba Company has a single branch in Southwest. On March 1, 2020, the home ofﬁce accounting records included an Allowance for Overvaluation of Inventories: Southwest Branch ledger account with a credit balance of $32,000. During March, the following transactions occurred: On March 4, the home office shipped merchandise costing $66,000 to the Southwest Branch and billed it at a price representing a 40% markup on the billed price. On March 8, the branch sold 70% of the merchandise received from the home office on march 4 for $90,000 cash. On March 15, the branch sold 20% of the merchandise received from the home office on march 4 to Hope company for $30,000 on credit. On March 22, the home office informed the branch that it had collected 50% of the amount owed by Hope company. On March 28, the branch paid operating expenses of $10,000 cash. On March 29, Hope company paid the remaining amount due to Southwest branch, On March 30, the home office allocated operating expenses of $4,000…
The Company has a single branch in Southwest. On March 1, 2020, the home ofﬁce accounting records included an Allowance for Overvaluation of Inventories: Southwest Branch ledger account with a credit balance of $32,000. During March, the following transactions occurred: On March 4, the home office shipped merchandise costing $66,000 to the Southwest Branch and billed it at a price representing a 40% markup on the billed price.On March 8, the branch sold 70% of the merchandise received from the home office on march 4 for $90,000 cash.On March 15, the branch sold 20% of the merchandise received from the home office on march 4 to Hope company for $30,000 on credit.On March 22, the home office informed the branch that it had collected 50% of the amount owed by Hope company.On March 28, the branch paid operating expenses of $10,000 cash.On March 29, Hope company paid the remaining amount due to Southwest branch,On March 30, the home office allocated operating expenses of $4,000 to the…
ABC Company operates a number of branches. On December 31, 2022, its Mindanao branch showed a Home Office Account balance of P547,000 and the home office books showed an Investment in Mindanao branch of P511,000. The following information are made available: 1. A P300,000 shipment, originally intended and charged to Luzon branch was actually shipped to Mindanao branch. 2. Home office was charged for P24,000 for merchandise returned by Mindanao branch on December 30. The home office has not yet received the said merchandise. 3. A P240,000 shipment was charged by the home office to Mindanao branch. However, it was actually shipped and retained by Visayas branch. 4. A P40,000 cash transfer from Visayas was not taken up in the books of the home office. 5. Home office collected P72,000 of the accounts receivable of Mindanao. The branch was not notified of the collection. 6. The home office recorded Mindanao net income at P325,500. However, the correct net income of the branch is P253,500.…