Quezon Co. is currently preparing its combined financial statements for the year ended December 31, 2021. As of this date, the "Investment in branch" account has a balance of P380,000 while the "Home office" account has a balance of $528,000. The following information has been gathered: a. The home office allocated unpaid utilities expenses amounting to $40,000 to the branch which the branch did not record in full. Instead, the branch sent a wrong adjusting memo to the home office reducing the charge by P10,000 and setting up a liability for the remaining amount. b. The home office erroneously credited the branch for a return of shipment of merchandise worth $100,000. The branch did not make any return of merchandise. c. The branch mistakenly received a copy of the home office correcting entry for item (b) above dated January 3, 2022 and entered a credit in favor of the home office on December 31, 2021. d. The branch mistakenly sent the home office a debit memo amounting to P12,000 for an apparent remittance of collections which did not happen. The home office did not record the debit memo. How much is the adjusted balance of the reciprocal accounts?

Quezon Co. is currently preparing its combined financial statements for the year ended December 31, 2021. As of this date, the "Investment in branch" account has a balance of P380,000 while the "Home office" account has a balance of $528,000. The following information has been gathered: a. The home office allocated unpaid utilities expenses amounting to $40,000 to the branch which the branch did not record in full. Instead, the branch sent a wrong adjusting memo to the home office reducing the charge by P10,000 and setting up a liability for the remaining amount. b. The home office erroneously credited the branch for a return of shipment of merchandise worth $100,000. The branch did not make any return of merchandise. c. The branch mistakenly received a copy of the home office correcting entry for item (b) above dated January 3, 2022 and entered a credit in favor of the home office on December 31, 2021. d. The branch mistakenly sent the home office a debit memo amounting to P12,000 for an apparent remittance of collections which did not happen. The home office did not record the debit memo. How much is the adjusted balance of the reciprocal accounts?

CONCEPTS IN FED.TAX.,2020-W/ACCESS

20th Edition

ISBN:9780357110362

Author:Murphy

Publisher:Murphy

Chapter6: Business Expenses

Section: Chapter Questions

Problem 44P

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