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    Home Office and Branch Accounting Problem 2

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    Alyssa Bianca Cagunan
    The Davao Company opened a new branch in Cebu City on January 2, 2018. The summary provides the statement of financial position for the home office and details transactions between the home and branch offices throughout 2018, including transfers of cash and merchandise between them, sales, purchases, expenses, collections and payments. Adjusting entries are also provided for depreciation, inventory, prepaid expenses and accrued expenses for both offices as of December 31, 2018.

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    Home Office and Branch Accounting Problem 2

    Uploaded by

    Alyssa Bianca Cagunan
    82 views2 pages
    The Davao Company opened a new branch in Cebu City on January 2, 2018. The summary provides the statement of financial position for the home office and details transactions between the home and branch offices throughout 2018, including transfers of cash and merchandise between them, sales, purchases, expenses, collections and payments. Adjusting entries are also provided for depreciation, inventory, prepaid expenses and accrued expenses for both offices as of December 31, 2018.

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    The Davao Company opened a new branch in Cebu City on January 2, 2018. The summary provides the statement of financial position for the home office and details transactions between the home and branch offices throughout 2018, including transfers of cash and merchandise between them, sales, purchases, expenses, collections and payments. Adjusting entries are also provided for depreciation, inventory, prepaid expenses and accrued expenses for both offices as of December 31, 2018.

    Copyright:

    © All Rights Reserved
    Download as DOCX, PDF, TXT or read online from Scribd
    Download as docx, pdf, or txt
    82 views2 pages

    Home Office and Branch Accounting Problem 2

    Uploaded by

    Alyssa Bianca Cagunan
    The Davao Company opened a new branch in Cebu City on January 2, 2018. The summary provides the statement of financial position for the home office and details transactions between the home and branch offices throughout 2018, including transfers of cash and merchandise between them, sales, purchases, expenses, collections and payments. Adjusting entries are also provided for depreciation, inventory, prepaid expenses and accrued expenses for both offices as of December 31, 2018.

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    © All Rights Reserved
    Download as DOCX, PDF, TXT or read online from Scribd
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    On January 2, 2018, the DAVAO Company opened a new branch in CEBU CITY.

    The statement
    of financial position of the home office on January 2, 2018 is given below
    DAVAO Company (Home Office)
    Statement of Financial Position
    January 2, 2018

    ASSETS Liabilities and Stockholders Equity


    Cash 88,950.00 Accrued Expenses 1,875.00
    Accounts Receivable 41,475.00 Accounts Payable 34,200.00
    Prepaid Expenses 2,700.00
    Merchandise Inventory 60,180.00 Ordinary Share P20 par 75,000.00
    Furniture and Fixtures 30,000.0 Retained Earnings 105,630.00
    0
    Accumulated Dep. 6,600.00 23,400.00
    Total Assets 216,705.00 Total Liab. And SHE 216,705.00

    The following is the summary of the transactions of the hone office and the branch for 2018:

    HOME OFFICE TRANSACTIONS


    a. Transfers of cash to branch, P63,750.00
    b. Transfer of merchandise to branch (billed at cost), P75,300.00
    c. Sales on account, P157,500.00
    d. Purchase on account, P183,750.00.
    e. Collections of accounts, P170,400.00.
    f. Payments of accounts, P186,000.00.
    g. Expenses paid, P39,900.
    h. Cash received from branch, P80,100.00
    i. Dividends paid, P15,000.00

    Adjusting date on December 31:


    Depreciation for the year, P1,770.00
    Merchandise inventory, P72,750.00
    Prepaid Expenses, P3,075.00
    Accrued Expenses, P2,025.00

    BRANCH TRANSACTIONS
    a. Cash received from home office, P63,750.00.
    b. Merchandise received from home office, P75,300.00.
    c. Sales on account, P99,000.00.
    d. Purchases on account, P33,750.00.
    e. Collections of accounts deposited to the credit of the home office, P80,800.00.
    f. Payments of accounts, P18,375.00.
    g. Purchase of furniture and fixtures for cash, P12,000.00.
    h. Expenses paid, P27,000.00.

    Adjusting data on December 31:


    Depreciation for the year, P975.00.
    Merchandise inventory, P35,250.00.
    Prepaid Expenses, P1,125.00.
    Accrued expenses, P450.00.

    Required:
    1. Prepare the journal entries to record the foregoing transactions for (a) the branch and
    (b) the home office.
    2. Prepare the journal entries to adjust and close the books for (a) the branch, and (b) the
    home office.
    3. Prepare individual statements for the branch and the home office.
    4. Prepare combined statements for the branch and the home office.

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