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    HOBAT-11-30-2024

    Uploaded by

    Paul De Asis
    For educational purposes

    Copyright:

    © All Rights Reserved
    Download as DOCX, PDF, TXT or read online from Scribd

    HOBAT-11-30-2024

    Uploaded by

    Paul De Asis
    3 views1 page
    For educational purposes

    Copyright

    © © All Rights Reserved

    Available Formats

    DOCX, PDF, TXT or read online from Scribd

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    For educational purposes

    Copyright:

    © All Rights Reserved
    Download as DOCX, PDF, TXT or read online from Scribd
    Download as docx, pdf, or txt
    3 views1 page

    HOBAT-11-30-2024

    Uploaded by

    Paul De Asis
    For educational purposes

    Copyright:

    © All Rights Reserved
    Download as DOCX, PDF, TXT or read online from Scribd
    Download as docx, pdf, or txt
    You are on page 1of 1

    1. AMNESTY PARDON Co. is currently preparing its combined financial statements.

    At December 31, 20x1, the home office shows a ₱624,000 balance in its
    “Investment in branch” account while the branch showed a ₱280,800 balance in its
    “Home office” account. The following information has been gathered:
    (a) The home office shipped merchandise worth ₱80,000 to the branch during
    December 20x1 which the latter has received and recorded only in January
    20x2.
    (b) The home office collected ₱40,000 accounts receivable on behalf of the branch.
    The branch did not yet receive the credit memo sent by the home office.
    (c) The branch returned damaged merchandise worth ₱120,000 to the home office.
    The home office did not yet receive the debit memo sent by the branch.
    (d) A remittance of cash collections amounting to ₱160,000 was not yet recorded by
    the home office.
    (e) The home office allocated overhead cost of ₱20,000 to the branch which the
    latter has recorded twice.
    (f) Freight charge of ₱48,000 paid by the home office for shipments of merchandise
    to the branch was recorded by the latter as ₱4,800.

    How much is the adjusted balance of the “home office” account?

    2. ABC Co. decided to open a branch in Manila. Shipments of merchandise to the


    branch totaled ₱54,000 which included a 20% mark-up on cost. The branch
    submitted the following report summarizing its operations for the period ended
    December 31, 20x1.

    Sales on account 74,000


    Sales on cash basis 22,000
    Collection of account 60,000
    Expenses paid 38,000
    Expenses unpaid 12,000
    Purchase of merchandise for cash 26,000
    Inventory on hand, Dec. 31; 80% from home office 30,000
    Remittance to home office 55,000

    How much is the branch’s ending inventory at cost?


    How much is the profit (loss) of the branch as far as the home office is concerned?

    3. Shipments received from the home office are billed at 120% above cost. During the
    year, the branch received shipments billed at ₱480,000 and returned damaged
    goods with billed price of ₱72,000. The branch has an ending inventory of
    ₱120,000, at billed price. The branch reported loss of ₱40,000 in its individual
    financial statements.

    How much is the balance of the “allowance for markup” account before year-end
    adjustments?
    How much is the true profit of the branch to be taken up in the home office books?

    4. The home office bills shipments of merchandise to its branch at a markup of 20%
    based on the billed price. At the beginning of the period, the “Allowance for
    markup” account has a credit balance of ₱16,000. During the period, the home
    office made shipments of goods worth ₱960,000, at cost. The branch reported an
    ending inventory of ₱480,000, at billed price.

    How much is the realized markup?

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