Title | AFAR 2 Quiz 5 Carl - I\'m not sure about my answers |
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Author | Blondie |
Course | Accountancy |
Institution | Xavier University-Ateneo de Cagayan |
Pages | 6 |
File Size | 106.2 KB |
File Type | |
Total Downloads | 104 |
Total Views | 136 |
I'm not sure about my answers...
Problem 1: The following information are available from the books of the home office and branch: HOB BB Cash 2,200,000 132,000 Accounts receivable 360,000 200,000 Inventory, beginning 600,000 Shipment from home office 912,000 Purchases 2,400,000 80,000 Freight in 64,000 36,000 Shipment to branch 760,000 Investment in branch 1,200,000 Allowance for mark up 152,000 Equipment 1,440,000 800,000 Accumulated depreciation 144,000 80,000 Accounts payable 144,000 80,000 Share capital 4,000,000 Retained earnings beginning 304,000 Home office 1,200,000 Sales 3,200,000 1,000,000 Operating expenses 440,000 200,000 Inventory end - From outside purchases 920,000 20,000 - From home office 480,000 a. How much is the combined net income? b. How much is the ending inventory in the combined financial statements? c. The total home office account in the books of the branch?
Shipment from HO Inventory end Cogs
760,000 400,000 360,000
Purchases Ending inv out Cogs
80,000 (20,000) 60,000
Inventory beginning Purchases Freight in Shipment to branch Inventory end Cogs HO
912,000 480,000 432,000
600,000 2,400,000 64,000 (760,000) (920,000) 1,384,000
Combined Sales 4,200,000 Branch Cogs (360,000) Cogs outside (60,000) Cogs HO (1,384,000) Gross profit 2,396,000 Expenses (640,000) Combined Net Income 1,7 1,76,000 6,000
152,000 80,000 72,000
B. Inventory HO Inventory Branch Inventory outside Inventory end at cost C. Home office Sales Cost of goods sold Expenses Home office end
920,000 400,000 20,000 1,340,000
1,200,000 1,000,000 (420,000) (200,000) 1,580,000
Problem 2: XYZ Corporation has a branch in Manila. At December 31, 2030, the home office shows a 342,000 balance in its branch current account. The following information has been gathered during the reconciliation process: The branch sent by mistake a credit memo amounting to 12,000 to the home office. The home office did not record it. A credit memo sent by the branch to the home office amounting to 3,000 was recorded by the home office twice. A credit memo sent by the home office to the branch amounting to 6,000 was not recorded by the branch. A credit memo sent by the home office to the branch amounting to 30,000 was not recorded by the branch. A debit memo sent by the branch to the home office amounting to 50,000 was recorded by the home office as 500,000. A debit memo sent by the home office to the branch amounting to 10,000 was recorded by the branch. a. What is the unadjusted balance of the home office account? B. The net adjustment in the home office books is a
Beginning 1st 2nd 3 4 5 6 Ending balance A. 837,000 B. 447,000
HO
Branch
342,000
837,000 (12,000)
(3,000) (6,000) (30,000) 450,000 789,000
789,000
Problem 3: Selected accounts form the December 31, 2020 trial balance of M Company and its branch follow: HO B Inventory, January 1 46,000 23,100 Branch current 116,600 Purchases 380,000 Shipments from HO 209,000 Freight in 10,450 Expenses 104,000 58,100 Home office current 106,600 Sales 310,000 280,000 Shipments to branch 200,000 Branch merchandise markup 22,000 As of December 31, 2020, a shipment with a billing of 11,000 was in transit to the branch. Freight cost, typically 5% of the billing price is inventoriable. Merchandise on hand at yearend were: at home office, 64,000 at cost; at branch 33,000 at billing price. A. Branch net income as far as the home office is concerned? B. The combined net income for 2020? A.
33,000 11,000 44,000 /1.1 40,000 64,000 104,000
B. Sales COGS OPEX Combined NI
590,000 (352,100) (162, 100) 75,800
Problem 4: The home office bills its branch for merchandise shipments at 30% above cost. The following are some of the account balances on the books of home office and its branch as of December 31, 2020: HO B Inventory, January 1 35,000 101,500 Shipments from home office 263,900 Purchases 1,575,000 350,000 Shipments to branch 253,750 Branch inventory allowance 91,875 Sales 2,100,000 1,260,000 Operating expenses 507,500 192,500 Per physical count, the ending inventory of branch is 73,500 including goods from outside purchases of 48,475, ending inventory of the home office is 210,000. a. What is the cost of goods available for sale of the home office? b. What is the cost of goods available for sale of the branch? c. What is the total ending inventory to be shown on the combined financial statements? d. What is the combined net income for the year? A. Inventory beginning 35,000 Purchases HO 1,575,000 Shipment to branch (253,750) GAS HO 1,356,250
B. Beginning Shipment from HO Purchases Cost of GAS
101,500 263,900 350,000 715,400
C. Ending outside purchase Branch HO Ending inve inven ntory
48,475 19,250 (73,500 -48,475) / 1.2 50,750 (253,700 - (263,900 / 1.2) 210,000 328,475
D Home office GAS Ending inventory COGS HO
1,356,250 (210,000) 1,146,250
Branch GAS Inventory end COGS Branch
715,400 (73,500) 641,900
Sales Cogs HO Cogs Branch Gross profit Expenses
3,360,000 (1,146,250) (571,025) at cost 1,642,725 (700,000)
Combined NI
942,7 942,72 25
Problem 5: The home office shipped merchandise to branch at 25% above cost. The branch then sells the merchandise at 25% above billed price to customers. On November 30, all of the branch merchandise was destroyed by fire. The following records were salvage by the branch: Merchandise, January 1 (at billed price) 82,500 Shipments from home office 55,000 Purchases from outsiders at 20% markup on cost 3,750 Sales 84,500 Sales return and allowances 1,875 a. What is the cost of inventory destroyed by fire? b. How much is the cost of sales of the branch coming from the home office at billed price? Merchandise beginning Shipments from HO Purchases Net sales ( COGS) 1.25 Inventory d destroyed estroyed B 66,100
66,000 (82,500 /1.25) 44,000 (55,000 / 1.25) 3,750 (52,880) (84,500 - 1,875) / 1.25 / 60 60,870 ,870...