PROBLEM 5-4. RECONCILIATION OF HO AND BRANCH ACCOUNTS On December 31, 2019, the Home Office Equity account on the branch books has a balance of P44,000 and the Investment in Branch account on the home office books has a balance of P85,000. In analyzing the activity in each of these accounts for December, you find the following differences: 1. 2. 3. 4. 5. A P10,000 branch remittance to the home office initiated on December 27, 2019, was recorded on the home office books on January 3, 2020. A home office inventory shipment to the branch on December 28, 2019, was recorded by the branch on January 4, 2020; the billing of P20,000 was at cost. The home office incurred P12,000 of advertising expenses and allocated P5,000 of this amount to the branch on December 15, 2019. The branch has not recorded this transaction. A branch customer erroneously remitted P3,000 to the home office. The home office recorded this cash collection on December 23, 2019. Meanwhile, back at the home office, no entry has been made yet. Inventory costing P43,000 was sent to the branch by the home office on December 10, 2019. The billing was at cost, but the branch recorded the transaction at P34,000.
PROBLEM 5-4. RECONCILIATION OF HO AND BRANCH ACCOUNTS On December 31, 2019, the Home Office Equity account on the branch books has a balance of P44,000 and the Investment in Branch account on the home office books has a balance of P85,000. In analyzing the activity in each of these accounts for December, you find the following differences: 1. 2. 3. 4. 5. A P10,000 branch remittance to the home office initiated on December 27, 2019, was recorded on the home office books on January 3, 2020. A home office inventory shipment to the branch on December 28, 2019, was recorded by the branch on January 4, 2020; the billing of P20,000 was at cost. The home office incurred P12,000 of advertising expenses and allocated P5,000 of this amount to the branch on December 15, 2019. The branch has not recorded this transaction. A branch customer erroneously remitted P3,000 to the home office. The home office recorded this cash collection on December 23, 2019. Meanwhile, back at the home office, no entry has been made yet. Inventory costing P43,000 was sent to the branch by the home office on December 10, 2019. The billing was at cost, but the branch recorded the transaction at P34,000.
Intermediate Accounting: Reporting And Analysis
3rd Edition
ISBN:9781337788281
Author:James M. Wahlen, Jefferson P. Jones, Donald Pagach
Publisher:James M. Wahlen, Jefferson P. Jones, Donald Pagach
Chapter6: Cash And Receivables
Section: Chapter Questions
Problem 15P: Comprehensive Receivables Problem Blackmon Corporations December 31, 2018, balance sheet disclosed...
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Prepare a
Correction on situation number 4: Meanwhile, back the the BRANCH OFFICE, no entry has been made yet.
Transcribed Image Text:PROBLEM 5-4. RECONCILIATION
OF HO AND BRANCH ACCOUNTS
On December 31, 2019, the Home Office Equity account on the branch books has
a balance of P44,000 and the Investment in Branch account on the home office
books has a balance of P85,000. In analyzing the activity in each of these accounts
for December, you find the following differences:
1.
2.
3.
4.
5.
A P10,000 branch remittance to the home office initiated on December 27,
2019, was recorded on the home office books on January 3, 2020.
A home office inventory shipment to the branch on December 28, 2019, was
recorded by the branch on January 4, 2020; the billing of P20,000 was at
cost.
The home office incurred P12,000 of advertising expenses and allocated
P5,000 of this amount to the branch on December 15, 2019. The branch has
not recorded this transaction.
A branch customer erroneously remitted P3,000 to the home office. The
home office recorded this cash collection on December 23, 2019.
Meanwhile, back at the home office, no entry has been made yet.
Inventory costing P43,000 was sent to the branch by the home office on
December 10, 2019. The billing was at cost, but the branch recorded the
transaction at P34,000.
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