4.2.

a Assignment - Home Office, Branch, and Agency Accounting

1. On December 31, the unadjusted balance of Investment in Baclaran Branch Account is P165,920 in the Home Of
examination of the books of the Home Office and its Baclaran Branch:
a. Transfer of fixed assets from Home Office amounting to P53,960 was not booked by Baclaran Branch.
b. P10,000 covering marketing expense of Bataan Branch was charged by Home Office to Baclaran Branch.
c. Baclaran Branch recorded a debit note on inventory transfers from Home Office of P75,000 twice.
d. Home Office recorded cash transfer of P65,700 from Baclaran Branch as coming from Davao Branch.
e. Baclaran Branch reversed a previous debit memo from Bohol Branch amounting to P10,500. Home Office decide
f. Baclaran Branch recorded a debit memo from Home Office of P4,650 as P4,560.

What is the unadjusted balance of Home Office Current Account in Baclaran Branch’s books on December 31? 5pts

Answer:
Branch Home Office
Unadjusted balance 165,920.00 69,270.00
Adjustements:
a. (53,960.00)
b. (10,000.00)
c. 75,000.00
d. (65,700.00)
e.
f. (90.00)
Adjusted balance 90,220.00 90,220.00
 is P165,920 in the Home Office’s Book. The following data were found in your

Baclaran Branch.
to Baclaran Branch.
5,000 twice.
m Davao Branch.
10,500. Home Office decided that this charge is appropriately Davao’s Branch.

ooks on December 31? 5pts

2. After examining on a comparative basis the inter-office account of the Bulacan Company with its suburban branch
following discrepancies at the close of the business on June 30, 2021 were seen:

a. A charge for labor by the Home Office, P500 was recorded twice by the branch.
b. A charge of P895 was made by the Home Office for freight on merchandise, but the amount was recorded
c. A charge of P980 (furniture and fixture) on the Home Office books was taken up by the Branch as P890.
d. A credit by the Home Office for P350 (merchandise allowances) was taken up by the Branch as P400.
The Home Office charged the Branch P425 for interest on open account which the Branch failed to take u
e. adjusting memo, reducing the charge by P100 and set up a liability for the net amount.
f. The Home Office received P5,000 from the sale of a truck which is erroneously credited to the Branch; the
g. The Branch by mistake sent the Home Office a debit note for P370 representing its proportion of a bill for r
h. The Branch inadvertently received a copy of the Home Office entry dated July 19, 2021 correcting item (f)

At June 30, 2011, the unadjusted balance of the Investment in Branch account on the Home Office books showed P
balance.

What is the unadjusted balance of the Home Office account on the branch books on June 30, 2021? 5pts

Answer:
Branch Home Office
Unadjsuted balance 175,520.00 184,279.50
Adjustments:
a. (500.00)
b. 805.50
c. 90.00
d. 50.00
e. 425.00
f. 5,000.00
g. 370.00
h. (5,000.00)
Adjusted balance 180,520.00 180,520.00
any with its suburban branch and the similar account carried on the latter's books, the

ut the amount was recorded by the Branch as P89.50.

up by the Branch as P890.
by the Branch as P400.
h the Branch failed to take up in full; instead, the Branch sent to the Home Office a wrong
amount.
y credited to the Branch; the Branch did not charge the Home Office therewith.
ng its proportion of a bill for repairs of truck; the Home Office did not record it.
19, 2021 correcting item (f) and entered a credit in favor of the Home Office as of June 30, 2021.

ome Office books showed P175,520. At the beginning of the year, the inter-office accounts were in

ne 30, 2021? 5pts

3. Cebu branch submitted the following data to its home office in Manila for 2021, its first year of operation:
Sales 2,300,000.00
Shipments from home office 1,850,000.00
Operating expenses 235,000.00
Home Office 480,000.00

Shipments to the branch are billed at cost. The December 31 inventory of the branch was P255,500.

What is the balance of the Investment in Branch account on Dec. 15, 2021 on the home office books? 5pts

Answer:
Home Office 480,000.00
Add: Net Income of Branch
Sales 2,300,000.00
Less; COGS
Shipments from home office 1,850,000.00
Less: Ending inventory (255,500.00) 1,594,500.00
Gross profit 705,500.00
Less: OPEX 235,000.00 470,500.00
Investment in Branch - Home Office Books, 12/15/21 950,500.00
ear of operation:

fice books? 5pts

4. Ayala Branch was billed by Home Office for merchandise at 140% of cost. At the end of its first month, Ayala Bran

Merchandise from Home Office (at billed price) 98,000.00

Merchandise purchased locally by Branch 40,000.00
Inventory, Dec. 31 of which P7,000 are of local purchase 28,000.00
Net sales for the month 180,000.00

The branch inventory at cost and the gross profit of the branch as far as the home office is concerned are: 5pts

Answer:
Net sales 180,000.00
Less: COGS
Purchases 40,000.00
Shipments from home office 70,000.00
Cost of goods available for sale 110,000.00
Less: Ending inventory 22,000.00 88,000.00
Gross profit 92,000.00
its first month, Ayala Branch submitted among other things, the following data:

concerned are: 5pts

5. The Neneng Corporation established its San Pedro branch in March 2021. During the first year of operations, the
merchandise which had cost P120,000. Three-fourths of these merchandise was sold by the branch for P141,000. O
P27,000.

How much total comprehensive income will the branch report if merchandise is billed by the home office to the branc

Answer:
Sales 141,000.00
Less: COGS 112,500.00
Gross Profit 28,500.00
Expenses 27,000.00
Total comprehensive income, Branch 1,500.00

Cost of shipment to branch 120,000.00

Add: Mark-up 30,000.00
Billed price of shipment to brach 150,000.00
Portion sold 3/4
Cost of sales at billed price 112,500.00
year of operations, the home office shipped to the branch
branch for P141,000. Operating expenses of the branch amounted to

home office to the branch at 25% above cost? 5pts

6. On July 31, 2021, the home office in Manila establishes a sales agency in Bulacan. The following assets are sent

Cash (working fund to be operated under the imprest system) 22,000.00

Samples of merchandise 36,000.00

During the month of August, the following transactions occurred:

a. The sales agency submits sales order of P272,000, sales invoice was billed at P268,000. Cost of sales to
b. Collections during the month amount to P58,200, net of 3% discount.
c. Home office disbursements chargeable to the agency are as follows:
Furniture 40,000.00
Salaries for the month 21,600.00
Annual rent of office space 36,000.00
On August 31, the sales agency working fund is replenished. Paid vouchers submitted by the sales agenc
Samples are useful until Dec. 31, 2021 which, at this time, are believed to have a salvage value of 15% of
d. at 18% per annum.

What is the total comprehensive income of the sales agency for the month of August? 5pts

Answer:
Sales 268,000.00
Sales discount 1,800.00
Net Sales 266,200.00
Less: COGS and Expenses
COGS 124,000.00
Salaries 21,600.00
Rent 3,000.00
Other expenses 17,925.00
Samples 6,120.00
Depreciation 600.00 173,245.00
Total comprehensive income 92,955.00
The following assets are sent to the agency:

at P268,000. Cost of sales to customers is P124,000.

submitted by the sales agency amounting to P17,925.

ve a salvage value of 15% of cost. Furniture is depreciated