$2.000 S. Ortegren Sales Company is located in Arlington, Texas. Its balance sheet accounts at the beginning of the year are as follows: Cash $ 20,000 Accounts Receivable 2.000 Inventory 41.000 Land Buildings and Equipment 90.000 Accumulated Depreciation $ 21.00 Accounts Payable 18.00 Notes Payable 30,000 Common Stock 100,000 Retained amnings 59.000 Total $228,000 $228.000 At the beginning of the year, the company establishes branches in Denton and Houston. The company uses a perpetual Inventory system. The following transactions occur during the year: A The home office purchases equipment on account for $40.000 and immediately transfers half to each of the two branches at cost. 2. The home office transfers cash of $3,000 to the Denton branch and $5,000 to the Houston branch. C. The company sells inventory to unrelated parties at a 40 percent gross profit and transfers Inventory to its branches at a 20 percent gross profit. During the year, the home office has sales of $175,000 to unrelated parties and transfers Inventory to the Denton branch at a $140,000 price and to the Houston branch at a $150,000 price. D. The branches sell their inventory all acquired from the home office at a 25 percent gross profit. During the year, the Denton branch has sales of $136,000, and the Houston branch has sales of $152,000. E. Operating expenses during the year, excluding cost of goods sold and depreciation, total $85,000 for the home office, $13,000 for the Denton branch, and $11,000 for the Houston branch. F. Selected balance sheet accounts at the end of the year are as follows: M Office Marco M Manh 511.000 1.000 Accounts Receivable Imety Pube Na Payable Nem apreciation $28.00 SI 2 MUKO NIKO $14.000 16 2000 40.000 400 . 47200 G. During the year, the Denton branch transfers $135,000 of cash to the home office and the Houston branch transfers $151,000 Required: A. Record the transactions for the year on the books of (1) the Denton branch, (2) the Houston branch, and (3) the home office (include recognition of branch income). B. Present a work paper with the appropriate eliminations for the preparation of annual financial statements for Ortegren Sales Company $2.000 S. Ortegren Sales Company is located in Arlington, Texas. Its balance sheet accounts at the beginning of the year are as follows: Cash $ 20,000 Accounts Receivable 2.000 Inventory 41.000 Land Buildings and Equipment 90.000 Accumulated Depreciation $ 21.00 Accounts Payable 18.00 Notes Payable 30,000 Common Stock 100,000 Retained amnings 59.000 Total $228,000 $228.000 At the beginning of the year, the company establishes branches in Denton and Houston. The company uses a perpetual Inventory system. The following transactions occur during the year: A The home office purchases equipment on account for $40.000 and immediately transfers half to each of the two branches at cost. 2. The home office transfers cash of $3,000 to the Denton branch and $5,000 to the Houston branch. C. The company sells inventory to unrelated parties at a 40 percent gross profit and transfers Inventory to its branches at a 20 percent gross profit. During the year, the home office has sales of $175,000 to unrelated parties and transfers Inventory to the Denton branch at a $140,000 price and to the Houston branch at a $150,000 price. D. The branches sell their inventory all acquired from the home office at a 25 percent gross profit. During the year, the Denton branch has sales of $136,000, and the Houston branch has sales of $152,000. E. Operating expenses during the year, excluding cost of goods sold and depreciation, total $85,000 for the home office, $13,000 for the Denton branch, and $11,000 for the Houston branch. F. Selected balance sheet accounts at the end of the year are as follows: M Office Marco M Manh 511.000 1.000 Accounts Receivable Imety Pube Na Payable Nem apreciation $28.00 SI 2 MUKO NIKO $14.000 16 2000 40.000 400 . 47200 G. During the year, the Denton branch transfers $135,000 of cash to the home office and the Houston branch transfers $151,000 Required: A. Record the transactions for the year on the books of (1) the Denton branch, (2) the Houston branch, and (3) the home office (include recognition of branch income). B. Present a work paper with the appropriate eliminations for the preparation of annual financial statements for Ortegren Sales Company
