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2:10 M . 12 0.15 KB/S ull Wil (39 MIDTERM PRE 7.pdf . . . MIDTERM EXAMINATION 1ST SEMESTER 2020-2021 NAME: NOVEMBER 24, 2020 YEAR AND SET: Instructions: Answer the following questions with solutions and answer it in a separate sheet. (10 points each) Comparative trial balances of the home office of HOH Corporation and its two branches at December 31, 2018 were as follows: Home Office CHI Branch MIN Branch Cash P5,000 P15,000 P22,000 Accounts Receivable 80,000 30,000 40,000 Inventories 150,000 60,000 48,000 CHI Branch 170,000 MIN Branch 165,000 Plant assets 730,000 250,000 200,000 Purchases 900,000 Shipments from home office 300,000 240,000 Expenses 300,000 75,000 50,000 Totals P2,500,000 P730,000 P600,000 Accounts payable P100,000 P45,000 P30,000 Other liabilities 80,000 15,000 5,000 Loading in branch inventories 108,000 Share capital, P10 par 500,000 Retained earnings 262,000 Home office 170,000 165,000 Sales 1,000,000 500,000 400,000 Shipments to branches 450,000 Totals P2,500,000 P730,000 P600,000 Additional Information: Home Office and branch inventories at December 31, 2018 were: Home Office P120,000 CHI Branch (at billed prices) P72,000 MIN Branch (at billed prices) 96,000 1. How much net income will HOH Corporation report for year-ended 2018? a. P260,000 c. P220,000 b. P122,000 d. P595,000 CDO ENTERPRISES operates a branch in ILIGAN CITY. At the close of business on December 31, 2018, the ILIGAN CITY branch account in the home office books showed a debit balance of P200,000. The inter-office accounts were in agreement at the beginning of the year. For purposes of reconciling the inter-office accounts, the following facts were ascertained: a. A machinery costing the home office P17,500 was picked up by the branch as P1,750 + P15,750 b. The branch did not take up insurance premium of P2,000 charged by the home office. c. Freight charge on merchandise made by the home office fir P9,800 was recorded in the branch books as P8,900 + P900 d. Home office credit memo representing a discount on merchandise for P1,500 was taken up twice by the branch. e. The branch failed to take up a P2,000 debit memo from the home office representing the share of the branch in advertising f. A remittance of P15,000 from the BUKIDNON branch was inadvertently taken up in the ILIGAN CITY branch account but was corrected before yearned g. The home office inadvertently recorded a remittance for P13,500 from its BUTUAN CITY branch as a remittance from its ILIGAN CITY branch. 2. Determine the balance in the branch books of the Home Office account (before adjustment) as of December 31, 2018. a. P191,350 c. P198,350 b. P164,350 d. P209,350 On May 1, 2018, the Home Office in BACOLOD CITY establishes a sales agency in SILAY CITY. The following assets are sent to the sales agency on that date: Cash (for the following fund to be operated under the imprest system) P100,000 Merchandise samples 240,000 During the month, the sales agency submits sales on account of P1,500,000 which was duly approved by the home office. Cost of merchandise shipped to fill the orders from customers obtained by the sales agency is P800,000. Home office disbursements chargeable to the agency are as follows: Furniture and fixtures, P150,000; manager's and salesmen's salaries, P88,000 and rent P35,000. On May 31, the sales agency working fund is replenished: paid P42,000. Sales agency samples are useful until December 31, 2018, which at that time, are believed to have a salvage value of 15% of cost. Furniture are depreciated at 30% per annum. 3. What is the net profit of the SILAY CITY AGENCY for the month of May 2018? a. P327,250 c. P463,750 b. P315,250 d. P505,750 O