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Hello kindly help me answer these problems about Home Office and Branch Accounting. Kindly provide clear solutions for each. Thank you. 5. Crest Corporation established
Hello kindly help me answer these problems about Home Office and Branch Accounting. Kindly provide clear solutions for each. Thank you.
5. Crest Corporation established its Poblacion branch in 2019. Merchandise costing P120,000 is shipped to this branch. During the initial year, the home office acquires an equipment for P80,000 to be carried in the branch books, and the branch maintains physical possession and use. The equipment has a useful life of 4 years. The branch sells 60 percent of the inventory for P100,800 on account and subsequently collected half of the amount. The branch remits 80 percent in cash to the Home Office. What is the correct Home Office account balance on the records of the branch? * 6. On January 01, 2020 Kit Company, Inc. establishes a branch in Bayang. During the year, Kit Inc. transfers cash and merchandise to the branch worth P15,000 and P45,000 respectively. Freight was paid by the home office worth P1,500 included in the cost of merchandise. The home office also incurred P5,700 expenses of which 30 percent was allocated to the branch. On December 31, 2020, the branch incurred a loss of P4,000. What is the balance of the branch account as per home office books * 7. The home office ships merchandise to the branch at 25 percent above cost. At what amount should the Home Office account be credited if merchandise costing P120,000 will be shipped? * 8. Mary Corporation has a branch in Caloocan. During 2021, the home office shipped to the branch supplies costing P156,000 at a billed price of 30% above cost. The inventories of supplies at the branch were as follows: January 1, 2021 P110,000; December 31, 2021 128,000. On December 31, 2021, the home office holds inventories of P112,800 which includes P11,500 held on consignment and which excludes P5,000 inventories out on consignment. How much is the inventories in a combined balanced sheet as of December 31, 2021? *Use the following information for items 9-11: Main Corporation has operated a branch in Cavite for one year. Shipments are billed to the branch at cost. The branch carries its own accounts receivable, makes its own collections, and pays its own expenses. The branch reported an inventory on December 31, 2021: Outsiders, P3,391; Home office, P7,625 The transactions for the year are given effect to in the trial balance below: (see image) . Determine the net profit of the Cavite Branch for 2021. * Accounts Debit Credit Cash . . . . . . .. ..................... .; P 5,040 Home Office Current . ......! ! !! !!!! ! ! ! P 21,000 Purchases from outsiders ....... ... ..... .! ! ! ! 25,000 Shipments from Home Office . . . . . 56.216 Accounts receivable . .. . . . . 15,360 Expenses . . . . . . . . . . 7,500 Interest expense. .. . . . . . . . 684 Gain on sale of equipment. . 8,800 Sales . .. . . . . . . . ....... 80,000 P109.800 P109.800 10. Using the same information above, determine the branch current account in the Home Office books on January 1, 2022.* 11. Using the same information above, shipments to Branch account in the Home Office books on January 1, 2022Step by Step Solution
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