Question
MMM Company has established a branch in Tacloban be sending goods costing P184,900 and P80,000 in cash on July 1, 2020. Home office initiated transactions
MMM Company has established a branch in Tacloban be sending goods costing P184,900 and P80,000 in cash on July 1, 2020. Home office initiated transactions for the remainder of the year is found below. At the end of the year, the company's controller has found out that the accounting staff assigned in recording the transactions between the home office and the branches had failed to record all the transactions initiated by the branch. Because of this, there is a significant discrepancy between the balances of the reciprocal accounts.
- The home office acquired computer equipment amounting to P420,000 for the branch on August 1, 2020. As per agreement, the branch will keep all the property, plant and equipment records
- Goods costing P320,000 were shipped from the home office to branch on November 9,2020
- Additional cash amounting to P53,000was transferred to the branch on 12-2-20
- A branch customer has incorrectly paid P25,000 cash to the home office on 12-16-20
- The home office incurred P65,000 of advertising cost and P96,000 of salaries. Tacloban branch is to shoulder 30% and 20% of these expenses respectively
For the purpose of reconciling the reciprocal accounts, the controller has instructed the branch accountant to send a copy of the Home office current general ledger to the home office
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