On December 31, the Investment in Branch account on the home office books shows a balance of 150,000. The following facts are ascertained:

1. Merchandise billed at 5,000 is in transit on December 31, from the home office to the branch.

2. The branch collected a home office account receivable for 2,000. The branch did not notify the home office of cash collection.

3. On December 30, the home office mailed a check of 10,000 to the branch but the bookkeeper charged the check as general expense. The branch has not received the check as of December 31.

4. Branch profit for December was recorded by the home office at 8,900 instead of 9,800.

5. Branch returned supplies of 1,000 to the home office but the home office has not yet recorded the receipt of the supplies.

Required:

I. Compute the balance of the Home Office account on the branch books as of December 31 before its adjustment

II. Prepare a reconciliation statement to compute the adjusted balance on December 31