Question
Plastic Products Corporation created a branch to market its plastic window signs for automobiles. The balance sheets of the home office and branch contained the
Plastic Products Corporation created a branch to market its plastic window signs for automobiles. The balance sheets of the home office and branch contained the following amounts on December 31, 19X6:
item
Home office
branch
cash
70,000.00
20,000.00
Account receivable
110,000.00
60,000.00
Inventory
200,000.00
68,000.00
Inventory-from office
32,000.00
land
50,000.00
70,000.00
Building and equipment
500,000.00
300,000.00
Less: accumulated depreciation
(240,000.00)
(120,000.00)
Investment in branch
305,000.00
Total asset
995,000.00
430,000.00
Account payable
53,000.00
25,000.00
Bond payable
300,000.00
Notes payable
100,000.00
Common stock
200,000.00
Retained earning
430,000.00
Home office
305,000.00
Unrealized intracompany profit
12,000.00
Total liabilities and equities
995,000.00
430,000.00
During the year, Plastic Products Corporation shipped $50,000 of inventory to the branch and billed it $80,000. The branch resold 60 percent of the inventory before the end of the period.
Required :
A.Give the eliminating entries needed to prepare balance sheet for Plastic Products Corporation as of December 31, 19X6.
B. Prepare December 31, 19X6, balance sheet for Plastic Products Corporation
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Fundamental Accounting Principles
Authors: John Wild, Ken Shaw, Barbara Chiappetta
19th Edition
0077303202, 9780077303204
