Question
Question 3: (10 points) A1, B1, C1, C3 On April 5, 2020, Gulf Company established the Zain Branch. Following are the initial transactions between the
Question 3: (10 points) A1, B1, C1, C3
On April 5, 2020, Gulf Company established the Zain Branch. Following are the initial transactions between the home office and Zain Branch:
April. | 10 | Home office sent $10,000 to the branch in cash. |
| 15 | Home office shipped merchandise costing $60,000 to the branch. |
| 25 | Branch acquired store fixtures for $15,000 cash and a note payable of $10,000; both the fixtures and the note payable will be carried in the accounting records of the home office. |
| 27 | Operating expenses incurred by the home office and charged to Zain Branch totaled $4,000. |
| 30 | The branch remitted (transfer) $40,500 cash to the company. |
Both the home office and the Zain Branch use the perpetual inventory system.
Instructions:
Prepare journal entries for the foregoing transactions in the accounting records of the Zain Branch and the Gulf Company.
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