Question 3 (30 marks)

A- The following transactions occurred between the home office and the Mason Branch of Smaldino Company:

1. Cash of $1,000 was forwarded by the home office to Mason Branch.
2. Merchandise with a home office cost of $60,000 was shipped by the home office to

Mason Branch.

3. Equipment was acquired by Mason Branch for $500, to be carried in the home office accounting records.
4. Credit sales by Mason Branch amounted to $80,000; the branchs cost of the merchandise sold was $45,000.
5. Collections of trade accounts receivable by Mason Branch amounted to $62,000.
6. Payments for operating expenses by Mason Branch totaled $20,000.
7. Cash of $37,500 was remitted by Mason Branch to the home office.
8. Operating expenses incurred by the home office and charged to Mason Branch totaled $3,000.

Required:

Prepare journal entries for these transactions in the accounting records of the Home office and the Mason Branch. (17 marks)