3-2 Explain the procedure for incorporation of branch balance in head office books? 3-3 Solve: Cash Notes receivable Trade accounts receivable (net) Inventories Investment in branch. Furniture and equipment (net) Trade accounts payable Common stock, $2 par Retained earnings, Dec. 31, 2004 Dividends declared Home office Sales Cost of goods sold Operating expenses Totals SOLIS COMPANY Adjusted Trial Balances December 31, 2005 Home Office Branch Dr (Cr) $ 46,000 7,000 80,400 95,800 82,700 48,100 (41,000) (200,000) (25,000) 30,000 (394,000) 200,500 69,500 $-0- Dr (Cr) $ 14,600 37,300 24,200 (82,700) (101,100) 85,800 21,900 $-0- The physical inventories on December 31, 2005, were in agreement with the perpetual inventory records of the home office and the branch. Instructions a. Prepare a four-column working paper for combined financial statements of the home office and branch of Solis Company for the year ended December 31, 2005. b. Prepare closing entries on December 31, 2005, in the accounting records of the branch of Solis Company. c. Prepare adjusting and closing entries pertaining to branch operations on December 31, 2005, in the accounting records of the home office of Solis Company.