The following reciprocal ledger accounts were included in the accounting records of the home office and the Lee Branch of Kreshek Company on April 30, 2005. You have been retained by Kreshek to assist it with some accounting work preliminary to the preparation of financial statements for the quarter ended April 30, 2005. Additional Information 1. Branch equipment is carried in the accounting records of the home office; the home office notifies the branch periodically as to the amount of depreciation applicable to equipment used by the branch. Gains or losses on disposal of branch equipment are reported to the branch and included in the income statement of the branch. 2. Because of the error in recording the shipment from the home office on February 8 , 2005 , the sale of the 160 units has been debited improperly by the branch to cost of goods sold at $46.75 a unit. cownting for Partinerships and Branches 3. On April 30,2005, the branch collected trade accounts receivable of $350 belonging to the home office, but the branch employee who recorded the collection mistakenly treated the trade accounts receivable as belonging to the branch. 4. The branch accountant recorded the preliminary net income of $13,710 by a debit to Income Summary and a credit to Home Office, although the revenue and expense ledger accounts had not been closed. Instructions a. Reconcile the reciprocal ledger accounts of the home office and Lee Branch of Kreshek the home office, but the branch employee who recorded the collection mistakenly treated the trade accounts receivable as belonging to the branch. 4. The branch accountant recorded the preliminary net income of $13,710 by a debit to Income Summary and a credit to Home Office, although the revenue and expense ledger accounts had not been closed. Instructions a. Reconcile the reciprocal ledger accounts of the home office and Lee Branch of Kreshek Company to the correct balances on April 30, 2005. Use a four-column working paper (debit and credit columns for the Investment in Lee Branch account in the home office accounting records and debit and credit columns for the Home Office account in the branch accounting records). Start with the unadjusted balances on April 30, 2005, and work to corrected balances, including explanations of all adjusting or correcting items. b. Prepare journal entries for Lee Branch of Kreshek Company on April 30, 2005, to bring its accounting records up to date, assuming that corrections still may be made to revenue and expense ledger accounts. The branch uses the perpetual inventory system. Do not prepare closing entries. c. Prepare journal entries for the home office of Kreshek Company on April 30, 2005, to bring its accounting records up to date. The home office uses the perpetual inventory system and has not prepared closing entries. Do not prepare closing entries