The Home Office bills its Durian Branch for merchandise at 140% of the cost. At the end of January 2022, the branch reported the following merchandise at a billed price from the home office.: Beginning inventory at P8,400 and Ending inventory at P7,560. Shipments received amounted to P28,280. How much is the balance of the allowance for overvaluation before adjustment? 8,320 8,080 10,480 the a 2,400
On July 1, 2020, Dreamy purchased inventory from a foreign supplier for 30,000 foreign currency, payable in 60 days. On July 1, 1FC = P0.6610, and by the day of settlement on September 1, 1FC = P0.6256. The 60-day forward rate on July 1 is 1FC = P0.6498. Lokal should record the cost of the inventory at: P19,131 P19,830 P18,768 P19.494
Carlos Branch was billed by the Home Office at 20% above cost. It reported the following: Merchandise from Home Office at billed price = 84,000 Returns by branch to HO for damaged goods = 1,680 Ending Inventory = 33,600 Net loss = (5,200) in Gross profit of the branch as far as the HO is concerned? Ending inventory of the branch at cost?
If the Home Office pays for the shipping fee of the merchandise sent to the branch, which of the following entries will not be made? Credit Cash by the Home Office Debit Shipments from Home Office by the Branch Debit Investment in Branch by the Home Office Debit Freight In by the Home Office
The home office shipped merchandise to its branch billed at P150,000 including a mark-up of 20% on cost. The branch reports opening and closing inventories of P90,000 and P120,000, respectively. The home office has closing inventories of P220,000 which includes merchandise held on consignment valued at P10,000. What closing inventory would be reported in the combined statement of income for the year using periodic inventory system? P310,000 P330,000 P340,000 P300,000
After a transaction denominated in foreign currency occurs, what should be recognized in the Philippine company's records as a result of the change in the foreign currency exchange rate? Exchange losses and gains Foreign currency option Foreign currency forward contract Settlement date
Assuming that the retained earnings of the subsidiary on December 31, 2021, translated to the Philippine Peso is P200,000, what amount of cumulative translation adjustment is to be reported as other comprehensive income 22,000 P25,000 P37,000 Answer not given
On February 1, 2022, Manila Corp. received an order for equipment from a foreigner for 120,000 local currency units (LCU) when the peso equivalent was P86,000. Manila shipped the equipment on March 15, 2022 and billed the customer for 120,000 LCU when the peso was P91,000 Manila received the customer's remittance in full on April 15, 2022 and sold the 120,000 LCU for P95,000. The foreign exchange transaction gain for this transaction is 9,000 5,000 0 4,000
All of the following are true about derivatives, except Derivatives are measured at fair values Derivatives are settled at a future date An increase in share price will result to a decrease in the value of an option Derivatives do not require initial net investment
Which of the following statements is true? The Home Office Account indicates the extent of accountability of the branch to the home office. Transfer of merchandise between a home office and a branch is recorded similarly to transfer of other assets. Both statements are true Both statements are false
Peter Corporation has 25% equity investment in Durian Company based in Italy. On December 31, 2020, the year-end exchange rate was one peso to PO.015 to a Euro. On this date, Peter has no translation adjustment balance pertaining to its investment. To hedge its net investment in Durian, Peter borrows 4,000 Euros for one year at 10% interest on January 1 2021 at a spot rate of 0.017 Euro to a peso. Assume that on November 5, 2021, Durian declares and pays a 1,000 dividend in Euros, when the spot rate is P52.50 per Euro. On December 31, Durian reports a net income of 30,000 EU. The closing exchange rate on December 31 is P53. Dividends received from Durian will be recorded as What are the accounts affected by the above transactions and by how much?
On November 1 , 2021, Abu Sayaf purchased inventory at 400,000FCU from a foreign supplier to be settled on March 1. On the same date, it entered into a forward contract to hedge the exposed liability. The forward rate is PO 90 per unit of foreign currency. Spot rates on November 1is at PO.93, December 31 at PO.91 and March 1 at P0.94. What will be the adjusted balance in the Acceptance Payable account on December 31? How much gain or loss was recorded as a result of the adjustment on December 31?
On April 10, 2022 Proof entered into a foreign exchange forward contract to purchase 200,000 FCU on June 10, 2022 to hedge a purchase of inventory last February 10, 2022. What amount of forex gain (loss) from this forward contract should be recognized on June 10, 2022? Select the correct response: 4,000 gain 2,000 loss no gain or loss 6,000 loss
Which of the following fi not included in the computation of Cost of Goods identified with HO Sales will result to an overstatement of COGS? Beginning Inventory Purchases Shipments to Agency Answer not given
The realized profit on merchandise sold by the branch is P5,000. Ending inventory was P10,000 wherein P2,500 is from supplier. The HO billed the branch at 125% of cost. Closing entries will include Debit Merchandise Inventory Ending P7,500 Credit Purchases P2,500 Debit to Allowance for Overvaluation of Branch Inventory of P5,000 Debit to Allowance for Overvaluation of Branch Inventory of P1,000
What amount of forex gain (loss) from this forward contract should be recognized on June 10, 2022? 4,000 gain 2,000 loss no gain or loss 6,000 loss
Dream Corporation shipped merchandise worth P95,000 to its Molo branch at cost. Molo has sales of P120,000 and operating expenses of P20,000. Home Office Current has a balance of P40,000 and ending inventory of P38,000. What is the correct balance of the Branch Current account in the books of the home office? 103,000 65,000 40,000 83,000
Julio Corp ships Jose Branch merchandise costingP120,000.75% of these were sold by the branch for P141,000 Operating expenses of the branch amounted to P27,000. How much total comprehensive income will the branch report if merchandise is billed by HO to branch at 125%? 6,000 1,200 24,000 1,500
Which of the following statements is false? When inventory is received from the home office, a branch increases its home office account Shipments to branch is added to the home office's purchases account in determining the cost of goods sold Both are true Both are false
Exposure of changes in cash flows attributable to certain risks associated with a recognized asset or liability Cash flow hedge Fair value hedge Foreign currency hedge Answer not given
Avocado Co. has a sales agency in Cebu in which a separate account is maintained. The home office paid P5,000 for the rental on behalf of the agency. Which of the following will be part of the entries of the Home Office? Debit to Accounts Receivable - Cebu Agency No entry Debit to Cebu Agency Debit to Rent Expense - Cebu Agency
MM has the following expenses stated in Foreign Currency: Depreciation of 120,000 for asset acquired in January 2022; doubtful accounts expense of 80,000 and rent expense of 200,000. The exchange rates at various dates were as follows: January 2022 at P0.40, December 2022 at P0.50, and average for year ended December 2022 is P0.44. What total peso amount should be included in MM's 2022 consolidated statement of Cl to reflect the expenses? P68,000 P60,000 P183,200 P176,000
The Branch Current account in the home office books had a debit balance of P430,000 at December 31, 2020. The reciprocal accounts were equal at the beginning of the year. Determine the unadjusted balance of the Home Office account in the branch's books at December 31, 2020 given the following a. The branch has not taken up its share of P9,000 for advertising expense. b. Merchandise shipped by HO at P3,600 was taken by the branch at P3,000 c. The home office erroneously recorded as remittance of P5,500 from V Branch when it was from JK Branch. 424,500 435,000 425,900 414,900
On March 1, 2022, Jay purchased merchandise worth 100,000 foreign currencies from its foreign supplier payable within 30 days. Jay note on March 31. The following are the spot rates: Obi's foreign exchange gain or loss on the transaction is: P12,000 P9,000 P6,000 P1,680
On Dec.3 1 ,2021,the Home Office Account in ZL Branch has a balance of P75,000.The differences with the HO current account in ZL Branch may be due to: 1. Home office inventory shipment to the branch on December 20 recorded by the branch in January, 2022 at cost of P30,000 2. Inventory costing P45,000 was sent to the branch by the home office on December 27. The billing was at cost, but the branch recorded the transaction at P48,200. 3. P8,000 branch remittance to the home office in December was recorded on the HO books on January 2022 4. P12,500 marketing expenses incurred by the home office of which P5,000 is allocated to the branch. The branch has not recorded this transaction. What is the reconciled amount of the Home Office and Investment in Branch Accounts? 114,800 106,800 61,800 113,200
An exchange rate of P1 to 25 Japan Yen Means that each yen is worth 25 peso Implies that the peso has strengthened against the yen Implies that the yen has strengthened against the peso Can also be expressed P0.04 to 1 Japan yen