CHAPTER 12 MULTIPLE MUL TIPLE CHOICE 12-1:
d. This is recorded when the the working fund is replenished. replenished.
12-2:
c.
Sales Cost of goods sold: Purchases Merchandise inventor, end $ross profit %&penses Net income (loss) 12-3:
P800,000 !80,000
"#0,000 P 80,000 !'8,000 P (!!8,000)
b
Sales Cost of goods sold (P70,000 * !+0) $ross profit ess: Sa Sa/ples (P8,000 P",000) %&penses Net income 12-4:
P 700,000
P
70,000 -0,000 P #0,000 P #,000 #,800 P
+,800 15,200
a
Sales Cost of goods sold $ross profit %&penses (P',000 1 P+,-00) Net income 12-5:
a
12-6:
a
12-7:
c
12.8
a
Ship/ent of /erchandise to ho/e office %3uip/ent sent to ho/e office %&penses assigned to 4ranch 4 the ho/e office Cash re/ittance to ho/e office Home office account balance balance
P !00,000 7#,000 P #8,000 !2,-00 P !+,-00
P 80,000 -0,000 8,000 (+0,000) P '8,000
!
12-9:
d
12-10: a
5o/e 6ffice account 4alance 4efore closing, ec. 2#, !008 P 2-,000 et inco/e (loss) Sales P!+7,000 Cost of cost goods sold Ship/ent to 4ranch P!2-,000 9nventor, !#*2! !8,-00 !!",-00 $ross profit P 20,-00 %&penses !2,-00 !7,000 5o/e 6ffice account 4alance (Investment in Branch account balance ) P -#,000 Ship/ent to ranch account has no 4eginning 4alance, 4ecause this was closed at the end of #008. 12-11: b
Pett cash fund ;ccounts receiva4le 9nventor Home Office account balance
Jan. 1, 2008 P ",000 8",000 7+,000 P166,000
Jan. 1, 2009 P ",000 '8,000 8#,000 P186,000
12-12: d
e/ittance in transit Ship/ent in transit Cash collections of ho/e office A!uste balances, "ec# $1
(!a"c# $$%&' Home Office P #!,2#0
7,#80 ( +00) P %8,%00
(H$) O**+c) $$%&' Investment in Branch P 28,"00 (!0,+00)
P %8,%00
12-13: a
P+20,000 (-,-00) ( "00) (',000) P1 ,*00
#
12-14: a
4 4ranch %rror in recording of 4ranch profit >eturns of /erchandise in transit A!uste balances, 1%$1
(!a"c# $$%&' (H$) O**+c) $$%&' Home Office Investment in Branch P '7,2-0 P 8+,000 ",!-0 #-,000 '00 ( ",+00) P10$,+00 P10$,+00
12-15: a
(!a"c# $$%&' Home Office collected 4 ho/e office Merchandise returns in transit ( !,#00) %rror in recording 4ranch profit ( 2,"00) A!uste balances P%$,+0
(H$) O**+c) $$%&' Investment in Branch P#7,2-0
(2,000)
P%$,+0
12-16: c e/ittance in transit Ship/ent in transit %&penses allocated %rror in recording re/ittance %rror in recording ship/ents &na!uste balance ' Home Office account
e/ittance in transit Ship/ent in transit %&penses allocated %rror in recording ship/ents A!uste balances 12.17
P 8-,000 (!0,000) (#0,000) ( -,000) 2,000 ( ',000) P ,000
( !a"c# $$%&' Home Office P ++,000
(H$)O**+c) $$%&' Investment in Branch P 8-,000 (!0,000)
#0,000 -,000 (2,000) ',000 P 7-,000
P 7-,000
(!a"c# $$%&' Home Office
(H$) O**+c) $$%&' Investment in
a
Branch
collected 4 5o/e 6ffice Ship/ents in transit ;c3uisition of furniture Merchandise returns Cash re/ittance in transit
P ++0,000 ( 8,000) 2#,000
P +'",000
(!#,000) (!-,000) ( -,000)
2
A!uste balances
P 6,000
P 6,000
PROLEM, P!$b) 12-1 H$) O**+c) $$%&
1. Investment in branch Cash
30,000
2. Investment in branch !hi"ment to branch
5,000
!a"c# $$%&
Cash 30,000
5,000
3. #o entr$
(. #o entr$
5. !hi"ment to branch Investment in branch
30,000 Home office
30,000
!hi"ment from home office Home office
5,000
P%rchases &cco%nts "a$ab'e
10,000
5,000
10,000
&cco%nts receivab'e !a'es 2,000 2,000
). #o entr$
125,000 125,000
Home office 2,000 !hi"ment from home office Cash
105,000 &cco%nts receivab'e
. #o entr$
9. Investment in branch &cc%m%'ate e"/n
10. Cash Investment in branch
105,000
&cco%nts "a$ab'e ,000
8. #o entr$
,000 Cash
!a'aries >ent *ti'ities Other o"eratin+ e"enses 29,500 ,500 ,500
)5,000
2,000
10,000 -,000 2,000 12,000 Cash
-e"reciation ent Ins%rance Home office
1,500 5,000 1,000 ,500
Home office
)5,000
)5,000
Cash )5,000
11. Cash
3,000 Investment in branch
12. Investment in branch Branch income
3,000 10,000 10,000
Home office &cco%nts receivab'e !a'es Inventor$, en
3,000
125,000 5,000 !hi"ment from
3,000
HO
3,000
+
P%rchases
10,000 !a'aries
10,000 ent *ti'ities
10,000 2,000 Other o"eratin+ e"enses
12,500 Home office
10,000
Pro4le/ !#?# a.
$$%& $* #) !a"c#
1.
2.
3.
Cash erchanise inventor$ Home office
200,000 350,000
erchanise inventor$ &cco%nts "a$ab'e
(00,000
&cco%nts receivab'e !a'es
)50,000
Cost of +oos so' erchanise inventor$
(25,000
Cash
)00,000
550,000
(00,000
)50,000
(25,000
&cco%nts receivab'e (.
5.
b.
&vertisin+ e"ense !a'es commission Other e"ense Cash &cco%nts "a$ab'e Home office Cash
(0,000 )5,000 (5,000 150,000 30,000 120,000 (90,000
Ma"+a ,a)& / aa !a"c# I"c$) ,a))" )a! E"d)d )c)b)! 31 2008
Sales Cost of goods sold $ross profit %&penses: ;dvertising e&pense Sales co//issions 6ther e&penses et inco/e c.
)00,000
P"-0,000 +#-,000 ##-,000 P+0,000 "-,000 +-,000
!-0,000 P 7-,000
Ma"+a ,a)& / aa !a"c#
-
aa"c) ,#)) )c)b)! 31 2008
Cash ;ccounts receiva4le Merchandise inventor Total assets
P!"0,000 -0,000 2#-,000 P-2-,000
;ccounts paa4le 5o/e office
P
20,000 -0-,000
Total lia4ilities and capital
P-2-,000
Pro4le/ !#?2 H$) O**+c) $$%&
!a"c# $$%& (1' A!ustin- .ntries
a. 9nvest/ent in 4ranch Cash
"2,7-0
b. 9nvest/ent in 4ranch Ship/ent to 4ranch
7-,200
c. ;ccounts receiva4le Sales
!-7,-00
d. Purchases ;ccounts paa4le
!82,7-0
). Cash
!70,+00
Cash "2,7-0
5o/e office Ship/ent fro/ 56 5o/e office
7-,200
72,200
'',000
!-7,-00
;ccounts receiva4le Sales
!82,7-0
Purchases 22,7-0 ;ccounts paa4le 22,7-0 Cash
;ccounts receiva4le
*. ;ccounts paa4le Cash . %&penses Cash
@urniture A fi&tures 4ranch 9nvest/ent in 4ranch #. Cash
"2,7-0
!70,+00
!8",000 !8",000 2','00
7-,200
'',000
80,!00 ;ccounts receiva4le
5o/e office Cash
80,!00
;ccounts paa4le Cash
!8,27-
80,!00
80,!00
!8,27-
? 2','00
!#,000 !#,000 80,!00
9nvest/ent in 4ranch
5o/e office Cash
!#,000 !#,000
? 80,!00 %&penses Cash
+. >etained earnings Cash
"2,7-0
#7,000 #7,000
!-,000 !-.000
(%) A!ustin- .ntries . %&penses ;cc. epreciation
!,7-0 !,7-0
"
% . 9nvest/ent in 4ranch ;cc. epBn r. @ A @
'7-
. Prepaid e&penses %&penses
27-
. %&penses ;ccrued e&penses
!-0
'7-
%&penses 5o/e office
'7-
27-
Prepaid e&penses %&penses
!-0
%&penses ;ccrued e&penses
'7!,!#!,!#+-0 +-0
/losin- .ntries H$) O**+c) $$%& ". Sales Ship/ents to 4ranch Merchandise inv., !#*2! Merchandise inv. !*! Purchases %&penses 9nco/e su//ar
!-7,-00 7-,200 7#,7-0
o. ranch loss 9nvest/ent in 4ranch
#,!00
. 9nco/e su//ar ranch loss
#,!00
. 9nco/e su//ar >etained earnings
3.
!a"c# $$%&
"0,!80 !82,7-0 +!,++#0,!7-
#,!00
Sales '',000 Merchandise inv., !#*2! 2-,#-0 9nco/e su//ar #,!00 Purchases 22,7-0 Ship/ent fro/ 56 7-,200 %&penses #7,200
5o/e office #,!00 9nco/e su//ar
#,!00
#,!00 !8,07!8,07-
Iniviual inancial tatements C)b C$a" / H$) O**+c) I"c$) ,a))" )a! E"d)d )c)b)! 31 2008
Sales Cost of sales Merchandise inventor, !*! Purchases $oods availa4le for sale Ship/ent to 4ranch $oods availa4le for own sale Merchandise inventor, !#*2! $ross profit %&penses et operating inco/e ranch inco/e (loss) et inco/e
P!-7,-00 P "0,!80 !82,7-0 P#+2,'20 ( 7-,200) P!"8,"20 ( 7#,7-0)
'-,880 P "!,"#0 +!,++P #0,!7( #,!00) P !8,07-
C)b C$a" / !a"c# I"c$) ,a))" )a! E"d)d )c)b)! 31 2008
Sales
P '',000
7
Cost of sales Purchases Ship/ents fro/ ho/e office $oods availa4le for sale Merchandise inventor, !#*2! $ross profit %&penses et inco/e (loss)
P 22,7-0 7-,200 P!0',0-0 2-,#-0
72,800 P #-,#00 #7,200 P( #,!00)
C)b C$a" / H$) O**+c) aa"c) ,#)) )c)b)! 31 2008 Assets Cash ;ccounts receiva4le Merchandise inventor, !#*2! Prepaid e&penses @urniture and fi&tures ess: ;ccu/ulated depreciation ranch furniture and fi&tures ess: ;ccu/ulated depreciation 9nvest/ent in 4ranch Total assets 2iabilities an toc3holers4 .5uit iabi'ities ;ccrued e&penses ;ccounts paa4le Total lia4ilities !tocho'ers/ 4%it$ Capital stock >etained earnings Total lia4ilities and stockholdersB e3uit
P 2+,800 #8,-77#,7-0 2,07P20,000 8,270
#!,"20 P!#,000
'7-
!!,0#+-,8#P#!7,"80
P
#,0#2!,'-0 P 22,'7P 7-,000 !08,70-
!82,70P#!7,"80
C)b C$a" / !a"c# aa"c) ,#)) )c)b)! 31 2008 Assets Cash ;ccounts receiva4le Merchandise inventor, !#*2! Prepaid e&penses Total assets
P ",27!8,000 2-,#-0 !,!#P"!,"-0
2iabilities an /a7ital ;ccounts paa4le 5o/e office Total lia4ilities and capital
P +-0 !-,27P"!,"-0
8
#
/ombine inancial tatements C)b C$a" C$b+")d I"c$) ,a))" )a! E"d)d )c)b)! 31 2008
Sales Cost of sales Merchandise inventor, !*! Purchases $oods availa4le for sale Merchandise inventor, !#*2! $ross profit %&penses Co/4ined net inco/e
P#-",-00 P "0,!80 #!7,-00 P#77,"80 !08,000
!"',"80 P 8",8#0 "8,7+P !8,07-
C)b C$a" aa"c) ,#)) )c)b)! 31 2008
Assets Cash ;ccounts receiva4le Merchandise inventor Prepaid e&penses @urniture and fi&tures ess: accu/ulated depreciation Total assets
P +!,!7+7,+7!08,000 +,#00 P+#,000 ',2+-
2iabilities and StockholdersB %3uit ;ccrued e&penses ;ccounts paa4le Capital stock >etained earnings Total lia4ilities and stockholdersB e3uit
2#,"-P#22,-0-
P
#,+7+7,2#7-,000 !08,70P#22,-0-
P!$b) 12-4 !a"c# $$%&
H$) O**+c) $$%& (a' a"d (b' /losin- .ntries
Sales !+-,000 9nventor, !#*2! "0,000 9nventor, !*! Ship/ents fro/ 56 %&penses 9nco/e su//ar
!8,000 !+-,000 #0,000 #2,000
Sales -"0,000 9nventor, !#*2! '0,000 Ship/ents to 4ranch !+-,000 9nventor, !*! Purchases %&penses 9nco/e su//ar
+-,000 -+0,000 '0,000 !#0,000
'
9nco/e su//ar 5o/e office
##,000
9nvest/ent in 4ranch ranch inco/e
##,000
##,000 ##,000
ranch inco/e ##,000 9nco/e su//ar ##,000 9nco/e su//ar !+#,000 >etained earnings !+#,000
C; C$!$!a+$" C$b+")d ,a))" <$!%+" Pa)! )a! E"d)d )c)b)! 31 2008
Home Office )b+& Cash ;ccounts receiva4le 9nventor, !*! 9nvest/ent in 4ranch %3uip/ent (net) Purchases Ship/ents fro/ 56 %&penses Total de4its
2",000 -+,000 +-,000 70,000 '-,000 -+0,000 '0,000 '20,000
Branch
%li/inations "ebit
/reit
7,000 #',000 !8,000
Income tatement "r (/r)
+2,000 82,000 "2,000 (#) 70,000 '-,000 -+0,000
!+-,000 #0,000 #!',000
(!)!+-,000 !!0,000
9nventor !#*2! (S) Total assets C!)d+& ;ccounts paa4le 5o/e 6ffice Capital stock >etained earnings, !*! Sales Ship/ents to 4ranch Total credits
9nventor, !#*2! (9S)
!-0,000 27!,000
#7,000
+,000 70,000
-+,000 !++,000 -"0,000 !+-,000 '20,000
#!',000
'0,000
"0,000
2!,000 (#) 70,000 -+,000 !++,000
!+-,000
(70-,000) (!)!+-,000
(!-0,000) #!-,000
et inco/e Total lia4ilities A e3uit 1. 2.
Balance heet
#!-,000 !+#,000
!+#,000 27!,000
6o e'iminate shi"ments to branch an shi"ments from HO 6o e'iminate reci"roca' acco%nts.
!0
Pro4le/ !#?(1'
O!$ C$a" <$!%+" Pa)! *$! C$b+")d ,a))"& )a! E"d)d )c)b)! 31 2008
Income
5o/e
%li/inations
State/ents
alance Office
Branch
)b+& Cash otes receiva4le ;ccounts receiva4le (net) 9nventories @urniture A fi&tures (net) 9nvest/ent in ranch Cost of goods sold 6perating e&penses
"2,000 !0,-00 !#0,"00 !+2,700 7#,!-0 !#+,0-0 200,7-0 !0+,#-0
!#8,700 2#,8-0
Totals
'2',000
#7-,700
C!)d+& ;ccounts paa4le Co//on stock >etained earnings 5o/e 6ffice Sales
-+0,000
Totals
'2',000
"ebit
/reit
"r (/)
#!,'00 --,'-0 2",200
heet
8+,'00 !0,-00 !7",--0 +-,000 7#,!-0
(#)!2-,000 (!)!#+,0-0 (#)!2-,000
-"+,0-0 !27,!00 28',!00
"!,-00 200,000 27,-00
"!,-00 200,000 27,-00 !#+,0-0 !-!,"-0 #7-,700
et 9nco/e
(!)!#+,0-0 ("'!,"-0) #8',0-0
#8',0-0 ','00
(','00) 28',!00
(!) To eli/inate ship/ents (#) To eli/inate reciprocal accounts.
/losin- .ntries 2.
!a"c# $$%&
Sales 9nco/e Su//ar Cost of goods sold 6perating e&penses
3. H$) O**+c) $$%& !-!,"-0 ','00 !#8,700 2#,8-0
!!
5o/e 6ffice 9nco/e su//ar
','00 ','00
ranch loss ','00 9nvest/ent in ranch
','00
9nco/e su//ar ranch loss
','00
','00
Pro4le/ !#?" a.
b.
Investment in Branch account (Home Office Boo3s)
P!28,#00 ( +-,000) ( !-,000) ",000 P 8+,#00
Home Office account (Branch Boo3s)
P('2,000) ( #00) !#,000 ( 2,000) P(8+,#00)
A!ustin- .ntries Home Office Boo3s
Branch Boo3s
6ther inco/e 9nvest/ent in 4ranch >iDal
+-,000
Cash
!-,000
#00 #00
+-,000
9nvest/ent in 4ranch? >iDal 9nvest/ent in 4ranch ;ccu/ulated depBn
Salar e&pense 5o/e office
5o/e office Ship/ents fro/ 56
!#,000 !#,000
!-,000 ",000
epreciation e&pense ",000 5o/e office
2,000 2,000
Pro4le/ !#?7 a.
Investment in Branch account (Home Office Boo3s)
P!"",+00 (20,000) (!#,000) P!#+,+00
Home Office account (Branch Boo3s)
P!02,#00 7,#00
!#
Ship/ent in transit Supplies charged to 4ranch Collection of 4ranch receiva4le ;d=usted 4alance, ec. 2!
b.
#+,000 8,000 ( !8,000) P!#+,+00
A!ustin- .ntries H$) O**+c) $$%& Cash 20,000 Ship/ent to 4ranch !#,000 9nvest/ent in 4ranch +#,000
!a"c# $$%& Ship/ent fro/ 56 #+,000 Supplies 8,000 %&penses 7,#00 ;ccounts receiva4le !8,000 5o/e office #!,#00
Pro4le/ !#?8 (1'
econciliation tatement
(H$) O**+c) $$%&' (!a"c# $$%&' Investment in Branch Home Office collected 4 4ranch Ship/ent in transit %rror in recording receipt of /erchandise e/ittance in transit, !*2! (2'
P-',7#0
P +2,#"8 +80
"00 ( ( +2#) (!#,800) P+7,088
!80)
P +7,088
Ad&+" E"!+)& H$) O**+c) $$%& >etained earnings Cash ;ccounts receiva4le 9nvest/ent in 4ranch
!a"c# $$%& +2# !#,800
;dvertising +80 Ship/ents fro/ 56 2,-#0 "00 Ship/ent fro/ 56 !#,"2# 5o/e office
!80 2,8#0
Pro4le/ !#?' (1'
!a"c# $$%& A!ustin- .ntries
Ship/ent fro/ ho/e office 6perating e&penses (P+,#00 1 P2,'00) 5o/e office
-7,"00 8,!00 "-,700
/losin- .ntries
Sales 9nventor, !#*2! (P"+,-80 1 P-7,"00) 9nventor, !*! Ship/ent fro/ 56 (P"#2,#00 1 P-7,"00) 6perating e&penses 9nco/e su//ar
778,#00 !##,!80 +7,800 "80,800 -+,7'0 !!",''0
!2
9nco/e su//ar 5o/e office
(2'
!!",''0 !!",'00
H$) O**+c) $$%&
;ccounts receiva4le 9nvest/ent in 4ranch Cash (P#0,000 1 P!',#00) 9nvest/ent in 4ranch ranch inco/e (3'
+70 220 800 !!",''0 !!",'00
R)c$"c++a+$" ,a))"
H$) O**+c) $$%& !a"c# $$%& ( Investment in Branch) (Home Office) P #0",2++ P !+0,'7+ #0,000 -7,"00 8,!00 !!",''0 !!",''0 ( +70) ( !',#00) P 2#2,""+ P 2#2,""+
Pro4le/ !#?!!!! a.
P #,000 Sales (P #7,000 1 P 22,000 1 P #",000) EEEEEEE. Cost of $oods Sold (P 2",000 1 P !8,000) EEEEEE. $ross Profit EEEEEEEEEEEEEEEEEE >ent %&pense EEEEEEEEEEEEEEEEE.. Propert Ta& %&pense EEEEEEEEEEEEEE epreciation %&pense EEEEEEEEEEEEEE Miscellaneous %&pense EEEEEEEEEEEEE. $eneral Corporate %&pense EEEEEEEEEEEE et 9nco/e EEEEEEEEEEEEEEEEEE
4.
P 8",000 (-+,000) P 2#,000 P +,000 -,000 +,000 !!,000 ",000
(20,000) P #,000
P !80,000
!+
9nitial Transfers EEEEEEEEEEEEEEEE. une 9nventor Ship/ent EEEEEEEEEEEE.. Propert Ta& Pa/ent EEEEEEEEEEEEE.. Septe/4er 9nventor Ship/ent EEEEEEEEEE %&pense ;llocation EEEEEEEEEEEEEE.. Cash Transfer EEEEEEEEEEEEEEEE... alance in 5o/e 6ffice*ranch ;ccounts (correct) E..
c.
P !88,000 !8,000 -,000 #",000 ",000 ("2,000) P !80,000
ournal %ntries Tarlac ranch !*!0*08
!*#0*08 #*!*08
+*!*08
-*!*08 "*-*08 7*"*08 '*'*08
!0*!*08
Cash EEEEEEEEEEEEE. 9nventor EEEEEEEEEEE. %3uip/ent EEEEEEEEEEE 5o/e 6ffice EEEEEEEE >ent %&pense EEEEEEEEEE Cash EEEEEEEEEEE. Cash EEEEEEEEEEEEE.. Sales EEEEEEEEEEE Cost of $oods Sold EEEEEEE.. 9nventor EEEEEEEEE. Cash EEEEEEEEEEEEE. Sales EEEEEEEEEE... Cost of $oods Sold EEEEEEE. 9nventor EEEEEEEEE Miscellaneous %&penses EEEEE. Cash EEEEEEEEEE... 9nventor EEEEEEEEEEE. 5o/e office EEEEEEE... Propert Ta& %&pense EEEEEE. 5o/e 6ffice EEEEEEE.. 9nventor EEEEEEEEEEE 5o/e 6ffice EEEEEEE.
Cash EEEEEEEEEEEEE Sales EEEEEEEEEE. Cost of $oods Sold EEEEEE.. 9nventor EEEEEEEE.. !!*!*08 Miscellaneous %&penses EEEE... Cash EEEEEEEEEE. !#*##*08 5o/e 6ffice EEEEEEEEE Cash EEEEEEEEEE. !#*2!*08 epreciation %&pense EEEEE. ;ccu/ulated depreciation E.. !#*2!*08 $eneral Corporate %&penses EEE 5o/e 6ffice EEEEEEE..
20,000 2",000 !##,000 !88,000 +,000 +,000 #7,000 #7,000 !8,000 !8,000 22,000 22,000 !8,000 !8,000 7,000 7,000 !8,000 !8,000 -,000 -,000 #",000 #",000
#",000 #",000 !8,000 !8,000 +,000 +,000 "2,000 "2,000 +,000 +,000 ",000 ",000
!-
d.
TARLAC RACH aa"c) ,#)) )c)b)! 31 2008
&ssets Cash EEEEEEEEEEEEEEEEE. 9nventor EEEEEEEEEEEEEEE. %3uip/ent EEEEEEEEEEEEEE... ;ccu/ulated epreciation EEEEEEEE. Total ;ssets EEEEEEEEEEE 4%it$ 5o/e 6fficeF EEEEEEEEEEEEE..
P P !##,000 (+,000)
28,000 #",000
!!8,000 P !8#,000
P !8#,000
F5o/e office 4alance is P !80,000 as co/puted in Part 4 plus the P #,000 net inco/e for the period.
!"
