Problem-solving. Present supporting computation in good form.

Write your final answer on the

blanks provided. (3 pts. each)

Problem 1
Selected balances from the Jurassic Company’s Branches A and B are as follows:

Branch A Branch B
Inventory, January 1, 2019 31,000 29,000
Imprest Branch Fund 5,000 4,000
Inventory, December 31, 2019 19,000 12,000
Accounts Receivable, January 1, 2019 55,000 43,500
Accounts Receivable, December 31, 2019 70,000 53,500
Merchandise from Home Office 61,000 47,000
Cash Collections 85,000 70,000
Accounts Payable, January 1, 2019 10,500 11,200
Accounts Payable, December 31, 2019 18,400 19,500
Sales 220,000 170,000
Cash Expenses 21,000 14,300
Purchases from outside suppliers 30,000 20,000
Accrued Expenses 10,500 8,200
Freight-in 2,000 1,400
Sales returns 7,500 4,700

All sales, collections, and expenses are handled at the branch. All cash received from sales and
collections are sent directly to the home office. Expenses are paid by the branch from the imprest
fund immediately reimbursed by the home office and credited to the Home Office account. All
expenses paid by the branch are recorded in the branch books.

1. The net profit of Branch A is 76,000.

2. The net profit of Branch B is 57,400
3. The balance of the Home Office account of Branch A on January 1, 2019 is 160,500.
4. The balance of the Home Office account of Branch B on January 1, 2019 is 131,300.
5. The balance of the Investment in Branch A account on December 31, 2019 is (60,500)
6. The balance of the Investment in Branch B account on December 31, 2019 is (50,900)

Problem 2
B & G Company operates a branch in Cebu. On September 30, 2020, the Investment in Branch
account had a balance of P170,000. In the process of reconciling the reciprocal accounts, the items
that follow were noted:
a. The home office had billed the branch P37,500 for merchandise shipment still in transit as
of September 30.
b. A home office customer’s account for P10,500 collected by the branch on September 28
has not been reported to the home office.
c. The branch has failed to recognize its P2,500 share of advertising expense paid for by the
home office.
d. The branch reported a net income of P21,750 during the fiscal period; this was erroneously
taken up as P22,750 by the home office.

Assume that all other transactions related to the home office and its branch are correctly
recorded.

1. What is the unadjusted balance of Home Office account on September 30? 139,500_
2. What is the reconciled balance of the reciprocal accounts on September 30? 179,500

Problem 3
BE Company’s Rizal Branch submitted the following data for 2019, its first year of operations:
Sales 427,000
Shipment from Home Office 372,240
Operating expenses 37,510
Home Office 90,250
Shipments to the branch are billed at cost. The December 31 inventory of the branch was P50,490.
What is the correct balance on December 31, 2019 of the Investment in Branch account as per the
home office books? 157,990

Problem 4
The following were found in your examination of the interplant accounts between the Home Office
and the Butuan Branch:
a. Transfer of fixed assets from home office amounting to P53,900 was not booked by the
branch.
b. P10,000 covering marketing expense of another branch was charged by home office to
Butuan.
c. Butuan recorded a debit note on inventory transfers from home office of P70,000 twice.
d. Home office recorded cash transfer of P65,500 from Butuan branch as coming from Davao
branch.
e. Butuan reversed a previous debit memo from Cagayan de Oro branch amounting to P12,500.
Home office decided that this charge is appropriately Davao branch’s cost.
f. Butuan recorded a debit memo from home office of P4,680 as P4,860.

1. The net adjustment in the home office books related to the Butuan Branch account is (increased
or decreased by) decreased by 75,500.
2. The net adjustment in Butuan’s books related to the Home Office account is (increased or
decreased by) 15,920 increase

Problem 5
After examining on a comparative basis, the inter-office account of the Bernard Company with its
suburban branch and the similar account carried on the latter’s books, the following discrepancies
at the close of the business on June 30, 2020 were seen:
a. A charge for depreciation by the home office, P1,500 was recorded twice by the branch.
b. A charge of P950 was made by the home office for freight on merchandise, but the amount
was recorded by the branch as P89.50.
c. A charge of P9800 (furniture) on the home office books was taken up by the branch as
P8900.
d. A credit by the home office for P3050 (merchandise allowances) was taken up by the
branch as P3500.
e. The home office charged the branch P4250 for interest on open account which the branch
failed to take up in full; instead, the branch sent to the home office a wrong adjusting
memo, reducing the charge by P1000 and set up a liability for the net.
f. The home office received P15,000 from the sale of a truck which it erroneously credited to
the branch; the branch did not charge the home office therewith.
g. The branch by mistake sent the home office a debit note for P1,370 representing its
proportion of a bill for repairs of truck; the home office did not record it.
h. The branch inadvertently received a copy of the home office entry dated July 19, 2020
correcting item (f) and entered a credit in favor of the home office as of June 30, 2020.

At June 30, 2020, the unadjusted balance of the Investment in Branch account on the home office
books showed P175,520. At the beginning of the year, the inter-office accounts were in balance.
1. Compute the unadjusted balance of the Home Office account on the branch books at
June 30, 2020. 199,189.50
2. Compute the adjusted balance of the reciprocal accounts at June 30, 2020.
190,520

Problem 6
WT Company operates a number of branches. On October 31, 2020, its Ozamis branch shows a
Home Office account balance of P55,700. An examination of the records discloses the following
information which may help in reconciling both accounts:

 A P24,000 shipment, charged by home office to Ozamis branch, was actually sent to, and
retained by Cagayan branch.
 A P32,000 shipment intended for, and charged to, Cebu branch, was sent instead to Ozamis
branch and retained by the latter.
 A P6,000 emergency cash transfer from Cebu branch to Cagayan branch was not taken up in
the home office books.
 Home office collected an Ozamis branch receivable but failed to notify the branch, P7,800.
 Home office was charged P2,700 for merchandise returned by Ozamis branch on October
30; these are in transit.
 Home office erroneously recorded Ozamis branch net income as P30,550 while Ozamis
branch reported net income of P25,350.

Q1. What is the unadjusted balance of Investment in Ozamis Branch account in home office books?
47,800

Q2. What is the reconciled balance of the reciprocal accounts? (Ozamis Branch books & Home
Office books) _47,900_______