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Home Office and Branch

1. The document provides journal entries for home office and branch transactions between the home office books and branch books. 2. It includes a trial balance for the branch as of a certain point. 3. It shows journal entries to close the branch's profit to the reciprocal accounts in the home office books and a reconciliation of the reciprocal accounts between the home office and branch books.

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Zoie Corañez
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3K views12 pages

Home Office and Branch

1. The document provides journal entries for home office and branch transactions between the home office books and branch books. 2. It includes a trial balance for the branch as of a certain point. 3. It shows journal entries to close the branch's profit to the reciprocal accounts in the home office books and a reconciliation of the reciprocal accounts between the home office and branch books.

Uploaded by

Zoie Corañez
Copyright
© © All Rights Reserved
We take content rights seriously. If you suspect this is your content, claim it here.
Available Formats
Download as XLSX, PDF, TXT or read online on Scribd
  • Journal Entries: Gives the journal entries concerning home office and branch transactions, covering various aspects like investment and equipment accounts.
  • Trial Balance: Presents the trial balance of the branch, highlighting accounts such as cash, equipment, and accumulated depreciation.
  • Statement of Financial Position: Shows the financial position through key statements like assets, liabilities, and equity for both the home office and the branch.
  • Calculations and Reconciliations: Contains detailed entries and calculations necessary for reconciling accounts and determining final balances through journal extracts.
  • Detailed Performance Data: Detailed presentation of performance scores, including eliminations and combined financial outputs for managerial assessment.

PROBLEM 5:

1. Journal Entries - Home office and Branch Transactions


Requirement A:
January 1, 20x1
Home Office Books
Investment in Branch
Cash

a.
Home Office Books
Investment in Branch
Accounts Payable

b.
Home Office Books
No Entry

c.
Home Office Books
Investment on Branch
Accumulated Depreciation
Equipment

d.
Home Office Books
No Entry

e.
Home Office Books
Cash
Investment in Branch

f.
Home Office Books
No Entry

g,
Home Office Books
No Entry

h.
Home Office Books
Investment in Branch
Expenses

i.
Home Office Books
No Entry

Trial balance of the branch as of this point is shown below:

Cash
Equipment
Accumulated Depreciation
Home Office
Accounts Payable
Sales
Purchases
Expenses
Totals

Requirement B:
k. To close the branch's profit to the reciprocal accounts:
Home Office Books
Investments in Branch
Income Summary

Reconciling the reciprocal accounts


Home Office Books Branch Books
Investment Branch Home Office
500,000
100,000
60,000
80,000 80,000
25,000
235,000
840,000 840,000

Requirement C
Mark Ngina's Peanuts Corporation
Statement of Profit or Loss
As of January 31, 20x1

Sales
Cost of Goods Sold
Inventory Beginning
Purchases
Freight-In
Total Goods Available
Inventory, End
Gross Prodit
Expenses
Profit for the period

Mark Ngina's Peanut Corporation


Statement of Financial Position
As of January 31,20x1

Assets
Current Assets
Cash
Inventory
Non-current Assets
Equipment
Accumulated Depreciation
Total Assets

Liabilities
Current Liabilities
Accounts Payable
Total Liabilities
Owner's Equity
Home Office
Total Liabilities and Equity

Combined Financial Statement


Home Office Branch
Dr. (Cr.) Dr. (Cr.)
Cash 600,000 250,000
Accounts Receivable 720,000 280,000
Inventory, Beg 650,000 10,000
Shipment from Home Office 520,000
Purchases 880,000 15,000
Freight-In 33,000 5,000
Shipment to Branch (520,000)
Investment in Branch 545,000
Land 1,000,000
Building 4,000,000
Accumulated Depreciation - Bldg (2,400,000)
Equipment 800,000 500,000
Accumulated Depreciation - Equipment (200,000) (100,000)
Accounts Payable (360,000) (40,000)
Share Capital (2,000,000)
Share Premium (500,000)
Retained Earning (946,000)
Home Office (545,000)
Sales 2,900,000 1,080,000
Depreciation Expense 400,000 75,000
Sales Expense 180,000 100,000
Utilities Expense 19,000 10,000
Totals - -

Statement of Profit or Loss


As of January 31, 20x1

Sales
Cost of Goods Sold
Inventory, Beg.
Purchases
Freight-In
Total Goods Available for Sale
Inventory, End (160k + 56k)
Gross Profit
Depreciatio Expense
Salaries Expense
Utilities Expense
Profit for the End

Statement of Financial Position


As of January 31, 20x1

Assets
Currrent Assets
Cash
Accounts Recivable
Inventory
None-Current Assets
Land
Building
Accumulated Depreciation - Bldg.
Equipment
Accumulated Depreciation - Equipment
Total Assets

Liabilities
Current Liabilities
Accounts Payable
Total Liabilities
Owner's Equity
Share Premium
Share Capital
Retained Earning (946k + 1.82M Profit)
Total Liabilities and Owner's Equity
Home Office Books Branch Books
500,000 Cash 500,000
500,000 Home Office

ks Branch Books
100,000 Purchases 200,000
500,000 Accounts Payable
Home Office

ks Branch Books
Equipment 120,000
Cash

ks Branch Book
60,000 Equipment 360,000
300,000 Home Office
360,000 Accumulated Depreciation

ks Branch Books
Cash 600,000
Sales

ks Branch Books
800,000 Home Office 80,000
800,00 Cash

ks Branch Books
Expenses 150,000
Cash

ks Branch Books
Depreciation Expense 10,000
Accumulated Depreciation

ks Branch Books
25,000 Expenses 25,000
25,000 Home Office

ks Branch Books
Cost pf Goods Sold 20,000
Inventory

Debit Credit
750,000
480,000
310,000
600,000
100,000
600,000
200,000
185,000
1,615,000 1,610,000

ks Branch Books
235,000 Income Summary 235,000
235,000 Home Office 235,000

Branch Books
Home Office
500,000
100,000
60,000

25,000
235,000

Peanuts Corporation
of Profit or Loss
nuary 31, 20x1

600,000
200,000
-
200,000
(20,000) 180,000
420,000
185,000
235,000

Peanut Corporation
f Financial Position
nuary 31,20x1

750,000
20,000

480,000
(310,000)
940,000

100,000
100,000

840,000
940,000

Elimination Combined
Dr. (Cr.) Dr. (Cr.)
850,000
1,000,000
660,000
(520,000) -
895,000
38,000
520,000
(545,000)
1,000,000
4,000,000
(2,400,000)
1,300,000
(300,000)
(400,000)
(2,000,000)
(500,000)
(946,000)
545,000
3,980,000
475,000
280,000
28,000
- -

of Profit or Loss
nuary 31, 20x1

3,980,000

660,000
895,000
38,000
1,593,000
(216,000) 1,377,000
2,603,000
(475,000)
(280,000)
(28,000)
1,820,000

f Financial Position
nuary 31, 20x1

850,000
1,000,000
216,000

1,000,000
4,000,000
(2,400,000)
1,300,000
(300,000)
5,666,000
400,000
400,000

500,000
2,000,000
2,766,000
5,666,000
500,000

100,000
100,000

120,000

60,000
300,000

600,000

80,000

150,000

10,000
25,000

20,000

PROBLEM 5: 1. Journal Entries - Home office and Branch Transactions Requirement A: January 1, 20x1 Home Office Books
Investment in Branch Expenses i. Home Office Books No Entry Trial balance of the branch as of this point is shown
Purchases Freight-In Total Goods Available Inventory, End Gross Prodit Expenses Profit for the period Mark Ngi
Share Capital (2,000,000) Share Premium (500,000) Retained Earning
Accounts Payable Total Liabilities Owner's Equity Share Premium Share Capital Retained Earning (946k + 1.82M Prof
Home Office Books Branch Books 500,000 Cash 500,000 500,000
25,000 Expenses 25,000 25,000 Home Office ks Branch
200,000 - 200,000 (20,000)
(2,000,000) (500,000) (946,000) 545,
400,000 400,000 500,000 2,000

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