Scribd
Upload
60 views6 pages

Advanced Accounting - Part 2 Problem 4 Branch Book Adjusting Entries A

This document provides information on adjusting and closing entries for the branch and home office books of an accounting problem. It includes entries for selling expenses, depreciation, accrued expenses, prepaid expenses, notes payable, inventory, purchases, and shipments between the home and branch offices. Computations are shown for the branch's net income, true net income using an alternative method, and its balance sheet. Adjustments are also made to the allowance for overvaluation of the branch's inventory.

Uploaded by

Airille
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
60 views6 pages

Advanced Accounting - Part 2 Problem 4 Branch Book Adjusting Entries A

This document provides information on adjusting and closing entries for the branch and home office books of an accounting problem. It includes entries for selling expenses, depreciation, accrued expenses, prepaid expenses, notes payable, inventory, purchases, and shipments between the home and branch offices. Computations are shown for the branch's net income, true net income using an alternative method, and its balance sheet. Adjustments are also made to the allowance for overvaluation of the branch's inventory.

Uploaded by

Airille
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
You are on page 1/ 6

Advanced Accounting - Part 2

Chapter 13
Problem 4
Branch Book
Adjusting Entries
a.

Selling expenses
Store Supplies

b.

Selling expenses
Accumulated Depreciation - store furniture

c.

Selling expenses
Accrued selling expense

120

d.

Prepaid selling expense


Selling expenses

150

Notes payable
Home office

260

80

1,000

Closing Entries
Income and expense summary
Sales
Merchandise inventory - end
Purchases
Shipment from Home Office
Merchandise inventory - beg
Selling expenses
General expenses
Home office
Income and expense summary

450
20,500
16,950

450

Home office Book


Closing Entries
Branch income and expense summary
Investment in branch
Allowance for overvaluation in Branch inventory
Branch income and expense summary

450

2,200

Branch income and expense summary


Income and expense summary

1,750

then to Retained Earnings

Computation: ( Acquired from Home Office)


Billed
Inventory - beg
12,500
Add: Shipment from Home Office
10,500
Goods available for sale
23,000
Less: Inventory - end
14,200
Cost of good sold
8,800

Cost
9,375
7,875
17,250
10,650
6,600

Computation of Branch net income / Branch true

260

80

120

150

1,000

Sales
Less: Cost of sales
Inventory - beg
Purchases
Shipment from Home office
Goods available for sale
Less: Inventory - End
Gross profit
Less: expense
General expenses
Selling expenses
Net loss
Branch net loss
Add: Realized profit
Branch true net income

Alternative computation for Branch true net inco

5,000
10,500
16,000
4,560
1,840

450

Sales
Less: Cost of sales (at cost )
Inventory - beg
Purchases
Shipment from Home office
Goods available for sale
Less: Inventory - End
Gross profit
Less: expense
General expenses
Selling expenses
Net income

Branch Balance Sheet


450

2,200

Cash
Merchandise inventory
Prepaid selling expense
Store supplies

1,750

Store furniture
Less: Accumulated depreciation
Total assets
Accrued expense
Accounts payable
Home office (23,180 + 1,000 - 450)
Total liabilities

Allowance
3,125
2,625
5,750
3,550
2,200

Allowance beginning
Increase in allowance for the period
Allowance before adjustments
Required allowance
Realized profit

et income / Branch true net income


20,500
16,000
5,000
10,500
31,500
16,950

1,840
4,560

14,550
5,950

6,400
(450)
(450)
2,200
1,750

for Branch true net income


20,500
12,875
5,000
7,875
25,750
13,400

1,840
4,560

12,350
8,150

6,400
1,750

2,510
16,950
150
140

8,000
(400)

7,600
27,350
120
3,500
23,730
27,350

You might also like