After examining the reciprocal accounts of the SAE Company with its Branch - SSE and the similar account carried on the latter's books, the following discrepancies at the close of the business on June 30, 2022 were seen: a.) A charge for labor by the Home Office, P 50,000 was recorded twice by the branch. b.) A charge of P 89,500 was made by the Home Office for freight on merchandise, but the amount was recorded by the Branch as P8,950. c.) A charge of P 98,000 (furniture and fixtures) on the Home Office books was taken up by the branch as P89,000. d.) A credit by the Home Office for P 35,000 (merchandise allowances) was taken up by the branch as P40,000. e.) The Home Office charged the Branch P 42,500 for interest on an open account which the Branch failed to take up in full; instead, the Branch sent to Home Office a wrong adjusting memo, reducing the charge by P10,000 and setting up a liability for the net amount. f.) The Home Office received P 500,000, from the sale of the 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 debit notes for P 37,000 representing its proportion of a bill for repairs of the truck; the Home Office did not record it. h.) The Branch inadvertently received a copy of the Home Office entry dated July 19, 2022 correcting item 6, and entered a credit in favor of the Home Office as of June 30, 2022. At June 30, 2022, the Unadjusted Balance of the Branch Current Account on the books of the Home Office showed P17,552,000. At the beginning of the year, the reciprocal accounts were in balance. Requirements: 1. Compute the adjusted balance of the reciprocal accounts as of June 30, 2022. 2. Compute the net adjustment to the Branch Current account (identify if it is debit or credit). 3. Compute the net adjustment to the Home Office account (identify if it is debit or credit).
After examining the reciprocal accounts of the SAE Company with its Branch - SSE and the similar account carried on the latter's books, the following discrepancies at the close of the business on June 30, 2022 were
seen:
a.) A charge for labor by the Home Office, P 50,000 was recorded twice by the branch.
b.) A charge of P 89,500 was made by the Home Office for freight on merchandise, but the amount was recorded by the Branch as P8,950.
c.) A charge of P 98,000 (furniture and fixtures) on the Home Office books was taken up by the branch as P89,000.
d.) A credit by the Home Office for P 35,000 (merchandise allowances) was taken up by the branch as P40,000.
e.) The Home Office charged the Branch P 42,500 for interest on an open account which the Branch failed to take up in full; instead, the Branch sent to Home Office a wrong adjusting memo, reducing the charge by P10,000 and setting up a liability for the net amount.
f.) The Home Office received P 500,000, from the sale of the 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 debit notes for P 37,000 representing its proportion of a bill for repairs of the truck; the Home Office did not record it.
h.) The Branch inadvertently received a copy of the Home Office entry dated July 19, 2022 correcting item 6, and entered a credit in favor of the Home Office as of June 30, 2022.
At June 30, 2022, the Unadjusted Balance of the Branch Current Account on the books of the Home Office showed P17,552,000. At the beginning of the year, the reciprocal accounts were in balance.
Requirements:
1. Compute the adjusted balance of the reciprocal accounts as of June 30, 2022.
2. Compute the net adjustment to the Branch Current account (identify if it is debit or credit).
3. Compute the net adjustment to the Home Office account (identify if it is debit or credit).
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