Elizabeth Sales decided to create a branch in Naga City at the start of 2022. The branch operation had the following transactions during 2022: 1. Merchandise costing P350,000 and cash of P200,000 were transferred from the home office. The branch purchased on account additional merchandise inventory of P400,000 from other distributors. 2. 3. Sales of P650,000 were made by the branch during the period. The cost of these sales was P425,000. Cash of P600,000 was collected from sales during the year. Advertising costs of P40,000, sales commissions of P65,000, and other operating expenses of P45,000 were incurred and paid by the branch. 4. 5. The branch paid P370,000 on account to other distributors and remitted P120,000 to the home office. Required: 1. Record each of the transactions on the books of the branch. 2. Prepare an income statement for the branch for 2022. 3. Prepare a Statement of Financial Position as of December 31, 2022, for the branch. 1. Journal Entries: 1? ? 2? 3? ? ? 4? ? ? 5? ? ? ? ? ? ? ? ? PARTICULARS 2. Income Statement Elizabeth Sales - Naga Branch Income Statement For the year ended December 31, 2022 Sales Costs of Goods Sold Gross Profit Expenses: Advertising Expenses Sales Commissions Other Expenses Net Income BRANCH BOOKS ? ? ? ? ? ? ? ? ? ? ? ? ? ? Dr ? ? ? ? ? ? ? ? ? ? 225,000.00 75,000.00 3. Statement of Financial Position Elizabeth Sales - Naga Branch Statement of Financial Position As of December 31, 2022 Cash Accounts Receivable Merchandise Inventory Total Assets Accounts Payable Home Office Total Liabilities and Capital ? ? ? ? ? 535,000.00 535,000.00
Elizabeth Sales decided to create a branch in Naga City at the start of 2022. The branch operation had the following transactions during 2022: 1. Merchandise costing P350,000 and cash of P200,000 were transferred from the home office. The branch purchased on account additional merchandise inventory of P400,000 from other distributors. 2. 3. Sales of P650,000 were made by the branch during the period. The cost of these sales was P425,000. Cash of P600,000 was collected from sales during the year. Advertising costs of P40,000, sales commissions of P65,000, and other operating expenses of P45,000 were incurred and paid by the branch. 4. 5. The branch paid P370,000 on account to other distributors and remitted P120,000 to the home office. Required: 1. Record each of the transactions on the books of the branch. 2. Prepare an income statement for the branch for 2022. 3. Prepare a Statement of Financial Position as of December 31, 2022, for the branch. 1. Journal Entries: 1? ? 2? 3? ? ? 4? ? ? 5? ? ? ? ? ? ? ? ? PARTICULARS 2. Income Statement Elizabeth Sales - Naga Branch Income Statement For the year ended December 31, 2022 Sales Costs of Goods Sold Gross Profit Expenses: Advertising Expenses Sales Commissions Other Expenses Net Income BRANCH BOOKS ? ? ? ? ? ? ? ? ? ? ? ? ? ? Dr ? ? ? ? ? ? ? ? ? ? 225,000.00 75,000.00 3. Statement of Financial Position Elizabeth Sales - Naga Branch Statement of Financial Position As of December 31, 2022 Cash Accounts Receivable Merchandise Inventory Total Assets Accounts Payable Home Office Total Liabilities and Capital ? ? ? ? ? 535,000.00 535,000.00
Chapter1: Financial Statements And Business Decisions
Section: Chapter Questions
Problem 1Q
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Master Budget
A master budget can be defined as an estimation of the revenue earned or expenses incurred over a specified period of time in the future and it is generally prepared on a periodic basis which can be either monthly, quarterly, half-yearly, or annually. It helps a business, an organization, or even an individual to manage the money effectively. A budget also helps in monitoring the performance of the people in the organization and helps in better decision-making.
Sales Budget and Selling
A budget is a financial plan designed by an undertaking for a definite period in future which acts as a major contributor towards enhancing the financial success of the business undertaking. The budget generally takes into account both current and future income and expenses.
Question
Transcribed Image Text:Exercise No. 2
Elizabeth Sales decided to create a branch in Naga City at the start of 2022. The branch operation had the following transactions during 2022:
Merchandise costing P350,000 and cash of P200,000 were transferred from the home office.
The branch purchased on account additional merchandise inventory of P400,000 from other distributors.
3. Sales of P650,000 were made by the branch during the period. The cost of these sales was P425,000. Cash of P600,000 was collected from sales during the year.
4. Advertising costs of P40,000, sales commissions of P65,000, and other operating expenses of P45,000 were incurred and paid by the branch.
5.
The branch paid P370,000 on account to other distributors and remitted P120,000 to the home office.
1.
2.
Required:
1. Record each of the transactions on the books of the branch.
2. Prepare an income statement for the branch for 2022.
3. Prepare a Statement of Financial Position as of December 31, 2022, for the branch.
1. Journal Entries:
1?
?
2?
3?
?
?
4?
?
?
5?
?
?
?
?
?
?
?
?
PARTICULARS
2. Income Statement
Elizabeth Sales - Naga Branch
Income Statement
For the year ended December 31, 2022
Sales
Costs of Goods Sold
Gross Profit
Expenses:
Advertising Expenses
Sales Commissions
Other Expenses
Net Income
BRANCH BOOKS
?
?
?
?
?
?
?
?
?
?
?
?
?
?
Dr
?
?
?
?
?
?
?
?
?
?
Cr
225,000.00
75,000.00
3. Statement of Financial Position
Elizabeth Sales - Naga Branch
Statement of Financial Position
As of December 31, 2022
Cash
Accounts Receivable
Merchandise Inventory
Total Assets
Accounts Payable
Home Office
Total Liabilities and Capital
?
?
?
?
?
535,000.00
535,000.00
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