Elizabeth Sales decided to create a branch in Naga City at the start of 20XX. The branch operation had the following transactions during 20XX: 1. Merchandise costing P350,000 and cash of P200,000 were transferred from the home office. 2. 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. Required: 1. Record each of the transactions on the books of the branch. 2. Prepare an income statement for the branch for 20XX. 3. Prepare a balance sheet as of December 31, 20XX, for the branch.

Elizabeth Sales decided to create a branch in Naga City at the start of 20XX. The branch operation had the following transactions during 20XX: 1. Merchandise costing P350,000 and cash of P200,000 were transferred from the home office. 2. 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. Required: 1. Record each of the transactions on the books of the branch. 2. Prepare an income statement for the branch for 20XX. 3. Prepare a balance sheet as of December 31, 20XX, for the branch.

FINANCIAL ACCOUNTING

10th Edition

ISBN:9781259964947

Author:Libby

Publisher:Libby

Chapter1: Financial Statements And Business Decisions

Section: Chapter Questions

Problem 1Q

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