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Enrichment Problem 3 The records of a corporation and its branch show the following information before recognizing the result of the branch operation:

Enrichment Problem 3 The records of a corporation and its branch show the following information before recognizing the result of the branch operation:

FINANCIAL ACCOUNTING
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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Enrichment Problem 3 The records of a corporation and its branch show the following information before recognizing the result of the branch operation: Branch Current. 2020 12/1 Balance 2020 87,234 12/12 Remittances from Branch 12,600 33,440 12/26 Remittances from Branch 22,200 12/7 Shipments to Branch 12/10 Freight 12/14 Shipments to Branch 12/28 Shipments to Branch 57,600 12/31 Advertising 470 54,300 4,200 3,900 Rent Home Office Current 2020 Dec. 11 Remittances to H.O. 12,600 Dec. 1 Balance Dec. 23 Remittances to H.O. 22,200 Dec. 10 Shipments from H.O. 33,440 Dec. 31 Remittances to H.O. 19,200 Dec. 18 Shipments from H.O. 54,300 2020 87,234 3. Branch Records year 2020 Sales P778,200 623,200 47,800 Merchandise from H.O. Inventory beginning Inventory year-end Operating Expenses 64,580 46,690 4. a.) The freight charged by the H.O. to the Branch should have been a charge to its account customer. b.) Advertising and Rent charged to the Branch represent the allocated share of the Branch in the said expenses. c.) Shipments to the Branch 12/28 and Remittances to the H.O. 12/31 are still in transit. Instructions: 1. Prepare a reconciliation of the current account balances as of 12/31/20 2. Prepare necessary adjusting entries to reflect the correct current balances as of 12/31/20.
Transcribed Image Text:Enrichment Problem 3 The records of a corporation and its branch show the following information before recognizing the result of the branch operation: Branch Current. 2020 12/1 Balance 2020 87,234 12/12 Remittances from Branch 12,600 33,440 12/26 Remittances from Branch 22,200 12/7 Shipments to Branch 12/10 Freight 12/14 Shipments to Branch 12/28 Shipments to Branch 57,600 12/31 Advertising 470 54,300 4,200 3,900 Rent Home Office Current 2020 Dec. 11 Remittances to H.O. 12,600 Dec. 1 Balance Dec. 23 Remittances to H.O. 22,200 Dec. 10 Shipments from H.O. 33,440 Dec. 31 Remittances to H.O. 19,200 Dec. 18 Shipments from H.O. 54,300 2020 87,234 3. Branch Records year 2020 Sales P778,200 623,200 47,800 Merchandise from H.O. Inventory beginning Inventory year-end Operating Expenses 64,580 46,690 4. a.) The freight charged by the H.O. to the Branch should have been a charge to its account customer. b.) Advertising and Rent charged to the Branch represent the allocated share of the Branch in the said expenses. c.) Shipments to the Branch 12/28 and Remittances to the H.O. 12/31 are still in transit. Instructions: 1. Prepare a reconciliation of the current account balances as of 12/31/20 2. Prepare necessary adjusting entries to reflect the correct current balances as of 12/31/20.
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