Enrichment Problem 3The records of a corporation and its branch show the following information before recognizing theresult of the branch operation:Branch Current.202012/1 Balance202087,234 12/12 Remittances from Branch 12,60033,440 12/26 Remittances from Branch 22,20012/7 Shipments to Branch12/10 Freight12/14 Shipments to Branch12/28 Shipments to Branch 57,60012/31 Advertising47054,3004,2003,900RentHome Office Current2020Dec. 11 Remittances to H.O. 12,600 Dec. 1 BalanceDec. 23 Remittances to H.O. 22,200 Dec. 10 Shipments from H.O. 33,440Dec. 31 Remittances to H.O. 19,200 Dec. 18 Shipments from H.O. 54,300202087,2343.Branch Records year 2020SalesP778,200623,20047,800Merchandise from H.O.Inventory beginningInventory year-endOperating Expenses64,58046,6904.a.) The freight charged by the H.O. to the Branch should have been a charge to itsaccount customer.b.) Advertising and Rent charged to the Branch represent the allocated share of theBranch in the said expenses.c.) Shipments to the Branch 12/28 and Remittances to the H.O. 12/31 are still intransit.Instructions:1. Prepare a reconciliation of the current account balances as of 12/31/202. Prepare necessary adjusting entries to reflect the correct current balances as of12/31/20.

Purpose of Branch accounting is to assess profit & loss at branch level.

Answered: Enrichment Problem 3 The records of a…

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

10th Edition

ISBN:9781259964947

Author:Libby

Publisher:Libby

Chapter1: Financial Statements And Business Decisions

Section: Chapter Questions

Problem 1Q

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Question

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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