journal entries in the books

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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Statsen Company, which prepares financial reports at the end of the calendar year, established a branch on July 1, 2020. The following transactions occurred during the formation of the branch and its first six months of operations, ending December 31, 2020.

 

1. The Home Office sent $35,000 cash to the branch to begin operations.

2. The Home Office shipped inventory to the branch. Intercompany billings totaled $75,000, which was the Home Office's cost.

3. The branch acquired merchandise display equipment which cost $15,000 on July 1, 2020. (Assume that branch fixed assets are carried on the home office books).

4. The branch purchased inventory costing $53,750 from outside vendors on account.

5. The branch had credit sales of $106,250 and cash sales of $43,750.

 

Requirements:

1. Prepare journal entries in the books of the home office and in the books of the branch office for the above transaction 

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