On December 31, the Investment in Branch account on the home office books of the Unlimited Company shows a balance of P168,000. The following are some of the transactions between the home office and the branch: a. Merchandise billed at P12,300 was shipped by the home office to the branch on December 28. The merchandise is in transit and has not been recognized on the books of the branch. b. The branch collected a home office accounts receivable of P50,000 but failed to notify the home office of this collection. c. The home office was charged P12,800 when the branch returned merchandise to the home office on December 31. The merchandise is in transit. d. The home office recorded incorrectly the branch net income for November at P22,500. The branch reported net income of P25,200. 1. The unadjusted balance of the Home Office account was: 2. What is the adjusted balance of the Home Office account?
Bad Debts
At the end of the accounting period, a financial statement is prepared by every company, then at that time while preparing the financial statement, the company determines among its total receivable amount how much portion of receivables is collected by the company during that accounting period.
Accounts Receivable
The word “account receivable” means the payment is yet to be made for the work that is already done. Generally, each and every business sells its goods and services either in cash or in credit. So, when the goods are sold on credit account receivable arise which means the company is going to get the payment from its customer to whom the goods are sold on credit. Usually, the credit period may be for a very short period of time and in some rare cases it takes a year.
On December 31, the Investment in Branch account on the home office books of the Unlimited Company shows a balance of P168,000. The following are some of the transactions between the home office and the branch:
a. Merchandise billed at P12,300 was shipped by the home office to the branch on December 28. The merchandise is in transit and has not been recognized on the books of the branch.
b. The branch collected a home office
c. The home office was charged P12,800 when the branch returned merchandise to the home office on December 31. The merchandise is in transit.
d. The home office recorded incorrectly the branch net income for November at P22,500. The branch reported net income of P25,200.
1. The unadjusted balance of the Home Office account was:
2. What is the adjusted balance of the Home Office account?
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