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P-1 A branch of Venell Corporation is on its first year of operations. The following series of activities summarize the branch transactions: a. The home office sends P75,000 to the newly formed branch to start its operations. b. The home office shipped merchandise, with a cost of P45,000 to the branch. c. The branch purchased P60,000 worth of merchandise from outside suppliers. d. The home office transfers delivery equipment with a book value of P75,000 to the branch for Php 90,000. The home office pays transportation charges of P3,000: e. The branch sells P112,500 worth of merchandise. f. The home office pays P3,750 of expenses applicable to the branch but has not charged the branch for them. g. The branch records depreciation of P9,000 on the delivery equipment. h. The branch incurs and records P22,500 of selling and administrative expense. i. The branch remits P52,500 to the home office. Required: Journal entries to record the transaction on the books of the home office and on its branch.

P-1 A branch of Venell Corporation is on its first year of operations. The following series of activities summarize the branch transactions: a. The home office sends P75,000 to the newly formed branch to start its operations. b. The home office shipped merchandise, with a cost of P45,000 to the branch. c. The branch purchased P60,000 worth of merchandise from outside suppliers. d. The home office transfers delivery equipment with a book value of P75,000 to the branch for Php 90,000. The home office pays transportation charges of P3,000: e. The branch sells P112,500 worth of merchandise. f. The home office pays P3,750 of expenses applicable to the branch but has not charged the branch for them. g. The branch records depreciation of P9,000 on the delivery equipment. h. The branch incurs and records P22,500 of selling and administrative expense. i. The branch remits P52,500 to the home office. Required: Journal entries to record the transaction on the books of the home office and on its branch.

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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P-1 A branch of Venell Corporation is on its first year of operations. The following series of activities summarize the branch transactions: . a. The home office sends P75,000 to the newly formed branch to start its operations. b. The home office shipped merchandise, with a cost of P45,000 to the branch. c. The branch purchased P60,000 worth of merchandise from outside suppliers. d. The home office transfers delivery equipment with a book value of P75,000 to the branch for Php 90,000. The home office pays transportation charges of P3,000: e. The branch sells P112,500 worth of merchandise. f. The home office pays P3,750 of expenses applicable to the branch but has not charged the branch for them. g. The branch records depreciation of P9,000 on the delivery equipment. h. The branch incurs and records P22,500 of selling and administrative expense. i. The branch remits P52,500 to the home office. Required: Journal entries to record the transaction on the books of the home office and on its branch.
Transcribed Image Text:P-1 A branch of Venell Corporation is on its first year of operations. The following series of activities summarize the branch transactions: . a. The home office sends P75,000 to the newly formed branch to start its operations. b. The home office shipped merchandise, with a cost of P45,000 to the branch. c. The branch purchased P60,000 worth of merchandise from outside suppliers. d. The home office transfers delivery equipment with a book value of P75,000 to the branch for Php 90,000. The home office pays transportation charges of P3,000: e. The branch sells P112,500 worth of merchandise. f. The home office pays P3,750 of expenses applicable to the branch but has not charged the branch for them. g. The branch records depreciation of P9,000 on the delivery equipment. h. The branch incurs and records P22,500 of selling and administrative expense. i. The branch remits P52,500 to the home office. Required: Journal entries to record the transaction on the books of the home office and on its branch.
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