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Prepare journal entries in the accounting records of both the home office and the Exeter Branch of Wardell Company to record each of the following transactions or events (omit explanations): a. Home office transferred cash of $5,000 and merchandise (at home office cost) of $10,000 to the branch. Both the home office and the branch use the perpetual inventory system. b. Home office allocated operating expenses of $1,500 to the branch. c. Exeter Branch informed the home office that it had collected $416 on a note payable to the home office. Principal amount of the note was $400. d. Exeter Branch made sales of $12,500, terms 2/10, n/30, and incurred operating ex- penses of $2,500. The cost of goods sold was $8,000, and the operating expenses were paid in cash. e. Exeter Branch had a net income of $500. (Debit Income Summary in the accounting records of the branch.)

Prepare journal entries in the accounting records of both the home office and the Exeter Branch of Wardell Company to record each of the following transactions or events (omit explanations): a. Home office transferred cash of $5,000 and merchandise (at home office cost) of $10,000 to the branch. Both the home office and the branch use the perpetual inventory system. b. Home office allocated operating expenses of $1,500 to the branch. c. Exeter Branch informed the home office that it had collected $416 on a note payable to the home office. Principal amount of the note was $400. d. Exeter Branch made sales of $12,500, terms 2/10, n/30, and incurred operating ex- penses of $2,500. The cost of goods sold was $8,000, and the operating expenses were paid in cash. e. Exeter Branch had a net income of $500. (Debit Income Summary in the accounting records of the 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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Prepare journal entries in the accounting records of both the home office and the Exeter Branch of Wardell Company to record each of the following transactions or events (omit explanations): a. Home office transferred cash of $5,000 and merchandise (at home office cost) of $10,000 to the branch. Both the home office and the branch use the perpetual inventory system. b. Home office allocated operating expenses of $1,500 to the branch. c. Exeter Branch informed the home office that it had collected $416 on a note payable to the home office. Principal amount of the note was $400. d. Exeter Branch made sales of $12,500, terms 2/10, n/30, and incurred operating ex- penses of $2,500. The cost of goods sold was $8,000, and the operating expenses were paid in cash. e. Exeter Branch had a net income of $500. (Debit Income Summary in the accounting records of the branch.)
Transcribed Image Text:Prepare journal entries in the accounting records of both the home office and the Exeter Branch of Wardell Company to record each of the following transactions or events (omit explanations): a. Home office transferred cash of $5,000 and merchandise (at home office cost) of $10,000 to the branch. Both the home office and the branch use the perpetual inventory system. b. Home office allocated operating expenses of $1,500 to the branch. c. Exeter Branch informed the home office that it had collected $416 on a note payable to the home office. Principal amount of the note was $400. d. Exeter Branch made sales of $12,500, terms 2/10, n/30, and incurred operating ex- penses of $2,500. The cost of goods sold was $8,000, and the operating expenses were paid in cash. e. Exeter Branch had a net income of $500. (Debit Income Summary in the accounting records of the branch.)
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