Answered: the branch incurred a loss of P4,000.…

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

On January 01, 2020 Kit Company, Inc. establishes a branch in Bauang. During the year, Kit Inc. transfers cash and merchandise to the branch worth P15,000 and P45,000 respectively. Freight was paid by the home office worth P1,500 included in the cost of merchandise. The home office also incurred P5,700 expenses of which 30 percent was allocated to the branch. On December 31, 2020, the branch incurred a loss of P4,000. What is the balance of the branch account as per home office books

Debit
P 5,040
Accounts
Credit
Cash.
P 21,000
Home Office Current
Purchases from outsiders
Shipments from Home Office
Accounts receivable .
Expenses ..
Interest expense.
Gain on sale of equipment.
Sales .....
25,000
56,216
15,360
7,500
684
8,800
80,000
P109.800
P109.800

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