The following transactions pertain to a branch’s first month’s operations: a. The home office sent P9,000 cash to the branch. b. The home office shipped inventory costing P40,000 to the branch; the intercompany billing was for P50,000. c. Branch inventory purchases from outside vendors totaled P30,000. d. Branch sales on account were P80,000. e. The home office allocated P2,000 in advertising expense to the branch. f. Branch collections on accounts receivable were P45,000. g. Branch operating expenses of P14,000 were incurred, none of which were paid at month-end. h. The branch remitted P17,000 to the home office. i. The branch’s ending inventory (as reported in its balance sheet) is composed of: Acquired from outside vendors P12,000 Acquired from home office (at billing price) 20,000 Requirements: a. Prepare journal entries in the books of Home Office and Branch. b. Prepare branch’s income statement for its first month’s operation

FINANCIAL ACCOUNTING
10th Edition
ISBN:9781259964947
Author:Libby
Publisher:Libby
Chapter1: Financial Statements And Business Decisions
Section: Chapter Questions
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The following transactions pertain to a branch’s first month’s operations:
a. The home office sent P9,000 cash to the branch.
b. The home office shipped inventory costing P40,000 to the branch; the intercompany billing was for P50,000.
c. Branch inventory purchases from outside vendors totaled P30,000.
d. Branch sales on account were P80,000.
e. The home office allocated P2,000 in advertising expense to the branch.
f. Branch collections on accounts receivable were P45,000.
g. Branch operating expenses of P14,000 were incurred, none of which were paid at month-end.
h. The branch remitted P17,000 to the home office.
i. The branch’s ending inventory (as reported in its balance sheet) is composed of:
Acquired from outside vendors P12,000
Acquired from home office (at billing price) 20,000
Requirements:
a. Prepare journal entries in the books of Home Office and Branch.
b. Prepare branch’s income statement for its first month’s operation

The following transactions pertain to a branch's first month's operations:
a. The home office sent P9,000 cash to the branch.
b. The home office shipped inventory costing P40,000 to the branch; the intercompany billing was for P50,000.
c. Branch inventory purchases from outside vendors totaled P30,000.
d. Branch sales on account were P80,000.
e. The home office allocated P2,000 in advertising expense to the branch.
f. Branch collections on accounts receivable were P45,000.
g. Branch operating expenses of P14,000 were incurred, none of which were paid at month-end.
h. The branch remitted P17,000 to the home office.
i. The branch's ending inventory (as reported in its balance sheet) is composed of:
Acquired from outside vendors P12,000
Acquired from home office (at billing price) 20,000
Requirements:
a. Prepare journal entries in the books of Home Office and Branch.
b. Prepare branch's income statement for its first month's operation.
Transcribed Image Text:The following transactions pertain to a branch's first month's operations: a. The home office sent P9,000 cash to the branch. b. The home office shipped inventory costing P40,000 to the branch; the intercompany billing was for P50,000. c. Branch inventory purchases from outside vendors totaled P30,000. d. Branch sales on account were P80,000. e. The home office allocated P2,000 in advertising expense to the branch. f. Branch collections on accounts receivable were P45,000. g. Branch operating expenses of P14,000 were incurred, none of which were paid at month-end. h. The branch remitted P17,000 to the home office. i. The branch's ending inventory (as reported in its balance sheet) is composed of: Acquired from outside vendors P12,000 Acquired from home office (at billing price) 20,000 Requirements: a. Prepare journal entries in the books of Home Office and Branch. b. Prepare branch's income statement for its first month's operation.
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