What is the net adjustment of the investment in Bacolod account at the end of the year?
At the end of the year the Investment in Bacolod account of the home office is
P300,500. However, there are transactions discovered to have errors.
•Bacolod branch bought equipment on June 1, 2020 costing P63,800 for the
home office's use and the policy is to record the asset in Bacolod's books.
During that time the home office recorded the equipment and credited its
reciprocal account of its Bacolod branch.
•The policy of the company regarding the equipment's
has a life of 8 years with no salvage value and the straight-line method should
be used. No entry has been made by the home office and branch.
•The home office ships merchandise to Bacolod amounting to P96,700. Bacolod
recorded the transaction as P97,600
•Bacolod pays the home office's creditors in the amount of P32,400 and sends a
debit memo to the home office.
•Upon receipt of the debit memo, the home office debited its reciprocal
account in the amount of P23,400 twice.
What is the net adjustment of the investment in Bacolod account at the end of
the year? *
20,052 debit
20,052 credit
19,387.3 debit
19,387.5 credit
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