Home Office Branch
Home Office Branch
3) Branch Income
5) Expense allocation
xx
xx
xx
Equipment is purchased by the home office for the branch: the entry for the acquisition:
Home office books:
Equipment Branch ----------------------- xx
Cash/Accounts Payable -------------------xx
Branch books:
Home Office Current ---------------------- xx
Cash/Accounts Payable------------------- xx
CR
31,250
Dec. 5
10,000
Dec. 31 Depreciation charge to branch 2,000
Dec. 31 Shipments to Branch
4,000
Cash received
from branch
Dec. 18
Collection of branch
Trade receivable 500
Branch Books:
Home Office - Current
DR
Dec 4 Cash sent to home office 10,000
Dec. 28 Acquired equipment
1,000
CR
Nov. 30 balance
31,250
Dec. 31 Collection of H.O Trade Rable
Dec. 31 Depreciation charged by H.O 200
PROBLEM 3: Baguio Corp has been operating a branch in Surigao for a year. Shipments are
billed to the branch at cost. The branch carries its own accounts receivable, make its own
cash collections and pay its own expenses. The transactions of the branch for the year 2011
are given effect in the trial balance below:
Cash
Home Office Current
Shipments from Home Office
DEBITS
200,000
CREDITS
400,000
1,600,000
300,000
1,940,000
240,000
2,340,000
2,340,000
PROBLEM 4: On December 31, 2011, the branch manager of Rachelle Company in Makati City
submitted the following data to the home office:
Petty cash fund
10,000
Sales
564,000
Sales returns
4,000
AR-Written Off
10,000
Shipments from Home office
300,000
AR, January 1, 2011
90,000
AR, December 31, 2011
100,000
Inventory, January 1, 2011
60,000
Inventory, December 31, 2011
70,000
Expenses (charged by H.O)
120,000
-Pray.Praise.PrayKDM