Accounting 7 Agency/Home Office Problem 1: A) Agency Profit Is Determined Separately B) Agency Profit Is Not Determined Separately
Accounting 7 Agency/Home Office Problem 1: A) Agency Profit Is Determined Separately B) Agency Profit Is Not Determined Separately
Accounting 7 Agency/Home Office Problem 1: A) Agency Profit Is Determined Separately B) Agency Profit Is Not Determined Separately
Agency/Home Office
Problem 1:
A) Agency profit is determined separately b) agency profit is not determined separately
2018 2018
May 1-Working Fund – QC agency P 10,000 May 1-Working Fund – QC agency P 10,000
Samples Inventory – QC agency 50,000 Samples Inventory – QC agency 50,000
Cash P 10,000 Cash P10,000
Shipments of Merchandise- Shipments of Merchandise-
QC agency 50,000 QC agency 50,000
Working fund established Working fund established
& samples shipped to agency. & samples shipped to agency.
- Furniture & Fixtures – QC agency 24,000 - Furniture & Fixtures – QC agency 24,000
Expenses – QC agency 15,500 Expenses 15,500
Furniture & Fixtures 24,000 Furniture & Fixtures 24,000
Cash 15,500 Cash 15,500
Disbursements chargeable Disbursements chargeable
to agency. to agency.
31 – Sales 176,000
Cost of Sales – QC agency 105,000
Expenses – QC agency 25,150
Samples Expense – QC agency 3,750
Income Summary – QC agency 42,100
To close nominal accounts
to agency income summary
account.
Purchases 950,000
Accounts Payable 950,000
purchases
Cash 800,000
Notes receivable 150,000
Accounts receivable 950,000
Collection
Problem 4:
10. Shipment to Lipa 32,000 Home Office 40,700 Shipment from HO 40,000
Shipment to SP 32,000 Shipment from HO 40,000 Freight in 550
Mdse from Lipa to San Pablo Freight in 500 Home Office 40,550
Cash 200
San Pablo Branch 40,550 Mdse shipped to SP
Interbranch transfer-
Freight expense 150
Lipa Bramch 40,700
Mdse transfer from Lipa to San Pablo
Problem 6:
Home Office Branch 1 Branch 2
1. Branch 1 25,000 Shipment from HO 25,000 Shipment from HO 33,000
Branch 2 33,000 Home Office 25,000 Home Office 33,000
Shipment to 25,000 Shipmnet from HO Ship’t. from HO
Branch1
Shipment to 33,000
Branch2
Shipment to
B1,B2
Correcting Entry:
Branch 1 9,200 Branch 2 9,200 Home Office 9,200
Branch 2 9,200 Home Office 9,200 Branch 1 9,200
#
Branch 2 Branch 1
12,500 18,000 18,000 12,500
3,700 3,700
12,500 21,700 21,700 12,500
Problem 8:
Home Office Branch Books
1) Inv. In Branch 280,000 Shipment from HO 280,000
Shipment to Branch 200,000 Home Office 280,000
Allo. for O of BI 80,000 Shipmnet from HO
shipment
Allowance for O of BI
76,000 – cost of sales Beg. Invty 12,000 Or:
Shipment 80,000 Mdse Inventory @ billed price 56,000
76,000 92,000 Mdse Inventory @ cost 40,000
Bal. 76,000 Allo. for O of BI balance, end 16,000