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    Yohann Leonard Huan
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    This document contains information from the trial balances of Bonachita Company and its Cebu Branch for the year ending December 31, 2017. It includes line items for shipments between the home office and branch, purchases, merchandise inventory at beginning and end of year for both entities, sales, and expenses. It also provides additional information about the branch's ending inventory acquired from other vendors. The document asks four questions related to calculating the branch's net income from the perspective of the home office, the realized allowance, and the branch's beginning inventory cost from the home office. The document also includes information from the records of Faith Corporation and its Cebu Branch for 2016, including sales, inventory balances at beginning and end of year split

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    This document contains information from the trial balances of Bonachita Company and its Cebu Branch for the year ending December 31, 2017. It includes line items for shipments between the home office and branch, purchases, merchandise inventory at beginning and end of year for both entities, sales, and expenses. It also provides additional information about the branch's ending inventory acquired from other vendors. The document asks four questions related to calculating the branch's net income from the perspective of the home office, the realized allowance, and the branch's beginning inventory cost from the home office. The document also includes information from the records of Faith Corporation and its Cebu Branch for 2016, including sales, inventory balances at beginning and end of year split

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    © All Rights Reserved
    Download as PDF, TXT or read online from Scribd
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    157 views1 page

    AC 3101 Discussion Problem

    Uploaded by

    Yohann Leonard Huan
    This document contains information from the trial balances of Bonachita Company and its Cebu Branch for the year ending December 31, 2017. It includes line items for shipments between the home office and branch, purchases, merchandise inventory at beginning and end of year for both entities, sales, and expenses. It also provides additional information about the branch's ending inventory acquired from other vendors. The document asks four questions related to calculating the branch's net income from the perspective of the home office, the realized allowance, and the branch's beginning inventory cost from the home office. The document also includes information from the records of Faith Corporation and its Cebu Branch for 2016, including sales, inventory balances at beginning and end of year split

    Copyright:

    © All Rights Reserved
    Download as PDF, TXT or read online from Scribd
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    of 1

    Problem 1.

    Presented below are items taken from the unadjusted trial balances of Bonachita Company
    and its Cebu Branch on December 31, 2017.
    Home Office Books Branch Books
    Shipment to Branch P2,250,000
    AFOVOBI 749,250
    Shipment from HO P2,925,000
    Purchases 1,084,500
    MI, January 1 921,375
    MI, December 31 365,625
    Sales 4,800,000
    Expenses 382,500
    Assuming that the branch ending inventory acquired from other vendors is P73,125.
    1. What is the net income/(loss) of the branch insofar as the home office in concerned?
    2. How much is the realized allowance?
    3. What is the branch beginning inventory at cost from Home Office?

    Problem 3
    Javier, Inc. has a Branch in Boracay established on April 1, 2017. During the year 2017, the
    Javier shipped merchandise to the Branch at billed value of P100,000 which was 25% above
    cost. At the end of the year, Branch reported sales of P160,000, operating expenses of
    P76,000, and a net income from operations of P12,000. 26,400

    4. The true income of the Branch was?

    Problem 4
    The following data were taken from the records of Faith Corporation of Manila and its Cebu
    Branch for 2016:
    Home Office Books Branch Books
    Sales P424,00 P126,000
    Inventory, Jan. 1 46,000 17,800
    Purchases 328,000 36,000
    Shipment to branch 84,000
    Shipment from Home Office 100,800
    Inventory, Dec. 31 (20% from Other 29,250
    vendors)
    Inventory, Dec. 31 57,000
    Expenses 152,800 40,600
    In 2016, Home Office billed the Branch at 120% of cost which was lower by 5% than last
    year’s.

    9. The combined net income/(loss) of the Home Office and the Branch for 2016 was?
    10. The net income/(loss) of the branch insofar as the Home office is concern?
    11. How much is the unadjusted allowance?

    1
    “Most great people have attained their greatest success just on step beyond their greatest failure”
    – Napolean Hill Lucio

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