AC 3101 Discussion Problem
AC 3101 Discussion Problem
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
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