OLess allowance for doubtful accounts ………………..

1,050 32,950

Merchandise Inventory ……………………………………………. 44,500

Store furniture and fixtures ………………………………………… P12,000

Less accumulated depreciation ………………………. 3,950 8,050

Store furniture and fixtures-branch ……………………………… P 3,900

Less accumulated depreciation ……………………… 785 3,315

Branch office ………………………………………………………... 14,050

Total Assets ……………………………………………………

(a) Shipments from Home Office …………………………… 50,200
Home Office …………………………………………... 50,200

(b) Accounts Receivable ……………………………………. 60,000

Sales …………………………………………………….. 60,000

(c) Purchases …………………………………………………… 22,500

Accounts Paya

d. Branch Current . . . . . . . 2,600 Accounts Receivable - HO 2,600

Accounts Receivable 2,600 Home Office Current. . . . . . 2,600

1/1 – 1/31 Transaction with Outsiders

Accounts Receivable . . . 34,600 Accounts Receivable . . . 6,200

Sales.. . . . . . . . . . . . . . . 34,600 Sales.. . . . . . . . . . . . . . . 6,200

Cash. . . . . . . . . . . . . . . . . . 40,000 Cash . . . . . . . . . . . . . . . . . . . . . . 2,600

Accounts Receivable 40,000 Accounts Receivable . . . . . 2,600

 Purchases . . . . . . . . . . . . 31,600 Purchases. . . . . . . . . . . . . . . . . . 3,000

Accounts Payable . . 31,600 Accounts Payable. . . . . . . . 3,000

Accounts Payable . . . . . 36,200 Accounts Payable . .. . . . . . . . 1,450

Cash. . . . . . . . . . . . . . . 36.200 Cash. . . . . . . . . . . . . . . 1,450

Accrued expenses . . . . . 250 Expenses . .. . . . . . . . . . . . . . . . 1,250

Expenses. . . . . . . . . . . . . . 8,950 Cash. . . . . . . . . . . . . . .. . . . . 1,250

Cash. . . . . . . . . . . . . . . 9,200

1/1 – 1/31 Intercompany / INTER-OFFICE Transactions

Cash . . . . . . . . . . . . . . . . . . . . . . 1,600

Accts. Rec. – HO……………. 1,600

Allowance for D/A. . . . . 150 Home Office Current . . . . . . . . 150

Branch Current . . . . . . 150 Accts. Rec. – HO……………. 150

Shipment to branch ,cost 1,250 Home Office Current . . . . . . . . 1,250

Branch Current . . . . . . 1,250 Shipments from Home Office 1,250

Cash. . . . . . . . . . . . . . . . . 1,000 Home Office Current . . . . . . . . 1,000

Branch Current . . . . . . 1,000 Cash. . . . . . . . . . . . . . . . . . . 1,000

Adjusting Entries

a. Shipment to branch, cost 600 Home Office Current . . . . . . . . 600

 Branch Current . . . . . . 600 Shipments from Home Office 600

b. Branch Current . . . . . . .. 475 Expenses. . . . . . . . . . . . . . . . . . . 475

Expenses. . . . . . . . . . . 475 Home Office Current . . . . . . 475

c. Branch Current.. . . . . . .. 35 Expenses. . . . . . . . . . . . . . . . . . . 35

Acc. Deprec. SFF – Br. 35 Home Office Current . . . . . . 35

1,400

Income Summary ………………………………………………….. 1,400

Branch Income …………………………………………… Less allowance for doubtful accounts ……………….. 1,050 32,950

Merchandise Inventory ……………………………………………. 44,500

Store furniture and fixtures ………………………………………… P12,000

Less accumulated depreciation ………………………. 3,950 8,050

Store furniture and fixtures-branch ……………………………… P 3,900

Less accumulated depreciation ……………………… 785 3,315

Branch office ………………………………………………………... 14,050

Total Assets ……………………………………………………

(d) Shipments from Home Office …………………………… 50,200
Home Office …………………………………………... 50,200

(e) Accounts Receivable ……………………………………. 60,000

Sales …………………………………………………….. 60,000

(f) Purchases …………………………………………………… 22,500

 Accounts Paya

d. Branch Current . . . . . . . 2,600 Accounts Receivable - HO 2,600

Accounts Receivable 2,600 Home Office Current. . . . . . 2,600

1/1 – 1/31 Transaction with Outsiders

Accounts Receivable . . . 34,600 Accounts Receivable . . . 6,200

Sales.. . . . . . . . . . . . . . . 34,600 Sales.. . . . . . . . . . . . . . . 6,200

Cash. . . . . . . . . . . . . . . . . . 40,000 Cash . . . . . . . . . . . . . . . . . . . . . . 2,600

Accounts Receivable 40,000 Accounts Receivable . . . . . 2,600

Purchases . . . . . . . . . . . . 31,600 Purchases. . . . . . . . . . . . . . . . . . 3,000

Accounts Payable . . 31,600 Accounts Payable. . . . . . . . 3,000

Accounts Payable . . . . . 36,200 Accounts Payable . .. . . . . . . . 1,450

Cash. . . . . . . . . . . . . . . 36.200 Cash. . . . . . . . . . . . . . . 1,450

Accrued expenses . . . . . 250 Expenses . .. . . . . . . . . . . . . . . . 1,250

Expenses. . . . . . . . . . . . . . 8,950 Cash. . . . . . . . . . . . . . .. . . . . 1,250

Cash. . . . . . . . . . . . . . . 9,200

1/1 – 1/31 Intercompany / INTER-OFFICE Transactions

Cash . . . . . . . . . . . . . . . . . . . . . . 1,600

Accts. Rec. – HO……………. 1,600

 Allowance for D/A. . . . . 150 Home Office Current . . . . . . . . 150

Branch Current . . . . . . 150 Accts. Rec. – HO……………. 150

Shipment to branch ,cost 1,250 Home Office Current . . . . . . . . 1,250

Branch Current . . . . . . 1,250 Shipments from Home Office 1,250

Cash. . . . . . . . . . . . . . . . . 1,000 Home Office Current . . . . . . . . 1,000

Branch Current . . . . . . 1,000 Cash. . . . . . . . . . . . . . . . . . . 1,000

Adjusting Entries

a. Shipment to branch, cost 600 Home Office Current . . . . . . . . 600

Branch Current . . . . . . 600 Shipments from Home Office 600

b. Branch Current . . . . . . .. 475 Expenses. . . . . . . . . . . . . . . . . . . 475

Expenses. . . . . . . . . . . 475 Home Office Current . . . . . . 475

c. Branch Current.. . . . . . .. 35 Expenses. . . . . . . . . . . . . . . . . . . 35

Acc. Deprec. SFF – Br. 35 Home Office Current . . . . . . 35

1,400

Income Summary ………………………………………………….. 1,400

(a) Branch Income ……………………………………………

(b) Understatement of branch paid by home office for

December
 310

Expenses of branch paid by home office _______ ____215

P 60,900 P 57,740

Deductions:

Collection by home office of branch receivable 65

Correction of branch income for January 215

Merchandise transferred to Brentwood branch but incorrectly

charged by Beverly Hills branch
1,400

Merchandise returns to home office in transit 840

Uncollectible accounts of branch __1,200 _______

Corrected Balances P 57,460 P 57,460

2. (a) Entries to bring branch books up to date:

Correction in Income of Prior Periods 215

Home Office 215

Home Office 215

Income Summary 215

 Home Office 65

Accounts Receivable 65

(b) Entries to bring home office books up to date:

Beverly Hills Branch 1,225

Beverly Hills Branch Income 1,225

Beverly Hills Branch 310

Retained Earnings 310

Shipments to Beverly Hills Branch 1,400

Beverly Hills Branch 1,400

Brentwood Branch 1,400

Shipments to Brentwood Branch 1,400

(c) Understatement of branch paid by home office for

December
310

Expenses of branch paid by home office _______ ____215

P 60,900 P 57,740

Deductions:
 Collection by home office of branch receivable 65

Correction of branch income for January 215

Merchandise transferred to Brentwood branch but incorrectly

charged by Beverly Hills branch
1,400

Merchandise returns to home office in transit 840

Uncollectible accounts of branch __1,200 _______

Corrected Balances P 57,460 P 57,460

2. (a) Entries to bring branch books up to date:

Correction in Income of Prior Periods 215

Home Office 215

Home Office 215

Income Summary 215

Home Office 65

Accounts Receivable 65

(b) Entries to bring home office books up to date:

 Beverly Hills Branch 1,225

Beverly Hills Branch Income 1,225

Beverly Hills Branch 310

Home Office 65

Accounts Receivable 65

(b) Entries to bring home office books up to date:

Beverly Hills Branch 1,225

Beverly Hills Branch Income 1,225

Beverly Hills Branch 310

Retained Earnings 310

Shipments to Beverly Hills Branch 1,400

Beverly Hills Branch 1,400

Brentwood Branch 1,400

Shipments to Brentwood Branch 1,400

(d) Understatement of branch paid by home office for

December
 310

Expenses of branch paid by home office _______ ____215

P 60,900 P 57,740

Deductions:

Collection by home office of branch receivable 65

Correction of branch income for January 215

Merchandise transferred to Brentwood branch but incorrectly

charged by Beverly Hills branch
1,400

Merchandise returns to home office in transit 840

Uncollectible accounts of branch __1,200 _______

Corrected Balances P 57,460 P 57,460

2. (a) Entries to bring branch books up to date:

Correction in Income of Prior Periods 215

Home Office 215

Home Office 215

Income Summary 215

 Home Office 65

Accounts Receivable 65

(b) Entries to bring home office books up to date:

Beverly Hills Branch 1,225

Beverly Hills Branch Income 1,225

Beverly Hills Branch 310

Retained Earnings 310

Shipments to Beverly Hills Branch 1,400

Beverly Hills Branch 1,400

Brentwood Branch 1,400

Shipments to Brentwood Branch 1,400

(e) Understatement of branch paid by home office for

December
310

Expenses of branch paid by home office _______ ____215

P 60,900 P 57,740

Deductions:
 Collection by home office of branch receivable 65

Correction of branch income for January 215

Merchandise transferred to Brentwood branch but incorrectly

charged by Beverly Hills branch
1,400

Merchandise returns to home office in transit 840

Uncollectible accounts of branch __1,200 _______

Corrected Balances P 57,460 P 57,460

2. (a) Entries to bring branch books up to date:

Correction in Income of Prior Periods 215

Home Office 215

Home Office 215

Income Summary 215

Home Office 65

Accounts Receivable 65

(b) Entries to bring home office books up to date:

Beverly Hills Branch 1,225

Beverly Hills Branch Income 1,225

Beverly Hills Branch 310

Retained Earnings 310

Shipments to Beverly Hills Branch 1,400

Beverly Hills Branch 1,400

Brentwood Branch 1,400

Shipments to Brentwood Branch 1,400

(f) Understatement of branch paid by home office for

December
310

Expenses of branch paid by home office _______ ____215

P 60,900 P 57,740

Deductions:

Collection by home office of branch receivable 65

Correction of branch income for January 215

Merchandise transferred to Brentwood branch but incorrectly

charged by Beverly Hills branch
1,400
 Merchandise returns to home office in transit 840

Uncollectible accounts of branch __1,200 _______

Corrected Balances P 57,460 P 57,460

2. (a) Entries to bring branch books up to date:

Correction in Income of Prior Periods 215

Home Office 215

Home Office 215

Income Summary 215

Home Office 65

Accounts Receivable 65

(b) Entries to bring home office books up to date:

Beverly Hills Branch 1,225

Beverly Hills Branch Income 1,225

Beverly Hills Branch 310

 Retained Earnings 310

Shipments to Beverly Hills Branch 1,400

Beverly Hills Branch 1,400

Brentwood Branch 1,400

Shipments to Brentwood Branch 1,400

(g) ffice Books:

(a) Branch ………………………………………………………. 42,500

Cash ……………………………………………………. 42,500

(b) Branch ……………………………………………………… 50,200

Shipments to Branch ……………………………….. 50,200

(c) Accounts Receivable …………………………………... 105,000

Sales …………………………………………………… 105,000

(d) Purchases …………………………………………………. 122,500

Accounts Payable …………………………………. 122,500

(e) Cash ……………………………………………………….. 113,600

Accounts Receivable ……………………………… 113,600

(f) Accounts Payable ………………………………………. 124,000

Cash …………………………………………………… 124,000

(g) Expenses …………………………………………………… 26,600

Cash …………………………………………………… 26,600

(h) Cash ……………………………………………………….. 53,400

Branch ………………………………………………... 53,400
 (i) Retained Earnings ………………………………………. 10,000
Cash …………………………………………………... 10,000

BARTON CO.

Balance Sheet for Branch

December 31, 20x4

Assets Liabilities

Cash …………………………… P 4,250 Accounts Payable ………… P 10,250

Accounts Receivable ……… 12,600 Accrued Expenses …………… 300

Merchandise Inv……………... 23,500 Home Office ………………….. 37,900

Prepaid Expenses …………… 750

Furnitures & Fixtures …. P 8,000

Less accum. Depr …… 650 7,350

Total Assets …………………… P48,450 Total Liabilities ………………….P48,450

BARTON CO.

Income Statement for Branch

For Year Ended December 31, 19X6

Sales …………………………………………………………………………… P66,000

Cost of Goods Sold:

Purchases …………………………………………………………… P22,500

Shipments for home office ………………………………………. 50,200

Merchandise available for sale ………………………………… P72,700

Less Branch Books:

Expenses ………………………………………………………………. 650

Accumulated Depreciation – F&F………………………. 650
Sales …………………………………………………………………… 66,000
Merchandise Inventory ……………………………………………. 23,500
Income summary ………………………………………….. 89,500

Income Summary …………………………………………………… 90,900

Shipments from Home Office …………………………… 50,200
Purchases …………………………………………………… 22,500
Expenses …………………………………………………….. 18,200

Home Office ………………………………………………………… 1,400

Income Summary ………………………………………… 1,400

(a) Home Office Books

Expenses ………………………………………………………………. 1,180
Accumulated Depreciation – F&F………………………. 1,180

Sales …………………………………………………………………… 105,000

Merchandise Inventory ……………………………………………. 48,500

Shipments to Branch ……………………………………………….. 50,200

Income summary ………………………………………….. 203,700

Income Summary …………………………………………………… 190,250

 Merchandise Inventory …………………………………… 40,120

Purchases ……………………………………………………. 122,500

Expenses …………………………………………………….. 27,630

Branch Income ……………………………………………………… 1,400

Branch ………………………………………………………. Cash ……………………………………………………..

18,000

(h) Home Office Books:

(i) Office Books:

(j) Branch ………………………………………………………. 42,500

Cash ……………………………………………………. 42,500

(k) Branch ……………………………………………………… 50,200

Shipments to Branch ……………………………….. 50,200

(l) Accounts Receivable …………………………………... 105,000

Sales …………………………………………………… 105,000
(j) Home Office Books:
Cash …………………………………………………….. 18,000

(k) Home Office Books:

(m) Branch ………………………………………………………. 42,500

Cash ……………………………………………………. 42,500

(n) Branch ……………………………………………………… 50,200

Shipments to Branch ……………………………….. 50,200

(o) Accounts Receivable …………………………………... 105,000

Sales …………………………………………………… 105,000

(p) Purchases …………………………………………………. 122,500

Accounts Payable …………………………………. 122,500
 (q) Cash ……………………………………………………….. 113,600
Accounts Receivable ……………………………… 113,600

(r) Accounts Payable ………………………………………. 124,000

Cash …………………………………………………… 124,000

(s) Expenses …………………………………………………… 26,600

Cash …………………………………………………… 26,600

(t) Cash ……………………………………………………….. 53,400

Branch ………………………………………………... 53,400

(u) Retained Earnings ………………………………………. 10,000

Cash …………………………………………………... 10,000

BARTON CO.

Balance Sheet for Branch

December 31, 20x4

Assets Liabilities

Cash …………………………… P 4,250 Accounts Payable ………… P 10,250

Accounts Receivable ……… 12,600 Accrued Expenses …………… 300

Merchandise Inv……………... 23,500 Home Office ………………….. 37,900

Prepaid Expenses …………… 750

Furnitures & Fixtures …. P 8,000

Less accum. Depr …… 650 7,350

Total Assets …………………… P48,450 Total Liabilities ………………….P48,450

 BARTON CO.

Income Statement for Branch

For Year Ended December 31, 19X6

Sales …………………………………………………………………………… P66,000

Cost of Goods Sold:

Purchases …………………………………………………………… P22,500

Shipments for home office ………………………………………. 50,200

Merchandise available for sale ………………………………… P72,700

Less merchandise inv, December 31 ………………………….. 23,500

Cost of Goods Sold ……………………………………………….. 49,200

Gross Profit ……………………………………………………………………. P16,800

Expenses ……………………………………………………………………… 18,200

Net loss ………………………………………………………………………... P 1,400

BARTON CO.

Income Statement for Branch

For Year Ended December 31, 20x4

Assets Liabilities & Stockholders’ Equity

Cash …………………………….. P 23,200 Liabilities
Accounts Receivable ……….. 19,050 Accounts payable ………… P 21,300
Merchandise Inventory……… 48,500 Accrued Expenses …………. 1,350 P22,650
Prepaid Expenses ……………. 2,050 Stockholders Equity
Furniture & Fixtures …. P 20,000 Capital stock, P20 par……… P50,000
Less accum. Depr….. 5,580 14,420 Retained Earnings …………. 72,740 122,470
Branch ………………………… 37,900 Total liabilities and stockholders’
Total Assets …………………... P145,120 equity ………………… P145,120

BARTON CO.

Income Statement for Home Office

For Year Ended December 31, 20x4

Sales ……………………………………………………………………………....... P105,000

Cost of goods sold:

Merchandise inventory, January 1 …………………………………. P 40,120

Purchases ………………………………………………………………... 122,500

Merchandise available for sale ……………………………………… P162,620

Less shipments to branch ……………………………………………... 50,200

Merchandise available for own sale ……………………………….. P112,420

Less merchandise inventory, December 31 ………………………. 48,500

Cost of Goods Sold ……………………………………………………. 63,920

Gross Profit ………………………………………………………………………… P 41,080

Expenses …………………………………………………………………………… 27,630

Net income from own operations …………………………………………….. P 13,450

Deduct branch net loss …………………………………………………………. 1,400

Total Income ………………………………………………………………………. P 12,050

BARTON CO.

Income Statement for Home Office

For Year Ended December 31, 20x4

Sales …………………………………………………………………………………. P171,000

Cost of goods sold:

Merchandise inventory, January 1 ………………………………….. P 40,120

Purchases ………………………………………………………………… 145,000

Merchandise available for sale ……………………………………… P185,120

Less merchandise inventory, December 31 ……………………….. 72,000

Cost of goods sold ………………………………………………………. 113,120

Gross profit ………………………………………………………………………….. P 57,880

Expenses …………………………………………………………………………….. 45,830

Net Income …………………………………………………………………………. P 12,050

(b) Branch Books:
Expenses ………………………………………………………………. 650
Accumulated Depreciation – F&F………………………. 650
Sales …………………………………………………………………… 66,000
Merchandise Inventory ……………………………………………. 23,500
Income summary ………………………………………….. 89,500

Income Summary …………………………………………………… 90,900

Shipments from Home Office …………………………… 50,200
Purchases …………………………………………………… 22,500
Expenses …………………………………………………….. 18,200

Home Office ………………………………………………………… 1,400

Income Summary ………………………………………… 1,400

(c) Home Office Books

Expenses ………………………………………………………………. 1,180
Accumulated Depreciation – F&F………………………. 1,180

Sales …………………………………………………………………… 105,000

Merchandise Inventory ……………………………………………. 48,500

Shipments to Branch ……………………………………………….. 50,200

Income summary ………………………………………….. 203,700

Income Summary …………………………………………………… 190,250

Merchandise Inventory …………………………………… 40,120

Purchases ……………………………………………………. 122,500

Expenses …………………………………………………….. 27,630

 Branch Income ……………………………………………………… 1,400

Branch ………………………………………………………. Cash ……………………………………………………..

18,000

(l) Home Office Books:

(v) Branch ………………………………………………………. 42,500

Cash ……………………………………………………. 42,500

(w) Branch ……………………………………………………… 50,200

Shipments to Branch ……………………………….. 50,200

(x) Accounts Receivable …………………………………... 105,000

Sales …………………………………………………… 105,000

(y) Purchases …………………………………………………. 122,500

Accounts Payable …………………………………. 122,500

(z) Cash ……………………………………………………….. 113,600

Accounts Receivable ……………………………… 113,600

(aa) Accounts Payable ………………………………………. 124,000

Cash …………………………………………………… 124,000

(bb) Expenses …………………………………………………… 26,600

Cash …………………………………………………… 26,600

(cc) Cash ……………………………………………………….. 53,400

Branch ………………………………………………... 53,400

(dd) Retained Earnings ………………………………………. 10,000

Cash …………………………………………………... 10,000

BARTON CO.

Balance Sheet for Branch

December 31, 20x4

 Assets Liabilities

Cash …………………………… P 4,250 Accounts Payable ………… P 10,250

Accounts Receivable ……… 12,600 Accrued Expenses …………… 300

Merchandise Inv……………... 23,500 Home Office ………………….. 37,900

Prepaid Expenses …………… 750

Furnitures & Fixtures …. P 8,000

Less accum. Depr …… 650 7,350

Total Assets …………………… P48,450 Total Liabilities ………………….P48,450

BARTON CO.

Income Statement for Branch

For Year Ended December 31, 19X6

Sales …………………………………………………………………………… P66,000

Cost of Goods Sold:

Purchases …………………………………………………………… P22,500

Shipments for home office ………………………………………. 50,200

Merchandise available for sale ………………………………… P72,700

Less merchandise inv, December 31 ………………………….. 23,500

 Cost of Goods Sold ……………………………………………….. 49,200

Gross Profit ……………………………………………………………………. P16,800

Expenses ……………………………………………………………………… 18,200

Net loss ………………………………………………………………………... P 1,400

BARTON CO.

Income Statement for Branch

For Year Ended December 31, 20x4

Assets Liabilities & Stockholders’ Equity

Cash …………………………….. P 23,200 Liabilities

Accounts Receivable ……….. 19,050 Accounts payable ………… P 21,300
Merchandise Inventory……… 48,500 Accrued Expenses …………. 1,350 P22,650
Prepaid Expenses ……………. 2,050 Stockholders Equity
Furniture & Fixtures …. P 20,000 Capital stock, P20 par……… P50,000
Less accum. Depr….. 5,580 14,420 Retained Earnings …………. 72,740 122,470
Branch ………………………… 37,900 Total liabilities and stockholders’
Total Assets …………………... P145,120 equity ………………… P145,120

BARTON CO.

Income Statement for Home Office

For Year Ended December 31, 20x4

Sales ……………………………………………………………………………....... P105,000

Cost of goods sold:

Merchandise inventory, January 1 …………………………………. P 40,120

Purchases ………………………………………………………………... 122,500

Merchandise available for sale ……………………………………… P162,620

Less shipments to branch ……………………………………………... 50,200

Merchandise available for own sale ……………………………….. P112,420

Less merchandise inventory, December 31 ………………………. 48,500

Cost of Goods Sold ……………………………………………………. 63,920

Gross Profit ………………………………………………………………………… P 41,080

Expenses …………………………………………………………………………… 27,630

Net income from own operations …………………………………………….. P 13,450

Deduct branch net loss …………………………………………………………. 1,400

Total Income ………………………………………………………………………. P 12,050

Income Summary …………………………………………………… 190,250

Merchandise Inventory …………………………………… 40,120

Purchases ……………………………………………………. 122,500

Expenses …………………………………………………….. 27,630

Branch Income ……………………………………………………… 1,400

 Branch ………………………………………………………. Cash ……………………………………………………..
18,000

(m) Home Office Books:

(ee) Branch ………………………………………………………. 42,500

Cash ……………………………………………………. 42,500

(ff) Branch ……………………………………………………… 50,200

Shipments to Branch ……………………………….. 50,200

(gg) Accounts Receivable …………………………………... 105,000

Sales …………………………………………………… 105,000

(hh) Purchases …………………………………………………. 122,500

Accounts Payable …………………………………. 122,500

(ii) Cash ……………………………………………………….. 113,600

Accounts Receivable ……………………………… 113,600

(jj) Accounts Payable ………………………………………. 124,000

Cash …………………………………………………… 124,000

(kk) Expenses …………………………………………………… 26,600

Cash …………………………………………………… 26,600

(ll) Cash ……………………………………………………….. 53,400

Branch ………………………………………………... 53,400

(mm) Retained Earnings ………………………………………. 10,000

Cash …………………………………………………... 10,000

BARTON CO.

Balance Sheet for Branch

December 31, 20x4

 Assets Liabilities

Cash …………………………… P 4,250 Accounts Payable ………… P 10,250

Accounts Receivable ……… 12,600 Accrued Expenses …………… 300

Merchandise Inv……………... 23,500 Home Office ………………….. 37,900

Prepaid Expenses …………… 750

Furnitures & Fixtures …. P 8,000

Less accum. Depr …… 650 7,350

Total Assets …………………… P48,450 Total Liabilities ………………….P48,450

BARTON CO.

Income Statement for Branch

For Year Ended December 31, 19X6

Sales …………………………………………………………………………… P66,000

Cost of Goods Sold:

Purchases …………………………………………………………… P22,500

Shipments for home office ………………………………………. 50,200

Merchandise available for sale ………………………………… P72,700

Less merchandise inv, December 31 ………………………….. 23,500

Cost of Goods Sold ……………………………………………….. 49,200

Gross Profit ……………………………………………………………………. P16,800

Expenses ……………………………………………………………………… 18,200

Net loss ………………………………………………………………………... P 1,400

BARTON CO.

Income Statement for Branch

For Year Ended December 31, 20x4

Assets Liabilities & Stockholders’ Equity

Cash …………………………….. P 23,200 Liabilities

Accounts Receivable ……….. 19,050 Accounts payable ………… P 21,300
Merchandise Inventory……… 48,500 Accrued Expenses …………. 1,350 P22,650
Prepaid Expenses ……………. 2,050 Stockholders Equity
Furniture & Fixtures …. P 20,000 Capital stock, P20 par……… P50,000
Less accum. Depr….. 5,580 14,420 Retained Earnings …………. 72,740 122,470
Branch ………………………… 37,900 Total liabilities and stockholders’
Total Assets …………………... P145,120 equity ………………… P145,120

BARTON CO.

Income Statement for Home Office

For Year Ended December 31, 20x4

Sales ……………………………………………………………………………....... P105,000

Cost of goods sold:

 Merchandise inventory, January 1 …………………………………. P 40,120

Purchases ………………………………………………………………... 122,500

Merchandise available for sale ……………………………………… P162,620

Less shipments to branch ……………………………………………... 50,200

Merchandise available for own sale ……………………………….. P112,420

Less merchandise inventory, December 31 ………………………. 48,500

Cost of Goods Sold ……………………………………………………. 63,920

Gross Profit ………………………………………………………………………… P 41,080

Expenses …………………………………………………………………………… 27,630

Net income from own operations …………………………………………….. P 13,450

Deduct branch net loss …………………………………………………………. 1,400

Total Income ………………………………………………………………………. P 12,050

BARTON CO.

Income Statement for Home Office

For Year Ended December 31, 20x4

Sales …………………………………………………………………………………. P171,000

Cost of goods sold:

Merchandise inventory, January 1 ………………………………….. P 40,120

 Purchases ………………………………………………………………… 145,000

Merchandise available for sale ……………………………………… P185,120

Less merchandise inventory, December 31 ……………………….. 72,000

Cost of goods sold ………………………………………………………. 113,120

Gross profit ………………………………………………………………………….. P 57,880

Expenses …………………………………………………………………………….. 45,830

Net Income …………………………………………………………………………. P 12,050

(d) Branch Books:

Expenses ………………………………………………………………. 650
Accumulated Depreciation – F&F………………………. 650
Sales …………………………………………………………………… 66,000
Merchandise Inventory ……………………………………………. 23,500
Income summary ………………………………………….. 89,500

Income Summary …………………………………………………… 90,900

Shipments from Home Office …………………………… 50,200
Purchases …………………………………………………… 22,500
Expenses …………………………………………………….. 18,200

Home Office ………………………………………………………… 1,400

Income Summary ………………………………………… 1,400

(e) Home Office Books

Expenses ………………………………………………………………. 1,180
Accumulated Depreciation – F&F………………………. 1,180

Sales …………………………………………………………………… 105,000

Merchandise Inventory ……………………………………………. 48,500

 Shipments to Branch ……………………………………………….. 50,200

Income summary ………………………………………….. 203,700

Income Summary …………………………………………………… 190,250

Merchandise Inventory …………………………………… 40,120

Purchases ……………………………………………………. 122,500

Expenses …………………………………………………….. 27,630

Branch Income ……………………………………………………… 1,400

Branch ………………………………………………………. Problem V continued

Credits
Accumulated Depreciation – Furniture
And Fixtures ……………………… 2,585 576 ……….. ……….. ……….. ……….. ……….. 3,161
Unrealized Intercompany Inventory ……….. ……….. (b) 1,700 ……….. ……….. ……….. ……….. ………..
Profit ………………………………. 3,700 ……….. (c) 2,000 ……….. ……….. ……….. ……….. ………..
……….. ……….. ……….. ………..
Salaries and Commissions Expense . 4,250 2,350 ……….. 6,600 ……….. ……….. ……….. ………..
Store Supplies Expense ………………. 560 280 ……….. 840 ……….. ……….. ……….. ………..
Miscellaneous Selling Expense …….. 1,850 1,050 ……….. 2,900 ……….. ……….. ……….. ………..
Rent Expense ………………………….. 2,700 1,500 ……….. 4,200 ……….. ……….. ……….. ………..
Depreciation Expense – F&F ……….. 85 36 ……….. 121 ……….. ……….. ……….. ………..
Miscellaneous General Expense ….. 2,510 95 ……….. 3,415 ……….. ……….. ……….. ………..
160,295 57,141 ……….. ……….. ……….. ……….. ……….. ………..
Merchandise Inv, Dec 31 …………… 24,900 14,600 ……….. (d) 1,950 ……….. ……….. 36,850 ………..
Problem V
SPENCER CO.
Work Sheet for Combined Statements for Home Office and Branch
December 31, 20x5

Adjustments Income Balance

Home and Eliminations Statement Sheet
Office Branch Dr. Cr. Dr. Cr. Dr. Cr.

Debits
Cash …………………………………….. 10,350 2,650 ……….. ……….. ……….. ……….. 13,100 ………..
Cash in Transit …………………………. 1,500 …….. ……….. ……….. ……….. ……….. 1,500 ………..
Accounts Receivable ………………. 26,200 12,850 ……….. ……….. ……….. ……….. 39,050 ………..
Merchandise Inv. Dec 1 ……………. 31,500 14,400 (c) 2,000 43,900 ……….. ……….. ……….. ………..
Store Supplies …………………………. 380 300 ……….. ……….. ……….. ……….. 580 ………..
Prepaid Expenses ……………………. 350 120 ……….. ……….. ……….. ……….. 470 ………..
Furniture & Fixtures …………………… 8,500 3,600 ……….. ……….. ……….. ……….. 12,700 ………..
Branch…………………………………… 32,260 ……… (a) ……….. 32,260 ……….. ……….. ……….. ………..
Retained Earnings ……………………. 6,850 ……… ……….. ……….. ……….. ……….. 6,850 ………..
Purchases ………………………………. 27,600 4,100 ……….. ……….. ……….. ……….. ……….. ………..
Shipments from Home Office ………………… 10,200 (b) 10,200 ……….. ……….. ……….. ……….. ………..
Advertising Expense …………………. 2,850 2,800 ……….. 5,650 ……….. ……….. ……….. ………..
Salaries and Commissions Expense . 4,250 2,350 ……….. 6,600 ……….. ……….. ……….. ………..
Store Supplies Expense ………………. 560 280 ……….. 840 ……….. ……….. ……….. ………..
Miscellaneous Selling Expense …….. 1,850 1,050 ……….. 2,900 ……….. ……….. ……….. ………..
Rent Expense ………………………….. 2,700 1,500 ……….. 4,200 ……….. ……….. ……….. ………..
Depreciation Expense – F&F ……….. 85 36 ……….. 121 ……….. ……….. ……….. ………..
Miscellaneous General Expense ….. 2,510 95 ……….. 3,415 ……….. ……….. ……….. ………..
160,295 57,141 ……….. ……….. ……….. ……….. ……….. ………..
Merchandise Inv, Dec 31 …………… 24,900 14,600 ……….. (d) 1,950 ……….. ……….. 36,850 ………..
Problem V
SPENCER CO.
Work Sheet for Combined Statements for Home Office and Branch
December 31, 20x5

Adjustments Income Balance

Home and Eliminations Statement Sheet
Office Branch Dr. Cr. Dr. Cr. Dr. Cr.

Debits
Cash …………………………………….. 10,350 2,650 ……….. ……….. ……….. ……….. 13,100 ………..
Cash in Transit …………………………. 1,500 …….. ……….. ……….. ……….. ……….. 1,500 ………..
Accounts Receivable ………………. 26,200 12,850 ……….. ……….. ……….. ……….. 39,050 ………..
Merchandise Inv. Dec 1 ……………. 31,500 14,400 (c) 2,000 43,900 ……….. ……….. ……….. ………..
Store Supplies …………………………. 380 300 ……….. ……….. ……….. ……….. 580 ………..
Prepaid Expenses ……………………. 350 120 ……….. ……….. ……….. ……….. 470 ………..
Furniture & Fixtures …………………… 8,500 3,600 ……….. ……….. ……….. ……….. 12,700 ………..
Branch…………………………………… 32,260 ……… (a) ……….. 32,260 ……….. ……….. ……….. ………..
Retained Earnings ……………………. 6,850 ……… ……….. ……….. ……….. ……….. 6,850 ………..
Purchases ………………………………. 27,600 4,100 ……….. ……….. ……….. ……….. ……….. ………..
Shipments from Home Office ………………… 10,200 (b) 10,200 ……….. ……….. ……….. ……….. ………..
Advertising Expense …………………. 2,850 2,800 ……….. 5,650 ……….. ……….. ……….. ………..
Salaries and Commissions Expense . 4,250 2,350 ……….. 6,600 ……….. ……….. ……….. ………..
Store Supplies Expense ………………. 560 280 ……….. 840 ……….. ……….. ……….. ………..
Miscellaneous Selling Expense …….. 1,850 1,050 ……….. 2,900 ……….. ……….. ……….. ………..
Rent Expense ………………………….. 2,700 1,500 ……….. 4,200 ……….. ……….. ……….. ………..
Depreciation Expense – F&F ……….. 85 36 ……….. 121 ……….. ……….. ……….. ………..
Miscellaneous General Expense ….. 2,510 95 ……….. 3,415 ……….. ……….. ……….. ………..
160,295 57,141 ……….. ……….. ……….. ……….. ……….. ………..
Merchandise Inv, Dec 31 …………… 24,900 14,600 ……….. (d) 1,950 ……….. ……….. 36,850 ………..
Problem V
SPENCER CO.
Work Sheet for Combined Statements for Home Office and Branch
December 31, 20x5

Adjustments Income Balance

Home and Eliminations Statement Sheet
Office Branch Dr. Cr. Dr. Cr. Dr. Cr.

Debits
Cash …………………………………….. 10,350 2,650 ……….. ……….. ……….. ……….. 13,100 ………..
Cash in Transit …………………………. 1,500 …….. ……….. ……….. ……….. ……….. 1,500 ………..
Accounts Receivable ………………. 26,200 12,850 ……….. ……….. ……….. ……….. 39,050 ………..
Merchandise Inv. Dec 1 ……………. 31,500 14,400 (c) 2,000 43,900 ……….. ……….. ……….. ………..
Store Supplies …………………………. 380 300 ……….. ……….. ……….. ……….. 580 ………..
Prepaid Expenses ……………………. 350 120 ……….. ……….. ……….. ……….. 470 ………..
Furniture & Fixtures …………………… 8,500 3,600 ……….. ……….. ……….. ……….. 12,700 ………..
Branch…………………………………… 32,260 ……… (a) ……….. 32,260 ……….. ……….. ……….. ………..
Retained Earnings ……………………. 6,850 ……… ……….. ……….. ……….. ……….. 6,850 ………..
Purchases ………………………………. 27,600 4,100 ……….. ……….. ……….. ……….. ……….. ………..
Shipments from Home Office ………………… 10,200 (b) 10,200 ……….. ……….. ……….. ……….. ………..
Advertising Expense …………………. 2,850 2,800 ……….. 5,650 ……….. ……….. ……….. ………..
Salaries and Commissions Expense . 4,250 2,350 ……….. 6,600 ……….. ……….. ……….. ………..
Store Supplies Expense ………………. 560 280 ……….. 840 ……….. ……….. ……….. ………..
Miscellaneous Selling Expense …….. 1,850 1,050 ……….. 2,900 ……….. ……….. ……….. ………..
Rent Expense ………………………….. 2,700 1,500 ……….. 4,200 ……….. ……….. ……….. ………..
Depreciation Expense – F&F ……….. 85 36 ……….. 121 ……….. ……….. ……….. ………..
Miscellaneous General Expense ….. 2,510 95 ……….. 3,415 ……….. ……….. ……….. ………..
160,295 57,141 ……….. ……….. ……….. ……….. ……….. ………..
Merchandise Inv, Dec 31 …………… 24,900 14,600 ……….. (d) 1,950 ……….. ……….. 36,850 ………..
Problem V
SPENCER CO.
Work Sheet for Combined Statements for Home Office and Branch
December 31, 20x5

Adjustments Income Balance

Home and Eliminations Statement Sheet
Office Branch Dr. Cr. Dr. Cr. Dr. Cr.

Debits
Cash …………………………………….. 10,350 2,650 ……….. ……….. ……….. ……….. 13,100 ………..
Cash in Transit …………………………. 1,500 …….. ……….. ……….. ……….. ……….. 1,500 ………..
Accounts Receivable ………………. 26,200 12,850 ……….. ……….. ……….. ……….. 39,050 ………..
Merchandise Inv. Dec 1 ……………. 31,500 14,400 (c) 2,000 43,900 ……….. ……….. ……….. ………..
Store Supplies …………………………. 380 300 ……….. ……….. ……….. ……….. 580 ………..
Prepaid Expenses ……………………. 350 120 ……….. ……….. ……….. ……….. 470 ………..
Furniture & Fixtures …………………… 8,500 3,600 ……….. ……….. ……….. ……….. 12,700 ………..
Branch…………………………………… 32,260 ……… (a) ……….. 32,260 ……….. ……….. ……….. ………..
Retained Earnings ……………………. 6,850 ……… ……….. ……….. ……….. ……….. 6,850 ………..
Purchases ………………………………. 27,600 4,100 ……….. ……….. ……….. ……….. ……….. ………..
Shipments from Home Office ………………… 10,200 (b) 10,200 ……….. ……….. ……….. ……….. ………..
Advertising Expense …………………. 2,850 2,800 ……….. 5,650 ……….. ……….. ……….. ………..
Salaries and Commissions Expense . 4,250 2,350 ……….. 6,600 ……….. ……….. ……….. ………..
Store Supplies Expense ………………. 560 280 ……….. 840 ……….. ……….. ……….. ………..
Miscellaneous Selling Expense …….. 1,850 1,050 ……….. 2,900 ……….. ……….. ……….. ………..
Rent Expense ………………………….. 2,700 1,500 ……….. 4,200 ……….. ……….. ……….. ………..
Depreciation Expense – F&F ……….. 85 36 ……….. 121 ……….. ……….. ……….. ………..
Miscellaneous General
Accounts Payable ……………… 36,400 4,200 ……….. ……….. ……….. ……….. ……….. 39,000
Accrued Expenses ……………... 260 105 ……….. ……….. ……….. ……….. ……….. 365
Home Office …………………….. ……….. 32,250 (a) 32,260 ……….. ……….. ……….. ……….. ………..
Capital Stock …………………… 65,000 ……….. ……….. ……….. ……….. ……….. ……….. 65,000
Sales ……………………………… 44,850 20,000 ……….. ……….. ……….. 64,850 ……….. ………..
Shipments to Branch …………... 8,500 ……… Problem V
SPENCER CO.
Work Sheet for Combined Statements for Home Office and Branch
December 31, 20x5

Adjustments Income Balance

Home and Eliminations Statement Sheet
Office Branch Dr. Cr. Dr. Cr. Dr. Cr.

Debits
Cash …………………………………….. 10,350 2,650 ……….. ……….. ……….. ……….. 13,100 ………..
Cash in Transit …………………………. 1,500 …….. ……….. ……….. ……….. ……….. 1,500 ………..
Accounts Receivable ………………. 26,200 12,850 ……….. ……….. ……….. ……….. 39,050 ………..
Merchandise Inv. Dec 1 ……………. 31,500 14,400 (c) 2,000 43,900 ……….. ……….. ……….. ………..
Store Supplies …………………………. 380 300 ……….. ……….. ……….. ……….. 580 ………..
Prepaid Expenses ……………………. 350 120 ……….. ……….. ……….. ……….. 470 ………..
Furniture & Fixtures …………………… 8,500 3,600 ……….. ……….. ……….. ……….. 12,700 ………..
Branch…………………………………… 32,260 ……… (a) ……….. 32,260 ……….. ……….. ……….. ………..
Retained Earnings ……………………. 6,850 ……… ……….. ……….. ……….. ……….. 6,850 ………..
Purchases ………………………………. 27,600 4,100 ……….. ……….. ……….. ……….. ……….. ………..
Shipments from Home Office ………………… 10,200 (b) 10,200 ……….. ……….. ……….. ……….. ………..
Advertising Expense …………………. 2,850 2,800 ……….. 5,650 Accounts Payable ……………… 36,400 4,200 ………..
……….. ……….. ……….. ……….. 39,000
Accrued Expenses ……………... 260 105 ……….. ……….. ……….. ……….. ……….. 365
Home Office …………………….. ……….. 32,250 (a) 32,260 ……….. ……….. ……….. ……….. ………..
Capital Stock …………………… 65,000 ……….. ……….. ……….. ……….. ……….. ……….. 65,000
Sales
Branch…………………………………… 32,260 ……… (a) ……….. 32,260 ……….. ……….. ……….. ………..
Retained Earnings ……………………. 6,850 ……… ……….. ……….. ……….. ……….. 6,850 ………..
Purchases ………………………………. 27,600 4,100 ……….. ……….. ……….. ……….. ……….. ………..
Shipments from Home Office ………………… 10,200 (b) 10,200 ……….. ……….. ……….. ……….. ………..

Advertising Expense …………………. 2,850 2,800 ……….. 5,650