Transactions for the first 3-month period of calendar year 2021 for Sta Cruz Branch of XYZCompany.1. Home Office put up a branch with initial investment of cash 400,000; and equipment180,000, and furniture & fixtures, 100,000, both to be booked in the branch.2. Home office purchased equipment for use by the branch and to be carried in the HomeOffice books. Acquisition cost is 80,000.3. Branch purchased 160,000 worth of merchandise for 50% cash and balance on account.Delivery charge of 3,000 paid by the branch.4. Home Office ordered office table and chairs worth 20,000 to be carried in branch books.The branch paid cash for the items upon delivery directly to the branch. Delivery chargeof 800 was also paid by the branch.5. Branch purchased computers and printers worth 110,000 for use of the branch and tobe booked in the Home Office.6. Home Office transferred merchandise worth 320,000. Home Office paid for the freightof 5,000 to be taken up in branch books.7. Branch total sales to date on account is 600,000 and cash 100,000.8. Home Office collected 100,000 from Branch's customers on account.9. Branch collected 460,000 from customers on account.10. Branch share from Home Office in advertising and office supplies expenses are 10,000and 3,000, respectively.11. Branch salaries paid to its staff is 80,000 and unpaid utilities incurred is 6,00012. Branch remitted cash of 300,000 to Home Office.13. Straight line method of depreciation is used for all the fixed assets with 5% of their costsas scrap value. All of the equipment are expected to last for 5 year, while Furniture &Fixtures for 10 years. The branch operates only for 3-month period (the 1st quarter ofcalendar year 2022.Requirements:a. Prepare the journal entries for both the Home Office and Branch books based on theabove transactions.

Branch Accounting is a system of accounting where separate accounts are prepared for each branch.…

Answered: Requirements: a. Prepare the journal…

Business

Accounting

Requirements: a. Prepare the journal entries for both the Home Office and Branch books based on the above transactions.

Financial Reporting, Financial Statement Analysis and Valuation

8th Edition

ISBN:9781285190907

Author:James M. Wahlen, Stephen P. Baginski, Mark Bradshaw

Publisher:James M. Wahlen, Stephen P. Baginski, Mark Bradshaw

Chapter2: Asset And Liability Valuation And Income Recognition

Section: Chapter Questions

Problem 5QE

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