HOBA

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HOBA
COMPUTATION- MEDIUM
THEORY
The TokTik home office ships merchandise to its Makati
Branch at 20 percent above cost. Makati branch’s book
shows a beginning inventory of P135,000 (50% from
outside purchase) and shipments from home office of
P405,000. The ending inventory of the Makati branch
amounted to P337,500 in which 60% is home office
merchandise while the remaining balances is from
outside purchases. The Makati branch purchased
merchandise costing P317,500. The total sales and
operating costs of the branch for the year amounted to
P1,040,000 and P220,000 respectively. What is the
entry of the home office upon shipment of
merchandise to the branch?
Transactions between a home office and its branch are
accounted for in reciprocal accounts. The reciprocal
account maintained in the branch books is called
Investment in branch.
Home office
Purchases from home office.
Any of these.
The branch records a debit memo received from the
home as
Debit to home office account.
Debit to allocated expense.
Debit to investment account.
Credit to home office account.
Correct answer
Credit to home office account.
The freight on shipments to the branch paid by the home
office is recorded by the home
office as
Debit to freight-in
Credit to freight-in.
Credit to investment account.
Credit to cash.
The depreciation expense on equipment carried in the
books of the home office but used by the branch is
recorded in the branch's books as
Debit to investment in branch and credit to accumulated
depreciation
Debit to depreciation expense and credit to investment in
branch
Debit to depreciation expense and credit to home
office account.
Not recorded
Transactions between branches are recorded
as if each of them is transacting with the home
office.
by debiting or crediting their own inter-branch accounts.
a and b
not accounted for by the branches
Debit Branch Current 405,000, Credit Shipment to
branch 405,000
Debit Investment in branch 405,000, Credit Shipment
to branch 337,500 and Allowance for overvaluation
67,500
Debit Shipments from home office 405,000, Credit Home
office current account 405,000
None of the above
The TokTik home office ships merchandise to its Makati
Branch at 20 percent above cost. Makati branch’s book
shows a beginning inventory of P135,000 (50% from
outside purchase) and shipments from home office of
P405,000. The ending inventory of the Makati branch
amounted to P337,500 in which 60% is home office
merchandise while the remaining balances is from
outside purchases. The Makati branch purchased
merchandise costing P317,500. The total sales and
operating costs of the branch for the year amounted to
P1,040,000 and P220,000 respectively. What is the pre
closing balance of the Allowance for Overvaluation of
Branch Inventory Account?
P33,750
P40,500
P78,750
P94,500
The TokTik home office ships merchandise to its Makati
Branch at 20 percent above cost. Makati branch’s book
shows a beginning inventory of P135,000 (50% from
outside purchase) and shipments from home office of
P405,000. The ending inventory of the Makati branch
amounted to P337,500 in which 60% is home office
merchandise while the remaining balances is from
outside purchases. The Makati branch purchased
merchandise costing P317,500. The total sales and
operating costs of the branch for the year amounted to
P1,040,000 and P220,000 respectively. What is the post
closing balance in the Unrealized Profit in Branch
Inventory Account?
P33,750
P40,500
P78,750
P94,500
The TokTik home office ships merchandise to its Makati
Branch at 20 percent above cost. Makati branch’s book
shows a beginning inventory of P135,000 (50% from
outside purchase) and shipments from home office of
P405,000. The ending inventory of the Makati branch
amounted to P337,500 in which 60% is home office
merchandise while the remaining balances is from
outside purchases. The Makati branch purchased
merchandise costing P317,500. The total sales and
operating costs of the branch for the year amounted to
P1,040,000 and P220,000 respectively. What is the
amount of overvaluation of Cost of Goods Sold or
undervaluation in income?
P33,750
P45,000
P78,750
P94,500
The TokTik home office ships merchandise to its Makati
Branch at 20 percent above cost. Makati branch’s book
shows a beginning inventory of P135,000 (50% from
outside purchase) and shipments from home office of
P405,000. The ending inventory of the Makati branch
amounted to P337,500 in which 60% is home office
merchandise while the remaining balances is from
outside purchases. The Makati branch purchased
merchandise costing P317,500. The total sales and
operating costs of the branch for the year amounted to
P1,040,000 and P220,000 respectively. The Allowance
For Overvaluation of Branch Inventory Account is
adjusted to how much?
P33,750
P45,000
P78,750
P94,500
COMPUTATION – HARD
The TokTik home office ships merchandise to its Makati
Branch at 20 percent above cost. Makati branch’s book
shows a beginning inventory of P135,000 (50% from
outside purchase) and shipments from home office of
P405,000. The ending inventory of the Makati branch
amounted to P337,500 in which 60% is home office
merchandise while the remaining balances is from
outside purchases. The Makati branch purchased
merchandise costing P317,500. The total sales and
operating costs of the branch for the year amounted to
P1,040,000 and P220,000 respectively. The Allowance
For Overvaluation of Branch Inventory Account is
adjusted by how much?
P33,750
P40,500
P45,000
P94,500
The TokTik home office ships merchandise to its Makati
Branch at 20 percent above cost. Makati branch’s book
shows a beginning inventory of P135,000 (50% from
outside purchase) and shipments from home office of
P405,000. The ending inventory of the Makati branch
amounted to P337,500 in which 60% is home office
merchandise while the remaining balances is from
outside purchases. The Makati branch purchased
merchandise costing P317,500. The total sales and
operating costs of the branch for the year amounted to
P1,040,000 and P220,000 respectively. What is the
overvaluation of Branch Ending Inventory?
P33,750
P40,500
P45,000
P94,500
The TokTik home office ships merchandise to its Makati
Branch at 20 percent above cost. Makati branch’s book
shows a beginning inventory of P135,000 (50% from
outside purchase) and shipments from home office of
P405,000. The ending inventory of the Makati branch
amounted to P337,500 in which 60% is home office
merchandise while the remaining balances is from
outside purchases. The Makati branch purchased
merchandise costing P317,500. The total sales and
operating costs of the branch for the year amounted to
P1,040,000 and P220,000 respectively. How much is the
true ending inventory of the branch?
P280,250
P303,750
P315,000
P337,500
The TokTik home office ships merchandise to its Makati
Branch at 20 percent above cost. Makati branch’s book
shows a beginning inventory of P135,000 (50% from
outside purchase) and shipments from home office of
P405,000. The ending inventory of the Makati branch
amounted to P337,500 in which 60% is home office
merchandise while the remaining balances is from
outside purchases. The Makati branch purchased
merchandise costing P317,500. The total sales and
operating costs of the branch for the year amounted to
P1,040,000 and P220,000 respectively. How much is the
total Cost of goods sold of the branch?
P225,000
P270,000
P475,000
P520,000
The TokTik home office ships merchandise to its Makati
Branch at 20 percent above cost. Makati branch’s book
shows a beginning inventory of P135,000 (50% from
outside purchase) and shipments from home office of
P405,000. The ending inventory of the Makati branch
amounted to P337,500 in which 60% is home office
merchandise while the remaining balances is from
outside purchases. The Makati branch purchased
merchandise costing P317,500. The total sales and
operating costs of the branch for the year amounted to
P1,040,000 and P220,000 respectively. How much is the
true net income of the branch?
P225,000
P270,000
P300,000
P345,000
EVALUATION ACTIVITY
The ABC home office ships merchandise to its Makati
Branch at 20 percent above cost. Makati branch’s book
shows a beginning inventory of P135,000 (50% from
outside purchase) and shipments from home office of
P405,000. The ending inventory of the Makati branch
amounted to P337,500 in which 60% is home office
merchandise while the remaining balances is from
outside purchases. The Makati branch purchased
merchandise costing P317,500. The total sales and
operating costs of the branch for the year amounted to
P1,040,000 and P220,000 respectively. What is the preclosing balance of the Allowance for Overvaluation of
Branch Inventory Account?
P33,750
P40,500
P94,500"
P78,750
The ABC home office ships merchandise to its Makati
Branch at 20 percent above cost. Makati branch’s book
shows a beginning inventory of P135,000 (50% from
outside purchase) and shipments from home office of
P405,000. The ending inventory of the Makati branch
amounted to P337,500 in which 60% is home office
merchandise while the remaining balances is from
outside purchases. The Makati branch purchased
merchandise costing P317,500. The total sales and
operating costs of the branch for the year amounted to
P1,040,000 and P220,000 respectively. What is the
post-closing balance in the Unrealized Profit in
Branch Inventory Account?
P40,500
P78,750
P94,500"
P33,750
The following are the advantages of home office and
branch accounting except:
It helps to ascertain the profit & loss of each branch.
It helps to know each branch’s debtors inventory and
cash position.
It helps to determine each branch’s wages, rent, salary,
and expenses separately.
It increases the company’s expenses because of a
different setup at each location.
The following are the disadvantages of home office and
branch accounting except:
Due to a separate account for each branch, it requires
more workforce.
It requires an individual branch manager for each
branch.
Separate accounting of each chapter helps to make
decisions according to branch requirements.
It requires other infrastructure at each location or unit.
The TokTik home office ships merchandise to its Makati
Branch at 20 percent above cost. Makati branch’s book
shows a beginning inventory of P135,000 (50% from
outside purchase) and shipments from home office of
P405,000. The ending inventory of the Makati branch
amounted to P337,500 in which 60% is home office
merchandise while the remaining balances is from
outside purchases. The Makati branch purchased
merchandise costing P317,500. The total sales and
operating costs of the branch for the year amounted to
P1,040,000 and P220,000 respectively. What is the
amount of overvaluation of Cost of Goods Sold or
undervaluation in income?
P33,750
P45,000
P78,750
P94,500"
The TokTik home office ships merchandise to its Makati
Branch at 20 percent above cost. Makati branch’s book
shows a beginning inventory of P135,000 (50% from
outside purchase) and shipments from home office of
P405,000. The ending inventory of the Makati branch
amounted to P337,500 in which 60% is home office
merchandise while the remaining balances is from
outside purchases. The Makati branch purchased
merchandise costing P317,500. The total sales and
operating costs of the branch for the year amounted to
P1,040,000 and P220,000 respectively. The Allowance
For Overvaluation of Branch Inventory Account is
adjusted to how much?
P33,750
P45,000
P78,750
P94,500"
The home office of ABC Company bills merchandise to
branches at 25% above home office cost. Information
taken from the accounting records of XYZ Branch is as
follows: Beginning inventories (at billed prices)-P17,000;
Shipments from home office (at billed prices)-P42,500;
Ending inventories (at billed prices)-P20,000; Net loss
for accounting period-P1,500.The net income or net loss
of XYZ Branch, based on home office cost of branch
merchandise, is:
P7,900 net income
P9,400 net loss
P7,000 net income
P6,400 net income
On November 2, 2015, ABC Company created an
agency in Davao, and transferred merchandise samples
costing P15,000, equipment worth P36,000 and a cash
working fund of P10,000 to be maintained on an imprest
basis. The agency transmitted to the home office sales
orders which were billed at P90,000 of which P46,550
was collected net of a 2% discount. The agency also
paid for its operating expenses of P7,500 including
supplies of P2,000. The agency received replenishment
thereof from the home office before the year ended. On
December 31, the agency samples were estimated to be
useful over a period of 5 months while the equipment is
estimated to have a useful life of eight years. Unused
supplies on Dec 31 amounted to P1,000. Home office
maintains a gross profit rate of 25% of cost. Give the
cost of sales of Home Office if its Inventory on Nov 2 is
P1,250,000 while on hand at Dec 31 went down to 20%
of total stock . Net purchases was P2,750,000 including
freight of P50,000.
P3,000,000
P3,131,000
P3,010,300
P3,113,000
The depreciation expense on equipment carried in the
books of the home office but used by the branch is
recorded in the branch's books as
Debit to investment in branch and credit to accumulated
depreciation
Debit to depreciation expense and credit to investment in
branch
Debit to depreciation expense and credit to home
office account.
Not recorded
Transactions between branches are recorded by the
transacting branches
as if each of them is transacting with the home
office.
by debiting or crediting their own inter-branch accounts.
a and b
not accounted for by the branches
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