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Closing Entries - Branchbooks: (Branch Books) Home Office

The document provides information about closing entries for branch and home office books. It includes details of cash remittances, shipments, returns, expenses, and balances between the branch and home office for the period ending 20XX. The branch recorded its expenses incorrectly. The required tasks are to 1) compute the correct balances of reciprocal accounts and 2) prepare entries to bring the accounts into balance for the home office's combined financial statements.

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384 views2 pages

Closing Entries - Branchbooks: (Branch Books) Home Office

The document provides information about closing entries for branch and home office books. It includes details of cash remittances, shipments, returns, expenses, and balances between the branch and home office for the period ending 20XX. The branch recorded its expenses incorrectly. The required tasks are to 1) compute the correct balances of reciprocal accounts and 2) prepare entries to bring the accounts into balance for the home office's combined financial statements.

Uploaded by

Unknown 01
Copyright
© © All Rights Reserved
We take content rights seriously. If you suspect this is your content, claim it here.
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Download as PDF, TXT or read online on Scribd
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Closing Entries – Branch Books

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3. Closing Entries – Home Office Books

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Exercise No. 6

At the end of 20XX, the following records were taken form the books of the home office and the branch.

(Branch Books)
Home Office
12/01 Cash remitted to home office 80,000 01/01 Balance 60,000
12/28 Cash remitted to home office 30,000 12/05 Shipments from Home Office 120,000
12/28 Merchandise returned to home
office 12,000 12/28 Expenses from Home Office 45,200

Balance 103,200

(Home Office Books)


Investment in Branch
01/01 Balance 60,000 12/03 Cash received from branch 80,000
12/04 Shipments to branch 120,000 12/28 Collection from branch customer 18,000
12/28 Expense Allocation 52,400
12/28 Shipments to branch 24,000
12/28 Supplies purchased for branch and
shipped directly to branch 8,000

Balance 166,400

Except for the error by the branch in recording its share of allocated expenses, all difference are timing differences.

Required:
1. Compute the correct balance of reciprocal accounts.
2. Prepare the necessary entries to bring the reciprocal accounts into balance for a working paper used to p repare the home
office’s combined financialstatements.

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