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HOBA Activity

The document outlines financial transactions and calculations for ABC Corp and its branch for the years 2030 and 2031, including inventory management, sales, and profit determination. It provides specific figures for shipments, purchases, expenses, and inventory, requiring calculations for ending inventory, cost of goods sold, net income, and realized profits. Additionally, it includes questions regarding the unadjusted balances of home office accounts in different locations.

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jakebonds02
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13 views2 pages

HOBA Activity

The document outlines financial transactions and calculations for ABC Corp and its branch for the years 2030 and 2031, including inventory management, sales, and profit determination. It provides specific figures for shipments, purchases, expenses, and inventory, requiring calculations for ending inventory, cost of goods sold, net income, and realized profits. Additionally, it includes questions regarding the unadjusted balances of home office accounts in different locations.

Uploaded by

jakebonds02
Copyright
© © All Rights Reserved
We take content rights seriously. If you suspect this is your content, claim it here.
Available Formats
Download as PDF, TXT or read online on Scribd
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1. During 2030, ABC Corp's home office shipped its goods to its branch at a markup of 20% above cost.

In 2031,
this rate was increased by 5% points, when the branch had a total of P224,400 beginning inventory, all of
which came from the home office.

During the year 2031, the branch purchased P480,000 worth of goods from its suppliers, and received goods
from the home office billed at P431,250. As per the 2031 separate statement of financial position of the
home office, the loading in branch inventory account had an adjusted ending balance of P37,500. As per the
2031 combined statement of profits and losses, the cost of goods sold totaled P1,705,200, inclusive of
P893,200 attributable to the home office.
Determine the Ending Inventory and COGS in the branch books.
Determine the Realized Profit.

2. On December 1, 2030, AB Corp established a sales agency in Makati by transferring P50,000 cash to be
maintained using an imprest system and by shipping 12 months worth of samples costing P156,000. During
the month, the agency submitted to the home office sales orders amounting to P264,000 but only 75% of
which were approved and invoiced by the end of the calendar year. Expense vouchers for the month were as
follows: meal allowance P2,000, rent P3,000, transportation allowance P1,000. The gross profit rate of the
company is 50% based on sale.
Determine the Net Income.

3. The following information is extracted from the books and records of ABC Company and its branch. The
balances are as of December 31, 2021 of the company's operations.

Home Office Brancweh


Sales P260,000
Shipments to branch P 78,000
Shipments from home office 104,000
Purchases 39,000
Expenses 78,000
Inventory, January 1, 2021 26,000
Allowance for overvaluation of branch inventory P31,200
However, no shipments in transit between home office and the branch were made. Both shipments accounts
are properly recorded. The ending inventory includes merchandise acquired from the home office amounting
to P26,000 and P7,800 from outsiders for a total of P33,800.
Determine the following~
Q1: Realized profit in branch inventory.
Q2: Amount of branch merchandise beginning inventory that was acquired from the home office?
Q3: Amount of unrealized profit in the separate books
Q4. Cost of Goods Available for Sale (branch books)
Q5. Branch Ending Inventory
Q6. Branch Net Income
Q7. Branch True Income

Determine the following:

1. Unadjusted balance of HOC in Baguio’s books.


2. Unadjusted balance of HOC in Davao’s books.

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