CHAPTER-11-GUERRERO-ADVAC PDF.pdf - CHAPTER 11 MULTIPLE...

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CHAPTER 11
MULTIPLE CHOICES - COMPUTATIONAL
12-1: d. This is recorded when the working fund is replenished.
12-2: c.
Sales P 700,000
Cost of goods sold:
Purchases P800,000
Merchandise inventory, end 180,000 620,000
Gross profit P 80,000
Expenses 198,000
Net income (loss) P (118,000)
12-3: b
Sales P 70,000
Cost of goods sold (P70,000 / 140%) 50,000
Gross profit P 20,000
Less: Samples (P8,000 – P6,000) P 2,000
Expenses 2,800 4,800
Net income P 15,200
12-4: a
Sales P 100,000
Cost of goods sold 72,000
Gross profit P 28,000
Expenses (P9,000 + P4,500) 13,500
Net income P 14,500
12-5: a
12-6: a
12-7: c
12-8 a
Shipment of merchandise to home office P 80,000
Equipment sent to home office 50,000
Expenses assigned to branch by the home office 8,000
Cash remittance to home office (40,000)
Home office account balance P 98,000

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12-9: d
12-10: a
Home Office account balance before closing, Dec. 32, 1008 P 35,000
Net income (loss)
Sales P147,000
Cost of cost goods sold
Shipment to branch P135,000
Inventory, 12/31 18,500 116,500
Gross profit P 30,500
Expenses 13,500 17,000
Home Office account balance (Investment in Branch account balance ) P 52,000
Shipment to Branch account has no beginning balance, because this was closed at the end
of 2011.
12-11: b
Jan. 1, 2011 Jan. 1, 2012
Petty cash fund P 6,000 P 6,000
Accounts receivable 86,000 98,000
Inventory 74,000 82,000
Home Office account balance P166,000 P186,000
12-12: d
(Branch Books) (Home Office Books)
Home Office Investment in Branch
Unadjusted balances, Dec. 31 P 21,320 P 38,600
Remittance in transit (10,400)
Shipment in transit 7,280
Cash collections of home office ( 400)
Adjusted balances, Dec. 31 P 28,200 P 28,200
12-13: a
Unadjusted balance – Investment in Branch account, 12/31 P430,000
Charge for advances by president (5,500)
Erroneous entry for merchandise allowance ( 600)
Share in advertising expense (9,000)
Unadjusted balance – Home Office account, 12/31 P414 , 900

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12-14: a
(Branch Books) (Home Office Books)
Home Office Investment in Branch
Unadjusted balances, 12/31 P 97,350 P 84,000
Shipment in transit 6,150
Collection of HO A/R by branch 25,000
Error in recording of branch profit 900
Returns of merchandise in transit ( 6,400)
Adjusted balances, 12/31 P103,500 P103,500
12-15: a
( Branch Books) (Home Office Books)
Home Office Investment in Branch
Unadjusted balances P27,350 P25,550
Error in recording shipment to Cavity branch (12,000)
Error in recording shipment to Tagaytay branch 15,000
Branch AR collected by home office (3,600)
Merchandise returns in transit ( 1,200)
Error in recording branch profit ( 3,600)
Adjusted balances P23,750 P23,750
12-16: c
Unadjusted balance- Investment in Branch account P 85,000
Remittance in transit (10,000)
Shipment in transit (20,000)
Expenses allocated ( 5,000)
Error in recording remittance 3,000
Error in recording shipments ( 9,000)
Unadjusted balance – Home Office account P 44,000
( Branch Books) (HomeOffice Books)
Home Office Investment in Branch
Unadjusted balances, P 44,000 P 85,000
Remittance in transit (10,000)
Shipment in transit 20,000
Expenses allocated 5,000
Unrecorded HO collection of AR (3,000)
Error in recording shipments 9,000
Adjusted balances P 75,000 P 75,000
12-17 a
( Branch Books) (Home Office Books)
Home Office Investment in Branch
Unadjusted balances P 440,000 P 496,000
Branch AR collected by Home Office ( 8,000)
Shipments in transit 32,000
Acquisition of furniture (12,000)
Merchandise returns (15,000)
Cash remittance in transit ( 5,000)
Adjusted balances P 464,000 P 464,000

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PROBLEMS
Problem 12-1
Home Office Books Branch Books
1. Investment in branch 30,000 Cash 30,000
Cash 30,000 Home office 30,000
2. Investment in branch