1 1999 Dr Cr Dr Cr DrCr Dr Cr Mason Branch Home Office Combined Eliminations

1 1999 dr cr dr cr drcr dr cr mason branch home

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1, 1999 Dr (Cr) Dr (Cr) Dr(Cr) Dr (Cr) Mason Branch Home Office Combined Eliminations Adjusted Trial Balances Statement of Retained Earnings (b) (22,500)
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Accounting for Branches 68 Working Paper for Example II (contd.) 150,000 150,000 Equipment (c) (56,000) 56,000 Investment in Mason Branch 60,000 (a) (7,500) 22, 500 45,000 Inventories 57,000 18,000 39,000 Trade accounts receivable (net) 30,000 5,000 25,000 Cash Dr (Cr) Dr (Cr) Dr(Cr) Dr (Cr) Mason Branch Home Office Combined Eliminations Adjusted Trial Balances Balance Sheet Allowance for overvaluation of inventories: Mason Branch (30,000) (a) 30,000
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Accounting for Branches 69 Working Paper for Example II (contd.) -0- -0- -0- -0- Totals (117,000) Retained earnings(from statement of retained earnings above) (150,000) (150,000) Common stock, $10 par (c) (56,000) (56,000) Home Office (10,000) (10,000) Trade accounts payable Dr (Cr) Dr (Cr) Dr(Cr) Dr (Cr) Mason Branch Home Office Combined Eliminations Adjusted Trial Balances Balance Sheet (contd.) Accumulated depreciation of inventories: Mason Branch (20,000) (20,000)
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Accounting for Branches 70 Branch Closing Entries and Home office Adjusting and Closing Entries (when billing at above the cost) Branch Closing Entries --The closing entries for the branch at the end of 1999 are as follows: Sales 80,000 Income Summary 10,500 Cost of Goods Sold 67,500 Operating Expenses 23,000 To close revenue and expense ledger accounts
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Accounting for Branches 71 Branch Closing Entries and Home office Adjusting and Closing Entries (when billing at above the cost) (contd.) Home Office 10,500 Income Summary 10,500 To close the net loss in the Income Summary account to the Home Office account
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Accounting for Branches 72 Branch Closing Entries and Home office Adjusting and Closing Entries (when billing at above the cost) (contd.) After the closing entries, the Home Office ledger account should have a balance of $45,500. Note: Home Office balance prior to the closing entries equals $56,000. $56,000-net loss of $10,500 = $45,500 (net loss decreases Home Office credit balance).
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Accounting for Branches 73 Branch Closing Entries and Home office Adjusting and Closing Entries (when billing at above the cost) (contd.) Home Office Adjusting and Closing Entries Income: Mason Branch 10,500 Investment in Mason Branch 10,500 To record net loss reported by branch
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Accounting for Branches 74 Branch Closing Entries and Home office Adjusting and Closing Entries (when billing at above the cost) (contd.) Allowance for Overvaluation of Inventories: Mason Branch 22,500 Realized Gross Profit: Mason Branch Sales 22,500 To reduce allowance to amount by which ending inventories of branch exceed cost. Home Office Adjusting and Closing Entries (contd.)
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Accounting for Branches 75 Branch Closing Entries and Home office Adjusting and Closing Entries (when billing at above the cost) (contd.) Home Office Adjusting and Closing Entries (contd.) Realize Gross Profit: Mason Branch Sales 22,500 Income: Mason Branch 10,500 Income Summary 12,000 To close branch net loss and realized gross profit to Income Summary ledger account (Income tax effects are disregarded.)
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Accounting for Branches 76 Branch Closing Entries and Home office Adjusting and Closing Entries (when billing at above the cost) (contd.) After posting the above entries, the account
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