Reference no: EM132579477

On dec.31, the inventory in branch account on the home books shows a balance of 150,000..The following facts are ascertained:

1. Merchandise billed at 5,000 is in transit on Dec.31, from the home office to the branch

2. The branch collected a home account receivable for 2,000. The branch did not notify the home office of cash collection.

3. On dec.30, the home office mailed a check of 10,000 to the branch but the bookkeeper charged the check to General expenses; the branch has not received the check as of Dec.31.

4. Branch profit for Dec.was recorded by the home office at 8,900 instead of 9800.

5. Branch returned supplies of 1000 to the home office but the home office has not yet recorded the receipt of the supplies.

Required:

Question a. Compute the balance of the Home Office account on the branch book as of Dec.31 before its adjustment.

Question b. Please prepare a reconciliation statement to compute the adjusted balances on Dec.31.