Reference no: EM132524969

Question - On June 30, 2021, the unadjusted balances of the Investment in Gentle branch account of the Home office of Kind Company and the Home office account of its Gentle branch were $450,902 debit and $501,995 credit, respectively. Additional information follows:

a. A credit memo for return of defective merchandise for $7,000 was taken by the branch as $17,000.

b. Branch remitted total cash of $152,700 at the end of the period. However, 1/3 of this amount was still in transit as of June 30, 2021 and therefore unrecorded by the Home office.

c. Home office shipped merchandise to Branch for a total billed price of $221,700 towards the period end, of which goods still in transit amounted to $33,255.

d. Home Office's receivable of $151,300 was collected by the Branch less 4% discount. Branch is yet to notify and remit the collection to the Home Office. Consequently, Home Office has not yet recorded this transaction.

Required - Determine the adjusted balance of the reciprocal accounts.