Reference no: EM132824363
Problem - The Wesley Company of Baguio City operates a branch in Dagupan City. A branch balance sheet on December 31, 2013 showed the following balances:
|
Cash
|
|
P35,000
|
|
Accounts Receivable
|
P122,000
|
|
|
Less: Allowance for Bad Debts
|
8,500
|
113,500
|
|
Merchandise Inventory
|
|
165,000
|
|
Prepaid Expenses
|
|
3,500
|
|
Equipment
|
38,500
|
|
|
Less: Accumulated Depreciation
|
27,000
|
11,500
|
|
Total Assets
|
|
P328,500
|
|
Accounts Payable
|
|
20,000
|
|
Accrued Expenses
|
|
6,000
|
|
Home Office
|
|
302,500
|
|
Total Liabilities and Home Office
|
|
P328,500
|
Branch transaction during 2014 are summarized as follows:
1. Sales on Account, P400,000.
2. Purchase on account, P105,000.
3. Goods received from home office, billing at cost, P200,000.
4. Collections on account, P380,000.
5. Payments on account, P101,000.
6. Bad Accounts written-off, P6,000.
7. Cash remittances to home office, P150,000.
8. Expenses paid P124,000.
9. Expenses paid by home office and charged to branch, P8,000.
10. Year-end adjusting data:
Merchandise on hand, P194,000
Prepaid expenses, December 31, P4,500
Accrued Expenses, December, P4,000
Receivables estimated to be uncollectible, December 31, P8,000.
Depreciation for 2014, P6,000
Requirements -
1. How much is the cash account balance as of December 31, 2014?
2. How much is the accounts receivable, net account balance as of December 31, 2014?
3. How much is the merchandise inventory account balance as of December 31, 2014?
4. How much is the prepaid expenses account balance as of December 31, 2014?
5. How much is the equipment account balance as of December 31, 2014?
6. How much is the accounts payable account balance as of December 31, 2014?
7. How much is the accrued expenses account balance as of December 31, 2014?
8. How much is the home office account balance as of December 31, 2014?
9. How much is the sales for the year ended December 31, 2014?
10. How much is the cost of sales for the year ended December 31, 2014?
11. How much is the operating expenses for the year ended December 31, 2014?
12. How much is the net income/(net loss) for the year ended December 31, 2014?
13. Prepare necessary journal entries in book of Home office.
14. Prepare necessary journal entries in book of Branch.