Reference no: EM133099162

Question - PT. Herbal is headquartered in Solo, on January 1, 2019 opened its second branch in Jakarta, after the first branch in Bekasi. PT. Herbal applies the perpetual recording method for inventory and allows branches to procure goods from unrelated parties. The following are selected transactions related to the Jakarta branch office and Bekasi is the head office

a. The head office sends merchandise to the Jakarta Branch with a cost of Rp. 100,000,000,- and is invoiced with a margin of 20% of the cost.

b. The head office and Jakarta branch purchased merchandise from external parties for Rp. 250,000,000 and Rp. 100,000,000,- respectively, with a cash payment of 40% of the invoice price.

c. The head office and Jakarta branch sold merchandise for Rp. 500,000,000 and Rp. 335,000,000, respectively. Payments that have been received from customers are only 30%.

d. Jakarta Branch transfers cash to Bekasi Branch on behalf of the Head Office in the amount of Rp. 25,000,000,-

e. The Jakarta branch office collects receivables from customers of the Bekasi Branch amounting to Rp 50,000,000,- still in the 3/10 discount period; n/30

f. Head Office pays expenses and records depreciation on fixed assets used by the Jakarta branch, 38% of the expenses are allocated to the Jakarta branch:

1. Electricity, Water & Telephone Rp. 15.000.00000

2. Advertising & Marketing tools Rp.26,000,000

3. Salary IDR 50,000,000

4. Depreciation Expense Rp.80,000,000

Additional information:

1. At the beginning of 2019 the balance of merchandise inventory for the Head Office and Branches purchased from outside parties for Rp.60,000,000 and Rp.27,000,000, respectively.

2. At the end of 2019, the balance of merchandise inventory for Head Office and Branches purchased from External Parties amounted to Rp. 30,000,000 and Rp. 18,000,000, respectively.

3. At the beginning of 2019 the balance of merchandise inventory for Branches originating from the Head Office was Rp.23,600,000, with a margin of 18% of the cost.

4. At the end of 2019 the balance of merchandise inventory for Branches originating from the Head Office was Rp.27,000,000, with a margin of 20% of the cost.

Required - Make journal entries in the books of the head office and branch offices to record these transactions and to cover the branch's profit and loss.