Reference no: EM132920528

At the end of the year, the Investment in Branch account of the home office is P601,000. However, the transactions were discovered to have errors.

a. The branch bought equipment on June 1, 20x1 costing P127,600 for the home office's use and the policy is to record the asset in the branch's books. During that time, the home office recorded the equipment and credited its reciprocal account.
b. The company's policy regarding the equipment's depreciation is that it has a rife of eight (8) years with no salvage value, and the straight-line method should be used. The home office and the branch have made no entry.
c. The home office ships merchandise to the branch, amounting to P193,400. Bacolod recorded the transaction as P195,200.
d. The branch pays the home office's creditors on account amounting to P64,800 and sends a debit memo to the home office. Upon receipt of the debit memo, the home office debited its reciprocal account in the amount of P46,800 twice.

REQUIRED: (Note: For number 2, indicate whether the net adjustment is debit or credit)

Question 1. Unadjusted balance of the Home Office account in the branch's books

Question 2. Net adjustment in the Home Office account at the end of the year

Question 3. Adjusted balances of the reciprocal accounts