Reference no: EM132631311

Question - Assume the following transactions of Home Office to its Branch office for the current month:

1. At the beginning of the month, the home office transfers to its branch an computer equipment costing P50,000, cash of P200, 000, furniture and fixture of P20,000, refrigerator P25, 000, store equipment P35,000.

2. Home office ships merchandise to branch.

Case 1: at cost P250,000, freight P10,000

Case 2: above cost P275,000, freight P10,000

3. Purchase of Property, Plant and Equipment costing P50,000.

Case 1: The PPE were purchased by the home office for the branch and are recorded in the books of the branch.

Case 2: The PPE were purchased by the home office for the branch and are recorded in the books of the H/O.

Case 3: The PPE were purchased by the branch for the branch's use and are recorded in the books of the H/O.

Case 4: The PPE were purchased by the branch for the branch's use and are recorded in the books of the branch.

4. Sales for the month, cash P 309,500; on account P100,000.

5. Collection of Accounts Receivable amounting P30,000.

Case 1: Branch receivables was collected by the branch.

Case 2: Branch receivables was collected by the home office.

Case 3: Home office receivables was collected by the branch.

6. Remittance of cash by branch to home office, P30,000. (#4; case 3)

7. Branch purchase of merchandise, P65,000, 30% on account, freight P5,000.

8. Apportionment/allocation of Expenses by the home office to the branch: Salaries P 5,000; Advertising expenses P10,000; Utilities expenses P3,500; Depreciation expenses P4,000.

9. Operating Expenses incurred by the branch: Salaries P30,000, Depreciation Expenses P6,500; Utilities expenses P2,800; Rental expenses P15,000, freight-out P3,150.

10. Ending inventories: from home office - P10,000; branch purchases - P5,000.

Required -

1. Prepare necessary journal entries.

2. Prepare statement of operations and financial position.