Accounting Assignment | College Homework Help

Prepaid expenses, December 31, $450. Accrued expenses, December 31, $400. Receivables estimated to be uncollectible, December 31, $800. Depreciation for 1989, $600. Instructions: (1) Prepare the entries to be made by the branch to record the transactions for the year and to adjust and close the accounts at the end of the year. (2) Prepare a branch balance sheet, income statement, and statement of changes in the home office account for the year ended December 31, 1989. (3) Prepare all of the home office entries in 1989 affecting the branch ac- count. 7-3. A balance sheet for the Eagle Co. as of January 1, 1974, is as follows: Balance Sheet Assets Liabilities and Stockholders’ Equity $ 15,000 $ Accrued expenses……… Accounts payable…… Capital stock……… Retained earnings ………….. 250 33,750 50,000 28,200 40,800 Cash.. Accounts receiv- able.. dole……….. $42,000 Less allowance for doubtful accounts……. 1,200 Merchandise in ventory ………… Store furniture and fixtures…… $15,000 Less accumu- lated depre- ciation ………. 4,600 Total assets……. 46,000 10,400 $112,200 Total liabilities and stock- holders’ equity…………… $112,200 On this date a branch sales office is established in Miami. The branch is sent the following assets by the home office: (a) Cash, $1,500. (b) Merchandise, cost, $10,200. (c) Store furniture and fixtures previously used by the home office – cost, $3,000; age, 242 years; depreciation rate used in the past, 10% a year. The cost of shipment and installation, $900, is paid by the branch. This cost is to be written off over the remaining life of the asset. The equip- ment accounts are to be carried on the books of the home office. (d) Accounts receivable, $2,600. Accounts arose from home office sales to customers in Miami. The branch is authorized to take over the accounts and make collections. N Shift PART TWO – SPECIAL SALES PROCEDU 204 sutsiders during January were: Home office and branch transactions with outsiders during Janua Home Office Branch $34,600 $6,200 Sales on account ………. 40,000 2.600 Collections on own accounts 31,600 3,000 Purchases on account……. 36,200 1,450 Payments on account……. Payments of expenses (including accruals as of 9,200 1,250 January 1)…. The following took place with respect to accounts received by the branch from the home office: collections of $1,600 were made; accounts of $150 were uncollectible and were written off; it is believed that remaining accounts of $850 are collectible. Interoffice transactions during January were: Merchandise shipments to branch, cost ……………………….. $1,250 Cash remittance to home office…. 1,000 The following information is to be recorded on January 31: (a) Merchandise costing $600 was shipped by the home office to the branch on January 31; this merchandise is in transit and will not reach the branch until February 2. (This shipment is not included in transfers pre- viously mentioned.) (b) Expenses that are paid by the home office during the month and that are chargeable to the branch total $475. (These are included in the $9,200 amount.) (c) Depreciation on furniture and fixtures is recorded at the rate of 10% a year. (d) Merchandise inventories, excluding merchandise in transit, are: home of- fice, $44,500; branch, $9,800. (e) Accrued expenses are: home office, $750; branch, $350. Instructions: (1) Prepare journal entries to record the foregoing transactions for (a) the branch and (b) the home office. (2) Prepare individual statements for the branch and for the home office. (3) Prepare combined statements for the branch and the home office. (4) Prepare the journal entries to adjust and close the books at the end of the month for (a) the branch and (b) the home office. 7-4. On January 1, 1986, the Barton Co. opened a new branch in a neighboring city. A summary of transactions for the home office and the branch for 1976 and the balance sheet for the home office on January 1 are as follows: Home Office Transactions (a) Transfers of cash to branch, $42,500. (b) Transfers of merchandise to branch (billed at cost), $50.200. (c) Sales on account, $105,000. (d) Purchases on account, $122,500. (e) Collections on account, $113,600. (f) Payments on account, $124,000. Get Accounting homework help today