The following transactions pertain to a branch’s first month’s operations: a. The home office sent P9,000 cash to the branch. b. The home office shipped inventory costing P40,000 to the branch; the intercompany billing was for P50,000. c. Branch inventory purchases from outside vendors totaled P30,000. d. Branch sales on account were P80,000. e. The home office allocated P2,000 in advertising expense to the branch. f. Branch collections on accounts receivable were P45,000. g. Branch operating expenses of P14,000 were incurred, none of which were paid at month-end. h. The branch remitted P17,000 to the home office. i. The branch’s ending inventory (as reported in its balance sheet) is composed of: Acquired from outside vendors P12,000 Acquired from home office (at billing price) 20,000 Requirements: a. Prepare journal entries in the books of Home Office and Branch. b. Prepare branch’s income statement for its first month’s operation
Master Budget
A master budget can be defined as an estimation of the revenue earned or expenses incurred over a specified period of time in the future and it is generally prepared on a periodic basis which can be either monthly, quarterly, half-yearly, or annually. It helps a business, an organization, or even an individual to manage the money effectively. A budget also helps in monitoring the performance of the people in the organization and helps in better decision-making.
Sales Budget and Selling
A budget is a financial plan designed by an undertaking for a definite period in future which acts as a major contributor towards enhancing the financial success of the business undertaking. The budget generally takes into account both current and future income and expenses.
The following transactions pertain to a branch’s first month’s operations:
a. The home office sent P9,000 cash to the branch.
b. The home office shipped inventory costing P40,000 to the branch; the intercompany billing was for P50,000.
c. Branch inventory purchases from outside vendors totaled P30,000.
d. Branch sales on account were P80,000.
e. The home office allocated P2,000 in advertising expense to the branch.
f. Branch collections on accounts receivable were P45,000.
g. Branch operating expenses of P14,000 were incurred, none of which were paid at month-end.
h. The branch remitted P17,000 to the home office.
i. The branch’s ending inventory (as reported in its balance sheet) is composed of:
Acquired from outside vendors P12,000
Acquired from home office (at billing price) 20,000
Requirements:
a. Prepare
b. Prepare branch’s income statement for its first month’s operation
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