What is the net adjustment of the investment in Bacolod account at the end of the year?
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At the end of the year the Investment in Bacolod account of the home office is
P300,500. However, there are transactions discovered to have errors.
•Bacolod branch bought equipment on June 1, 2020 costing P63,800 for the
home office's use and the policy is to record the asset in Bacolod's books.
During that time the home office recorded the equipment and credited its
reciprocal account of its Bacolod branch.
•The policy of the company regarding the equipment's depreciation is that it
has a life of 8 years with no salvage value and the straight-line method should
be used. No entry has been made by the home office and branch.
•The home office ships merchandise to Bacolod amounting to P96,700. Bacolod
recorded the transaction as P97,600
•Bacolod pays the home office's creditors in the amount of P32,400 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 P23,400 twice.
What is the net adjustment of the investment in Bacolod account at the end of
the year? *
20,052 debit
20,052 credit
19,387.3 debit
19,387.5 credit
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Solved in 2 steps
- At the end of the year the Investment in Bacolod account of the home office isP300,500. However, there are transactions discovered to have errors.•Bacolod branch bought equipment on June 1, 2020 costing P63,800 for thehome office's use and the policy is to record the asset in Bacolod's books.During that time the home office recorded the equipment and credited itsreciprocal account of its Bacolod branch.•The policy of the company regarding the equipment's depreciation is that ithas a life of 8 years with no salvage value and the straight-line method shouldbe used. No entry has been made by the home office and branch.•The home office ships merchandise to Bacolod amounting to P96,700. Bacolodrecorded the transaction as P97,600•Bacolod pays the home office's creditors in the amount of P32,400 and sends adebit memo to the home office.•Upon receipt of the debit memo, the home office debited its reciprocalaccount in the amount of P23,400 twice. What is the net adjustment of the home office…On December 12, 2018, an investment costing $80,000 was sold for $100,000. The total of the sale proceeds wascredited to the investment account.Required:1. Prepare the journal entry to correct the error, assuming it is discovered before the books are adjusted orclosed in 2018. (Ignore income taxes.)6. On January 01, 2020 Kit Company, Inc. establishes a branch in Bauang. During the year, Kit Inc. transfers cash and merchandise to the branch worth P15,000 and P45,000 respectively. Freight was paid by the home office worth P1,500 included in the cost of merchandise. The home office also incurred P5,700 expenses of which 30 percent was allocated to the branch. On December 31, 2020, the branch incurred a loss of P4,000. What is the balance of the branch account as per home office books *
- Mill Creek Golf Club, Inc. purchased a computer for $2,900, debiting Computer Equipment. During 2022 and 2023, Mill Creek Golf Club, Inc. recorded total depreciation of $2,300 on the computer. On January 1, 2024, Mill Creek Golf Club, Inc. traded in the computer for a new one, paying $2,700 cash. The fair market value of the new computer is $4,500. Journalize Mill Creek Golf Club, Inc.'s exchange of computers. Assume the exchange had commercial substance. Let's begin by calculating the gain or loss on the exchange of computer equipment on January 1. Market value of assets received Less: Book value of asset exchanged Cash paid Gain or (Loss) Journalize Mill Creek Golf Club, Inc.'s exchange of computers. (Record a single compound journal entry. Record debits first, then credits. Select the explanation on the last line of the journal entry table.) Date Jan. 1 Accounts and Explanation Debit CreditOn December 12, 2018, an investment costing $88,000 was sold for $116,000. The total of the sale proceeds was credited to the investment account. Required:1. Prepare the journal entry to correct the error assuming it is discovered before the books are adjusted or closed in 2018. (Ignore income taxes.)2. Prepare the journal entry to correct the error assuming it is not discovered until early 2019. (Ignore income taxes.)ABOMINABLE VERY BAD Co. has several branches. On December 31, 20x1, the “Investment in Branch One” maintained by the home office shows a balance of ₱400,000 while the “Home office” account maintained by Branch One shows a balance of ₱568,000. The following information was determined: (a) Branch Two acquired equipment for ₱120,000 to be maintained in the books of the home office. This was recorded by the home office as a transaction with Branch One. (b) Branch One acquired equipment for ₱160,000 to be maintained in its books. This was not recorded by the home office. (c) Branch Four remitted cash collections of ₱40,000 to the home office which the latter failed to record. (d) The home office erroneously charged Branch One for a debit memo of ₱48,000 received from Branch Five. (e) Branch One reversed a previous debit memo from Branch Six amounting to ₱24,000. The home office decided that this charge is appropriately Branch Seven’s cost. How much is…
- 35. An Entity bought an office equipment costing P60,000. It was however, charged to repairs and maintenance. Data about the office machine follows: * Date of Purchase : June 30, 2020 Estimated Life : 5 years Salvage Value none The error was discovered and was corrected on December 31, 2020 during the closing of the books of accounts. How much is the understatement or overstatement of profit for the year ended Dec. 31, 2020, because of the error? O A. P52,000 understatement O B. P53,000 overstatement C. P54,000 understatement O D. P54,000 overstatementI need help on how to calculate this problem step by step, please. Information concerning Sure Corporation's intangible assets is as follows: On January 1, 2019, Sure signed an agreement to operate as a franchisee of Rapid Copy Service Inc. for an initial franchise fee of $81,000. Of this amount, $21,000 was paid when the agreement was signed, and the balance is payable in 4 annual payments of $15,000 each beginning January 1, 2020. The agreement provides that the down payment is not refundable and no future services are required of the franchisor. The present value at January 2, 2019, of the 4 annual payments discounted at 12% (the implicit rate for a loan of this type) is $45,600. The agreement also provides that 5% of the revenue from the franchise must be paid to the franchisor annually. Sure's revenue from the franchise for 2019 was $800,000. Sure estimates the useful life of the franchise to be 5 years. Sure incurred $69,000 of experimental and development costs in its…In January, 2022, Harmony Inc. has the following expenditures related to manufacturing a new generation of its product. Match each expenditure to the appropriate accounting treatment on the right. Takes possession of a manufacturing machine. The vendor sends an invoice for A. No accounting entry is necessary. B. Capitalize to a different asset account. C. Capitalize to the Machine account. $650,000. D. Expense. Pays a machine import duty of $35,000 to the government. Pays employees $75,000 for research and development to finalize the new product design. Receives an invoice for $4,250 from the company that shipped the machine. Pays employees $16,500 to install, customize, and test the new manufacturing machine. v Pays $1,200 for a one-year insurance policy for the machine, with coverage beginning when the machine is placed into service on February 16.
- As the recently appointed auditor for Bramble Corporation, you have been asked to examine selected accounts before the 6-month financial statements of June 30, 2020, are prepared. The controller for Bramble Corporation mentions that only one account is kept for intangible assets. The account is shown below. Intangible Assets Debit Credit Balance Jan. 4 Research and development costs 932,000 932,000 Jan. 5 Legal costs to obtain patent 72,480 1,004,480 Jan. 31 Payment of 7 months' rent on property leased by Bramble 85,400 1,089,880 Feb. 11 Premium on common stock 232,000 857,880 March 31 Unamortized bond discount on bonds due March 31, 2040 88,800 946,680 April 30 Promotional expenses related to start-up of business 216,800 1,163,480 June 30 Operating losses for first 6 months 247,500 1,410,980 Prepare the entries necessary to correct this account. Assume that the patent has a useful life of 10 years. (Credit account titles are automatically indented when amount is entered. Do not indent…As the recently appointed auditor for Bramble Corporation, you have been asked to examine selected accounts before the 6-month financial statements of June 30, 2020, are prepared. The controller for Bramble Corporation mentions that only one account is kept for intangible assets. The account is shown below. Intangible Assets Debit Credit Balance Jan. 4 Research and development costs 932,000 932,000 Jan. 5 Legal costs to obtain patent 72,480 1,004,480 Jan. 31 Payment of 7 months' rent on property leased by Bramble 85,400 1,089,880 Feb. 11 Premium on common stock 232,000 857,880 March 31 Unamortized bond discount on bonds due March 31, 2040 88,800 946,680 April 30 Promotional expenses related to start-up of business 216,800 1,163,480 June 30 Operating losses for first 6 months 247,500 1,410,980 Prepare the entries necessary to correct this account. Assume that the patent has a useful life of 10 years. (Credit account titles are automatically indented when amount is entered. Do not indent…As the recently appointed auditor for Bryan Corporation, you have been asked to examine selected accounts before the 6-month financial statements of June 30, 2020, are prepared. The controller for Bryan Corporation mentions that only one account is kept for intangible assets. The account is shown below. Intangible Assets Debit Credit Balance Jan. 4 Research and development costs 940,000 940,000 Jan. 5 Legal costs to obtain patent 75,000 1,015,000 Jan. 31 Payment of 7 months' rent on property leased by Bryan 91,000 1,106,000 Feb. 11 Premium on common stock 250,000 856,000 March 31 Unamortized bond discount on bonds due March 31, 2040 84,000 940,000 April 30 Promotional expenses related to start-up of business 207,000 1,147,000 June 30 Operating losses for first 6 months 241,000 1,388,000 Instructions Prepare the entry or entries necessary to correct this account. Assume that the patent has a useful life of 10…
