L Trading Company operates a branch in Dallas, Texas. At close of business on December 31, 2008, Dallas Branch account in the home office books showed a debit balance of P225,770. The interoffice accounts were in agreement at the beginning of the year. For purposes of reconciling the interoffice accounts, the following facts were ascertained: (see image below) Compute for the unadjusted balance of the Home Office Current account. a. An office equipment costing the home office P3,500 was picked up by the branch as P350.b. Insurance premium of P675 charged by the home office was taken up twice by the branch.c. Freight charge on merchandise made by the home office for P1,125 was recorded in the branch books as P1,215.d. Home office credit memo representing a discount on merchandise for P800 was not recorded by the branch.e. The branch failed to take up a P700 debit memo from the home office representing the share of the branch inadvertising.f. The home office inadvertently recorded a remittance for P3,000 from its California branch as a remittance from itsDallas branch.

Debit Balance of Dallas Branch: P225,770 Office equipment amount recorded by branch: P350 Amount of…

Answered: L Trading Company operates a branch in…

FINANCIAL ACCOUNTING

10th Edition

ISBN:9781259964947

Author:Libby

Publisher:Libby

Chapter1: Financial Statements And Business Decisions

Section: Chapter Questions

Problem 1Q

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L Trading Company operates a branch in Dallas, Texas. At close of business on December 31, 2008, Dallas Branch account in the home office books showed a debit balance of P225,770. The interoffice accounts were in agreement at the beginning of the year. For purposes of reconciling the interoffice accounts, the following facts were ascertained: (see image below) Compute for the unadjusted balance of the Home Office Current account.

a. An office equipment costing the home office P3,500 was picked up by the branch as P350.
b. Insurance premium of P675 charged by the home office was taken up twice by the branch.
c. Freight charge on merchandise made by the home office for P1,125 was recorded in the branch books as P1,215.
d. Home office credit memo representing a discount on merchandise for P800 was not recorded by the branch.
e. The branch failed to take up a P700 debit memo from the home office representing the share of the branch in
advertising.
f. The home office inadvertently recorded a remittance for P3,000 from its California branch as a remittance from its
Dallas branch.

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