Accounting 7

9:00am-10:30am TTH

Preliminary Examination
December 8, 2015

Accounting 7
9:00am-10:30am TTH

Preliminary Examination
December 8, 2015

Problem 1. The following information for the month of December is

provided for Jong Company and its only branch, Bawal Sipsip
Corporation:

Problem 1. The following information for the month of December is

provided for Jong Company and its only branch, Bawal Sipsip
Corporation:

Home Office Control

Dec 1 Balance
3 Cash remitted to the home office
5 Shipments from the home office
28 Expenses from the home office
28 Cash remitted to the home office
28 Shipments returned to the home office
Branch Control
Dec 1 Balance
3 Cash received from branch
4 Shipments to branch
28 Expense allocation
28 Collection from branch customer
28 Supplies purchased for branch and shipped
directly to branch

Home Office Control

Dec 1 Balance
3 Cash remitted to the home office
5 Shipments from the home office
28 Expenses from the home office
28 Cash remitted to the home office
28 Shipments returned to the home office
Branch Control
Dec 1 Balance
3 Cash received from branch
4 Shipments to branch
28 Expense allocation
28 Collection from branch customer
28 Supplies purchased for branch and shipped
directly to branch

60,000
80,000
120,000
45,200
30,000
12,000
60,000
80,000
120,000
52,400
18,000
8,000

60,000
80,000
120,000
45,200
30,000
12,000
60,000
80,000
120,000
52,400
18,000
8,000

Except for the error by the branch in recording its share of

allocated expenses, all differences are timing differences. What is
the adjusted balance of reciprocal accounts? Prepare the necessary
journal entries.

Except for the error by the branch in recording its share of

allocated expenses, all differences are timing differences. What is
the adjusted balance of reciprocal accounts? Prepare the necessary
journal entries.

Problem 2. On October 2015, YoureNotMyTypeJude Main Office

established a sales agency in Dandan.
The main office sent samples of its merchandise amounting to
P8,400. The samples sent are intended to last until June 2016.
During the first two months of operations, the agency
transmitted to the home office sale of goods costing P291,600
Collections from customers amounted to P73,941, net of P2% sales
discount
Payments made by the agency from October-November were as
follows: annual rent of P57,600; advertising expense worth
P5,600; and utilities amounting to P7,200
It also purchased an equipment worth P9,000 which will be
depreciated at 20% per annum
The gross profit rate on sales agency order is 20% of gross
sales
What is the net income of the agency for the two months ended
November 2015?

Problem 2. On October 2015, YoureNotMyTypeJude Main Office

established a sales agency in Dandan.
The main office sent samples of its merchandise amounting to
P8,400. The samples sent are intended to last until June 2016.
During the first two months of operations, the agency
transmitted to the home office sale of goods costing P291,600
Collections from customers amounted to P73,941, net of P2% sales
discount
Payments made by the agency from October-November were as
follows: annual rent of P57,600; advertising expense worth
P5,600; and utilities amounting to P7,200
It also purchased an equipment worth P9,000 which will be
depreciated at 20% per annum
The gross profit rate on sales agency order is 20% of gross
sales
What is the net income of the agency for the two months ended
November 2015?

Ms.

Ms.