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    Acc 142 - Reviewer

    Uploaded by

    Riezel Pepito
    The document provides financial information for a branch of a company including: - Cost of merchandise sold by the branch for the period was $116,950 - Net foreign exchange gain for the period was $2,000 - Balance in the branch account on the home office books as of December 31, 2021 was $71,995 - Closing inventory to be reported in the combined financial statements for 2021 was $300,000 - Branch net income according to the home office books on December 15, 2021 was $470,500

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    Acc 142 - Reviewer

    Uploaded by

    Riezel Pepito
    280 views6 pages
    The document provides financial information for a branch of a company including: - Cost of merchandise sold by the branch for the period was $116,950 - Net foreign exchange gain for the period was $2,000 - Balance in the branch account on the home office books as of December 31, 2021 was $71,995 - Closing inventory to be reported in the combined financial statements for 2021 was $300,000 - Branch net income according to the home office books on December 15, 2021 was $470,500

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    ACC142

    Original Title

    ACC 142- REVIEWER

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    The document provides financial information for a branch of a company including: - Cost of merchandise sold by the branch for the period was $116,950 - Net foreign exchange gain for the period was $2,000 - Balance in the branch account on the home office books as of December 31, 2021 was $71,995 - Closing inventory to be reported in the combined financial statements for 2021 was $300,000 - Branch net income according to the home office books on December 15, 2021 was $470,500

    Copyright:

    © All Rights Reserved
    Download as PDF, TXT or read online from Scribd
    Download as pdf or txt
    280 views6 pages

    Acc 142 - Reviewer

    Uploaded by

    Riezel Pepito
    The document provides financial information for a branch of a company including: - Cost of merchandise sold by the branch for the period was $116,950 - Net foreign exchange gain for the period was $2,000 - Balance in the branch account on the home office books as of December 31, 2021 was $71,995 - Closing inventory to be reported in the combined financial statements for 2021 was $300,000 - Branch net income according to the home office books on December 15, 2021 was $470,500

    Copyright:

    © All Rights Reserved
    Download as PDF, TXT or read online from Scribd
    Download as pdf or txt
    of 6

    REVIEWER

    PERIODICAL: ACC 142

    Cost of merchandise sold by branch at billed price = 116,950

    ForEx gain or (loss) on December 31, 2020 = 3,000


    ForEx gain or loss on February 1, 2021 = 1,000
    Net ForEx gain or (loss) = (3,000-1,000)= 2,000
    Foreign currency receivable as of December 31, 2020 = 807,000
    peso payable balance as of December 31, 2020 = 804,000
    For a Philippine entity, which of the following quotations for exchange rates is correct? (Direct quotation;
    Indirect quotation) = ₱40:$1; ₱1:$0.025

    Correct Balance on Dec. 31,2021 of the Branch Account- current as per home office books = P71,995
    The amount of overvaluation in branch ending inventory because of branch sales for the month just ended =
    195,000

    (1)Cost of Sales of the branch; (2) Branch net income


    (1)P102,850; (2) P18550
    Balance of the allowance for over -valuation of branch inventory on
    December 31 before adjustments = P165,120

    Inventory, January 1 ………………………………….. P 33,600


    Add: Shipments from office, net of returns
    (P840,000 – P48,000) ………………………... 792,000
    Cost of good available for sale ………………………. P 825,600
    Multiplied by mark-up ………………………………. 25/125
    Allowance for overvaluation before adjustments……. P165,120

    Balance of the investment in branch account in the home office books = P165,000

    Cost of sales = 284,375


    What closing inventory would be reported in the combined statement of income for the year 2021?
    = P300,000

    Branch inventory (120,000x100/120) 100,000


    Home Office (210,000-10,000) 200,000
    Closing Inventory 300,000

    The branch net income on December 15, 2021 on the home office books = 470,500

    Net income (loss) of the agency for the month ended May31, 2017 = 560,000
    On September 30, the branch inventory at cost and the branch net income (loss) as far as the Home Office is
    concerned are: P28,000 and P2,920, respectively

    Branch Inventory at Cost:

    Branch inventory at billed price P33,600


    Divided by the billing percentage cots 120%
    Branch inventory of cost P28,000

    Branch net income as far as the HO is concerned:


    Branch net loss, as reported (P5,200)
    Add: Overvaluation of COS of the Branch:
    Total shipment to Branch
    Billed price (P60,000+24,000) 84,000
    Cost (84,000/120%) 70,000 14,000

    Less: Branch returns


    Billed price 1,680
    Cost (1,680/120%) 1,400. 280
    Net Shipment 13,720

    Less: Inventory, 9/30


    Billed price 33,600
    Cost 28,000 5,600 8,120
    Branch Net Income P2,920

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