Chapter 13 Dayag

Chapter 13: MULTIPLE CHOICE
1.
C.
14,400
Merchandise Inventory
X
2.
3.
4.
B.
37,600
Ending Inventory in the combined income statement:
From Home Office
31,000
From Outsiders
6,600
37,600
A.
70,100
Shipments from Home Office
280,000
Less: Ending Inventory, at billed
43,000
Cost of goods sold from home office at billed price
236,600
Multiplied by: Mark up
40/140
67,600
Unrecorded Branch Expenses
2,500
True Branch Net Income
70,100
A.
10,000
Multiplied by: Mark Up
Unrealized Intracompany Profit
5.
A
Branch Income
Cost of Sales
6.
D.
25
(50,000 40,000)/40,000
7.
C.
20,000
(480,000 360,000) x (80,000/480,000)
8.
C.
9.
B.
580,000
Reported branch net income (per branch books)
Branch income (per home office books)
Overvaluation of branch COGS
C.
30,000
1/3
10,000
25%
20,000
700,000
Cost of Sales of Home Office

Cost of Sales of Branch
Overvaluation of branch COGS
Combined Cost of Sales
10.
50,400
40/140
14,400
180,000
30,000
50,000
20,000
500,000
100,000
20,000
580,000
11.
A.
140%
True Branch Net Income
156,000
Branch Net Income reported
60,000
Overvaluation of COGS
96,000
Less: COGS from Home Office, at billed
Inventory, beg
70,000
Shipment from HO
350,000
COGAS
420,000
Inventory, end
84,000
336,000
CGS from HO, at cost
240,000
336,000/240,000 = 140%
12.
C.
24,000
84,000 x 40/140 = 24,000
13.
B.
109,000
Branch Net income reported
Rental Expense
Adjusted Net Income
Overvaluation of CGS
SFHO
COGAS
MI, end
COGS, at billed
Mark up
Adjusted Branch Net Income
14.
D.
Sales
COGS
550,000
550,000
75,000
475,000
25/125
95,000
109,000
837,500
MI, beg
Purchases
COGAS
MI, end
Gross Profit
Expenses
Net Income
15.
20,000
6,000
14,000
87,500
500,000
587,500
120,000
467,500
370,000
170,000
200,000
D.
Unrealized Profit in Branch Inventory
Allowance of branch inventory, end
Sales
COGS
7,200
2,800
4,400
60,000
Inventory, beg
Purchases
SFHO
COGAS
30,000
11,000
19,200
60,200
MI, end
Gross Profit
Expenses
Unadjusted Branch Net Income
Adjusted branch net income
17.
D.
D.
20.
D.
252,150
MI, beg
HO, cost
Branch, outsiders
From Home Office
5,800
Purchases
COGAS
256,800
MI, end
HO, cost
Branch, outsiders
From Home Office
4,650
COGS
D.
7,800
4,400
12,000
Billed Price Cost
36,000
28,800
Allowance
30,000
24,000
10,800
6,000/20% = 30,000 + 6,000 = 36,000
45,000 36,000 = 9,000
3,000 12,000
2,000
Shipments
1,600
COGS
From HO at billed price
From outsiders
19.
40,200
9,000 36,000
6,000
Shipments
4,800
COGS
From HO at billed price
From outsiders
18.
20,000
19,200
12,000
Billed Price Cost

12,000
9,600
Allowance
10,000
8,000
3,600
2,000/20% = 10,000 + 2,000 = 12,000
15,000 12,000 = 3,000
3,500
300
2,000
2,300
251,000
3,000
150
1,500
1,650
252,150
46,000 debit
Billed Price
32,000
Shipments
24,000
COGS
60,000
Cost
Allowance
36,000
56,000
MI, end
10,000
46,000
21.
D.
120,000
Billed Price
60,000
Shipments
COGS
MI, end
40,000
120,000
22.
B.
7,900 52,000
Sales
COGS
MI, beg
SFHO
COGAS
MI, end
Gross Profit
Expenses
Net Income
MI, beg
HO, cost
Branch, cost
21,500
Purchases
COGAS
71,500
MI, end
HO, cost
Branch, cost
19,500
COGS
23.
A.
40,000
48,000 / 120% = 40,000
24.
A.
8,000
48,000 / 20%/120% = 8,000
25.
B.
2,000
Sales
COGS
Inventory, beg
Cost
400,000
Allowance
100,000
160,000
40,000
4,500
20,000
24,500
5,500
21,000
13,100
7,900
19,000
17,000
4,500
50,000
14,000
5,500
52,000
192,000
Purchases
SFHO
COGAS
MI, end
Gross Profit
Expenses
26.
C.
28.
29.
100,000
8,000
10,000
2,000
46,000
Shipments
COGS
MI, end
46,000
27.
52,000
108,000
160,000
60,000
92,000
100,000
B.
326,000
Sales
COGS
MI, beg
Purchases
COGAS
MI, end
Gross Profit
Expenses
Net Income
D.
25,550
Sales
COGS
MI, beg
Purchases
COGAS
MI, end
Gross Profit
Expenses
Net Income
C.
20,000
Sales
COGS
MI, beg
Purchases
COGAS
STBO
COGAS for HO
MI, end
Billed Price Cost

40,000
250,000
290,000
60,000
230,000
Allowance
900,000
132,000
350,000
482,000
78,000
496,000
170,000
326,000
404,000
117,000
20,000
57,000
77,000
16,550
56,550
31,000
25,550
60,450
155,000
23,000
190,000
213,000
100,000
113,000
30,000
83,000
Gross Profit
Expenses
Net Income
30.
A.
10,470
Sales
COGS
Inventory, beg
Purchases
Freight In
Shipment in Transit
COGAS
MI, end
Gross Profit
Expenses
72,000
52,000
20,000
140,000
11,550
105,000
5,500
5,250
127,300
16,170
28,870
28,000
111,130
870
9,600
10,470
31.
A.
120,000
Inventory, beg, at billed price
165,000
Shipments, at billed price
110,000
COGAS, at billed price
275,000
CGS at BP:
Sales
169,000
Sales returns and allowances
3,750
Sales price of mdse. From outsiders
9,000
Net sales of mdse. from HO
156,250
Intercompany cost ratio
100/125
125,000
Inventory, end, at billed price
150,000
Cost ratio
100/125
Merchandise inventory at cost destroyed by fire
120,000
32.
D.
400
Freight actually paid by:
Home Office
Branch
Total
Freight that should be recorded
Excess freight
33.
D.
34.
C.
23,400
Inventory of the Branch:
Shipments from HO, at billed price
Ending Inventory
Ending inventory, at billed price
Freight
500
700
1,200
800
400
Charged to the Head Office
37,700
60%
22,620
780
23,400
35.
36.
B.
20,280
Inventory of the Branch:
Shipments from HO, at billed price
Ending Inventory
Ending inventory, at billed price
Freight
C.
Branch Current Baguio
Excess Freight
Branch Current Davao
32,500
60%
19,500
780
20,280
19,630
520
20,150
37.
C.
A year-end adjusting entry or entries to establish an unrealized profit
(loading) account of 12,500
(300,000 x ) x (300,000 250,000)/300,000 = 12,500
38.
D.
No year-end adjusting entry for the freight charges
39.
D.
It record the receipt of cash from the branch
40.
B.
7,900
Sales
COGS
MI, beg
SFHO
COGAS
MI, end
Gross Profit
Expenses
Net Income
B.
19,500
MI, beg
HO, cost
Branch, cost
21,500
Purchases
COGAS
71,500
MI, end
HO, cost
Branch, cost
19,500
COGS
40,000
4,500
20,000
24,500
5,500
21,000
13,100
7,900
19,000
41.
42.
C.
52,000
MI, beg
HO, cost
17,000
4,500
50,000
14,000
5,500
52,000
17,000
Branch, cost
21,500
Purchases
COGAS
71,500
MI, end
HO, cost
Branch, cost
19,500
COGS
4,500
50,000
14,000
5,500
52,000
43.
C.
Rock will have both a Stone Home Office account and Shipments from
Stone Account on its branch office books.
44.
D.
Debit the Rock Branch Account for the 2,000 of branch profit, credit the
Rock Branch Profit account for the 2,000 branch profit md combine the 5,000
of branch ending inventory.

Chapter 13 Dayag

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Chapter 13 Dayag

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Chapter 13: MULTIPLE CHOICE

Cost of Sales of Home Office

Billed Price Cost

Billed Price Cost

Charged to the Head Office

No year-end adjusting entry for the freight charges

It record the receipt of cash from the branch

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