AA1 - Chapter 9 (2008 edition)

page 19

Problem 9 10
Triple N Commercial
Working Paper for Combined Financial Statements for Home Office and Branch
For the Year Ended December 31, 2008

Debits
Cash
Accounts Receivable (net)
Inventory Home office
Branch
Fixed Assets (net)
Branch Current
Purchases
Shipments from Home Office
Sundry Expenses
Income Tax
Credits
Accounts Payable
Mortgage Payable
Income Tax Payable
Home Office Current

Sales
Shipments to Branch
Allowance for Overvaluation
Ordinary Share Capital
Retained Earnings

Trial Balance
HO
Branch
50,100
1,260
350,000
135,660
64,400
32,340
210,000
163,120
532,000
294,000
119,980
83,440
1,489,600

546,700

30,500
67,500

10,500

Adjustments
HO
Branch
a. 5,320
b. 2,100
c. ( 2,500)

a. (5,320)
d. 14,000
f. 23,667
23,667

f. 23,667
144,200

434,000
308,000
2,940
600,000
46,660
1,489,600

e. 10,976
24,576

e. 10,976
b. 2,100
c. ( 2,500)
d. 14,000

392,000

546,700

23,667

24,576

Adjusted
Trial Balance
HO
Branch
55,420
3,360
350,000
133,160
64,400
32,340
210,000
157,800
532,000
308,000
119,980
83,440
23,667
10,976
1,513,267
571,276
30,500
67,500
23,667

434,000
308,000
2,940
600,000
46,660
1,513,267

Branch
Income Statement
Debit
Credit

Home Office
Income Statement
Debit
Credit

64,400
a.

2,940

29,400

Combined
Balance Sheet
Debit
Credit
58,780
483,160

70,000

32,200

102,200
210,000

c. 157,800
532,000
b. 28,000

280,000
83,440
10,976

119,980
23,667

10,500

41,000
67,500
34,643

10,976

157,800
392,000

c. 157,800
392,000
b.
a.

571,276

Branch net income

Home Office net income

Inventory, end:
Home Office
Branch [(P21,420 + P14,000) / 110%]
Total

Eliminations
Debit
Credit

P 70,000
32,200
P102,200

434,000
280,000

28,000
2,940

188,740

188,740

403,816
20,384

424,200

740,047

784,000

854,140

424,200

424,200

43,953
784,000

784,000

854,140

600,000
46,660
789,803
20,384
43,953
854,140

AA1 - Chapter 9 (2008 edition)

page 19