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1.3.1. Problems - Hoba - General Transactions Illustration

The document contains journal entries and financial statements for Barton Company and its branch. It records various agency, home office, and branch transactions. The combined financial statements show total sales of $171,000, cost of goods sold of $113,120, expenses of $45,830, and net income of $12,050 for the year ended December 31, 20X4. The home office records net income from own operations of $13,450 and a branch net loss of $1,400. Individual statements are also provided for the home office and branch.

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103 views

1.3.1. Problems - Hoba - General Transactions Illustration

The document contains journal entries and financial statements for Barton Company and its branch. It records various agency, home office, and branch transactions. The combined financial statements show total sales of $171,000, cost of goods sold of $113,120, expenses of $45,830, and net income of $12,050 for the year ended December 31, 20X4. The home office records net income from own operations of $13,450 and a branch net loss of $1,400. Individual statements are also provided for the home office and branch.

Uploaded by

Jane Dizon
Copyright
© © All Rights Reserved
We take content rights seriously. If you suspect this is your content, claim it here.
Available Formats
Download as XLSX, PDF, TXT or read online on Scribd
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CHAPTER 13 - HOBA

Problem I - AGENCY TRANSACTIONS

1. - Journal Entries
a. Working Fund - Agency 5,000.00
Cash 5,000.00

b. Accounts Receivable 50,000.00


Sales-Agency 50,000.00

c. Cash 35,000.00
Accounts Receivable 35,000.00

d. Expenses-Agency 4,500.00
Cash 4,500.00

e. Expenses-Agency 2,250.00
Cash 2,250.00

f. Cost of Goods Sold-Agency 36,000.00


Merchandise Inventory - Agency 36,000.00

Year-End Closing Entries:


Sales - Agency 50,000.00
Cost of Sales 36,000.00
Expenses-Agency 6,750.00
Income Summary - Angency 7,250.00

Income Summary - Angency 7,250.00


Income Summary 7,250.00

2. - Computation of Net Income


Sales 50,000.00
Less: Cost of Goods Sold 36,000.00
Gross Profit 14,000.00
Less: Expenses 6,750.00
Net income – agency 7,250.00
Problem 2 - HOBA

1. - JOURNAL ENTRIES
HO Books
a. Branch 42,500.00 Cash
Cash 42,500.00

b. Branch 50,200.00 Shipments from HO


Shipments to Branch 50,200.00

c. Accounts Receiivable 105,000.00 Accounts Receivable


Sales 105,000.00

d. Purchases 122,500.00 Purchases


Accounts Payable 122,500.00

e. Cash 113,600.00 Home Office


Accounts Receiivable 113,600.00

f. Accounts Payable 124,000.00 Accounts Payable


Cash 124,000.00

g. Expenses 26,600.00 Furniture & Fixtures


Cash 26,600.00

h. Cash 53,400.00 Expenses


Branch 53,400.00

i. Retained Earnings 10,000.00


Cash 10,000.00

4. ADJUSTING AND CLOSING ENTRIES:


Expenses 1,180.00 Expenses
Accum Depreciation - F&F 1,180.00

Prepaid Expenses 250.00 Prepaid Expenses


Expenses (2,050 - 1,800) 250.00

Expenses 100.00 Expenses


Accrued Expenses 100.00

Sales 105,000.00 Sales


Mdse. Invty, end 48,500.00 Mdse. Invty, end
Shipments to Branch 50,200.00 Income Summary
Mdse, Invty, Beg. 40,120.00
Purchases 122,500.00
Expenses 27,630.00
Income Summary 13,450.00

Branch Income 1,400.00 Home Office


Branch 1,400.00

Income Summary 1,400.00


Branch Income 1,400.00

Income Summary 12,050.00


Retained Earnings 12,050.00

2. - INDIVIDUAL FSs
BARTON COMPANY BARTON COMPANY
INCOME STATMENT - Home Office INCOME STATMENT - Br
Year Ended December 31, 20X4 Year Ended December 3

Sales 105,000.00 Sales


Less: Cost of Goods Sold: Less: Cost of Goods Sold
Mdse. Invty, Beg 40,120.00
Purchases 122,500.00
TGAS 162,620.00
Shipments to Branch 50,200.00
TGAS for own Sale 112,420.00 GROSS PROFIT
Mdse. Invty, End 48,500.00 63,920.00 Less: Expenses
GROSS PROFIT 41,080.00 NET LOSS
Less: Expenses 27,630.00
Net Income from Own Operations 13,450.00
Less: Branch Net Loss (1,400.00)
Combined Income 12,050.00
BARTON COMPANY BARTON COMPANY
Statement of Financial Position - Home Office Statement of Financial P
December 31, 20X4 December 31, 20X4

ASSETS
Cash 23,200.00 Cash
Accounts Receivable 19,050.00 Accounts Receivable
Mdse. Inventory 48,500.00 Mdse. Inventory
Prepaid Expenses 2,050.00 Prepaid Expenses
Furniture & Fixtures 20,000.00 Furniture & Fixtures
Less: A/D - F&F 5,580.00 14,420.00 Less: A/D - F&F
Branch 37,900.00 Total Assets
Total Assets 145,120.00

LIABILITIES and SHE


Liabilites: Accounts Payable
Accounts Payable 21,300.00 Accrued Expenses
Accrued Expenses 1,350.00 22,650.00 Home Office
SHE: Total Liabilities
Capital Stock, P20 par 50,000.00
Reatained Earnings* 72,470.00 122,470.00
Total Liabilities and SHE 145,120.00
* 70,420 + 12,050 -10,000

3. - COMBINED FSs
BARTON COMPANY
COMBINED INCOME STATMENT
Year Ended December 31, 20X4

Sales 171,000.00
Less: Cost of Goods Sold:
Mdse. Invty, Beg 40,120.00
Purchases 145,000.00
TGAS 185,120.00
Mdse. Invty, End 72,000.00 113,120.00
GROSS PROFIT 57,880.00
Less: Expenses 45,830.00
Net Income 12,050.00

BARTON COMPANY
Combined Statement of Financial Position
December 31, 20X4

ASSETS
Cash 27,450.00
Accounts Receivable 31,650.00
Mdse. Inventory 72,000.00
Prepaid Expenses 2,800.00
Furniture & Fixtures 28,000.00
Less: A/D - F&F 6,230.00 21,770.00
Total Assets 155,670.00

LIABILITIES and SHE


Liabilites:
Accounts Payable 31,550.00
Accrued Expenses 1,650.00 33,200.00
SHE:
Capital Stock, P20 par 50,000.00
Reatained Earnings* 72,470.00 122,470.00
Total Liabilities and SHE 155,670.00
* 70,420 + 12,050 -10,000
Branch Books
42,500.00
Home Office 42,500.00

Shipments from HO 50,200.00


Home Office 50,200.00

Accounts Receivable 66,000.00


Sales 66,000.00

Purchases 22,500.00
Accounts Payable 22,500.00

Home Office 53,400.00


Accounts Receivable 53,400.00

Accounts Payable 12,250.00


Cash 12,250.00

Furniture & Fixtures 8,000.00


Cash 8,000.00

Expenses 18,000.00
Cash 18,000.00

No Entry

Expenses 650.00
Accum Depreciation - F&F 650.00

Prepaid Expenses 750.00


Expenses 750.00

Expenses 300.00
Accrued Expenses 300.00

66,000.00
Mdse. Invty, end 23,500.00
Income Summary 1,400.00
Shipments from HO 50,200.00
Purchases 22,500.00
Expenses 18,200.00

Home Office 1,400.00


Income Summary 1,400.00

BARTON COMPANY
INCOME STATMENT - Branch
Year Ended December 31, 20X4

66,000.00
Less: Cost of Goods Sold:
Purchases 22,500.00
Shipments from HO 50,200.00
TGAS 72,700.00
Mdse. Invty, End 23,500.00 49,200.00
GROSS PROFIT 16,800.00
Less: Expenses 18,200.00
NET LOSS (1,400.00)
BARTON COMPANY
Statement of Financial Position - Branch
December 31, 20X4

ASSETS
4,250.00
Accounts Receivable 12,600.00
Mdse. Inventory 23,500.00
Prepaid Expenses 750.00
Furniture & Fixtures 8,000.00
Less: A/D - F&F 650.00 7,350.00
Total Assets 48,450.00

LIABILITIES
Accounts Payable 10,250.00
Accrued Expenses 300.00
Home Office 37,900.00
Total Liabilities 48,450.00
Prob6 - Sunset Co.
Wilshire Br. Home Office
1. - Reconciliation (HO Books) (Branch Books)
Unadjusted Balance 77,150.00 56,450.00
Add/(Deduct):
Overstatement of Shipment - Error (90.00)
Advertising Exp. Chargeable to Br. 600.00
Shipment in Transit 4,400.00
Collection of HO AR by Branch 750.00
Understatment of Deprn in Prior Yr. (540.00)
Remittance in Transit (16,000.00)
Adjusted Balance 61,360.00 61,360.00

2. - Adjustments
HO Books:
Wilshire Branch 750.00
Accounts Receivable 750.00

Retained Earnings 540.00


Wilshire Branch 540.00

Cash in Transit 16,000.00


Wilshire Branch 16,000.00

Problem 7 Beverly Hills Br Home Office


(HO Books) (Branch Books)

Unadjusted Balance 59,365.00 57,525.00


Add(Deduct):
Shipment to Brentwood - HO Error (1,400.00)
Written off branch Receivable (1,200.00)
Understatement of Branch NI in Dec. 310.00
Mdse returned by Branch - in transit (840.00)
Branch Net Income- corrected 1,225.00
Expenses Chargeable to Branch 215.00
Correction of Net Income by Branch (215.00)
Collection from Branch Customer - HO (65.00)
Adjsuted Balance 57,460.00 57,460.00
Adjusting Entries:
HO Books:
1.) Ship. To Beverly Branch 1,400.00
Beverly Hills Branch 1,400.00

2.) Brentwood Branch 1,400.00


Ship to Brentwood Branch 1,400.00

3.) Allowance for DA 1,200.00


Beverly Hills Branch 1,200.00

4.) Beverly Hills Branch 310.00


Retained Earnings 310.00

5.) Ship to Beverly Hills Branch - In transit 840.00


Beverly Hills Branch 840.00

6.) Beverly Hills Branch 1,225.00


Beverly Hills Branch Income 1,225.00
Branch Books:
Advertising Expense 600.00
Home Office 600.00

Shipments from HO - In Transit 4,400.00


Home Office 4,400.00

Home Office 90.00


Shipments from HO 90.00
Branch Books:
1.) Expenses 215.00
HO Current 215.00

Income Summary 215.00


Expenses 215.00

HO Current 215.00
Income Summary 215.00

2.) HO Current 65.00


Accounts Receivable 65.00
Problem 8 Branch Current Home Office
(HO Books) (Branch Books)
Unadjusted Balance 131,690.00 131,608.50 1. worked back
add/(Deduct):
a. Understatement of OF by Branch 90.00
b. Understatement of Mdse. Allow by Branch 50.00
c. Unrecorded Interest Expense 325.00
d. Double recording of Labor Charges (433.00)
e. Understatment of Freight by Branch 706.50
f. Branch Error -truck repairs charged to HO 293.00
g. HO error - sale of truck to branch 475.00
h. Branch Error - sales of truck in letter g (475.00)
Adjusted Balance 132,165.00 132,165.00 2. & 3.

Journal Entries - Branch Books:


a. Office Furniture 90.00
HO Current 90.00

b. Merchandise Allowances 50.00


HO Current 50.00

c. Interest Expense 75.00


Interest Payable 250.00
HO Current 325.00

d. HO Current 433.00
Labor Expense 433.00

e. Freight In 706.50
HO Current 706.50

f. Truck Repairs Expense 293.00


HO Current 293.00

g. HO Adjustment

h. HO Current 475.00
Trucks 475.00
Support to Adjusting Entries:
Entries Made Should Be
Office Equipment 780 Office Equipment 870
HO 780 HO 870

HO 350 HO 300
Mdse. Allowances 350 Mdse. Allowances 300

Interest Expense 250 Interest Exp. 325


Interest Payable 250 HO 325

Labor Expenses 866 Labor Expenses 433


HO 866 HO 433

Freight In 78.5 Freight In 785


HO Current 78.5 HO Current 785

HO 293 None
Truck Repairs 293

Trucks 475 None


Home Office 475

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