On 2019, the Home Office established a Branch by transferring cash and inventories. After a year...

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On 2019, the Home Office established a Branch by transferring cash and inventories. After a year of operations their separate statement of financial position showed the following (1/1/2020): Home Office Branch 70,000.00 280,000.00 400,000.00 Cash Accounts Receivable Inventory Investment in Branch Equipment Accumulated Deprecation Land and Building Total Assets Accounts Payable Ordinary Share Capital Ordinary Share Premium Retained Earnings Home Office Total Liability and SHE 300,000.00 750,000.00 1,000,000.00 1,150,000.00 800,000.00 80,000 1,500,000.00 5,420,000.00 1,160,000.00 1,000,000.00 2,000,000.00 1,260,000.00 5,420,000.00 500,000.00 50,000 1,200,000.00 50,000.00 1,150,000.00 1,200,000.00 For the year 2020, the following transactions transpired: 1. Shipments made by the Home Office to the Branch amounted to 500,000 2. Purchases made by the Home office and the Branch from suppliers amounted to 750,000 and 200,000 respectively all on account. 3. The Home Office acquired an equipment to be used by the Branch at the start of the year costing 250,000 4. Sales for the Home Office and the Branch amounted to 2,000,000 and 900,000 respectively all of which were on account. 5. Operating expenses paid by the Home Office and the Branch amounted to 500,000 and 150,000 respectively. 5% of the operating expenses paid by the Home Office were allocated to the Branch 6. The Home Office was able to collect 2,500,000 from their receivables while the Branch was able to collect 1,150,000. The Branch then remitted 80% of their collections to the Home Office 7. The Home Office paid 1,500,000 of their payables while the Brach paid 225,000 of their liabilities 8. Ending inventory of the Home Office amounted to 300,000. While the ending inventory of the Branch amounted to 500,000 9. Assets are depreciated over a 10 year useful life Requirement: Prepare all the entries required and their separate and combined financial statements (IS and BS). On 2019, the Home Office established a Branch by transferring cash and inventories. After a year of operations their separate statement of financial position showed the following (1/1/2020): Home Office Branch 70,000.00 280,000.00 400,000.00 Cash Accounts Receivable Inventory Investment in Branch Equipment Accumulated Deprecation Land and Building Total Assets Accounts Payable Ordinary Share Capital Ordinary Share Premium Retained Earnings Home Office Total Liability and SHE 300,000.00 750,000.00 1,000,000.00 1,150,000.00 800,000.00 80,000 1,500,000.00 5,420,000.00 1,160,000.00 1,000,000.00 2,000,000.00 1,260,000.00 5,420,000.00 500,000.00 50,000 1,200,000.00 50,000.00 1,150,000.00 1,200,000.00 For the year 2020, the following transactions transpired: 1. Shipments made by the Home Office to the Branch amounted to 500,000 2. Purchases made by the Home office and the Branch from suppliers amounted to 750,000 and 200,000 respectively all on account. 3. The Home Office acquired an equipment to be used by the Branch at the start of the year costing 250,000 4. Sales for the Home Office and the Branch amounted to 2,000,000 and 900,000 respectively all of which were on account. 5. Operating expenses paid by the Home Office and the Branch amounted to 500,000 and 150,000 respectively. 5% of the operating expenses paid by the Home Office were allocated to the Branch 6. The Home Office was able to collect 2,500,000 from their receivables while the Branch was able to collect 1,150,000. The Branch then remitted 80% of their collections to the Home Office 7. The Home Office paid 1,500,000 of their payables while the Brach paid 225,000 of their liabilities 8. Ending inventory of the Home Office amounted to 300,000. While the ending inventory of the Branch amounted to 500,000 9. Assets are depreciated over a 10 year useful life Requirement: Prepare all the entries required and their separate and combined financial statements (IS and BS).

Answer rating: 100% (QA)

Journal Entries Shipments made by the Home Office to the Branch Home Office Inventory Branch 500000 Cost of Goods Sold Home Office 500000 Account Debit Credit Home Office Inventory Branch 500000 Cost ... View the full answer