Pre-closing Trial Balance of ABC Company and Branch on December 31, can be seen as follows :-
Question:
Pre-closing Trial Balance of ABC Company and Branch on December 31, can be seen as follows :-
HOME OFFICE | BRANCH | |||
Dr. | Cr. | Dr. | Cr. | |
Cash | $ 78,580 | 7,000 | ||
Accounts Receivable | 175,000 | 5,000 | ||
Merchandise Inventory, January 1 | 185,000 | |||
Furniture and Fixture | 85,000 | 3,500 | ||
Allowance for Depreciation | 38,500 | 350 | ||
Accounts Payable | 115,000 | 2,500 | ||
Investment in Branch | 70,000 | |||
Remittances to Branch | 42,100 | |||
Remittances from Branch | 30,680 | |||
Home Office | 25,000 | |||
Remittance from Home Office | 15,000 | |||
Remittance to Home Office | 11,000 | |||
Capital Stock | 200,000 | |||
Earned Surplus | 105,000 | |||
Sales | 360,000 | 30,000 | ||
Purchases | 200,000 | 12,000 | ||
Merchandise shipments to Branch | 70,000 | |||
Merchandise shipments from Home Office | 25,000 | |||
Operating Expense | 83,500 | 9,000 | ||
Depreciation expenses for Branch | 350 | |||
$ 919,180 | $ 919,180 | 72,850 | 72,850 | |
Merchandise Inventory, December 31 | ||||
Acquired from Suppliers | $ 100,000 | $ 100,000 | 6,500 | 6,500 |
Acquired from Home Office | 12,000 | 12,000 | ||
$ 100,000 | $ 100,000 | 18,500 | 18,500 |
* Depreciation is recorded as a separate expense item to facilitate conversion of this item n terms of asset cost.
Instructions
- Restate the trial balance of branch in US dollar. Show the working paper translating the pounds value into dollars value. (Use the following rates for conversions).
Current rate - exchange rate at end of period. (2.77)
Original - exchange rate on date transaction was completed (rate on date of purchase of asset - furniture and fixtures by the branch - 2.80; rate on date or acquisition of goods from home office, 2.80)
Average rate - 2.78
- Prepare Working Papers
Governmental and Nonprofit Accounting
ISBN: 978-0132751261
10th edition
Authors: Robert Freeman, Craig Shoulders, Gregory Allison, Robert Smi