The following transactions were entered in the investment in branch account of T head office for the year 2018: 

Investment in B Beg.Bal.76,643

Collection of A/R 5,550 

Shipment to Branch, 35,400 

Fund transfer, 6/1/18 2,500 

Expenses charged 480 

•Shipments to the branch during the year were billed at 120% of the cost. 

•The beginning balance of the loading in-branch inventory account was 3,550. At the end of the year, the required balance of the said account was 2,450. •On December 10, 2018, the home office purchased a piece of equipment amounting to 6,000 for its branch. The said equipment has a useful life of five years and will be carried in the books of the branch, but the home office recorded the purchase by debiting equipment. The branch recorded the depreciation of the equipment by debiting the home office current account and crediting accumulated depreciation. 

•Debit memo regarding the allocation of expenses to the branch was received by the branch on January 2, 2019. It also remitted cash to the home office on December 29, 2018, amounting to 5,500, which the home office received and recorded on January 3, 2019. 

•The branch reported a net income of 32,955. The interoffice accounts were in agreement at the beginning of the year. 

Required

a.What is the adjusted balance of the investment in-branch account on December 31, 2018, before the necessary closing entries were made?

b.What is the net income of the branch in the separate statement of comprehensive income of the home office? 

c.What is the amount of the home office current account that will be reported in the books of the branch after closing entries are made?

Answer rating: 100% (QA)

a The adjusted balance of the investment inbranch account on December 31 2018 before the ... View the full answer