Trudie Company's home office bills shipments of merchandise to its Savoy Branch at 140% of home...

  

 

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Trudie Company's home office bills shipments of merchandise to its Savoy Branch at 140% of home office cost. During the first year after the branch was opened, the following were among the transactions and events completed: 1. The home office shipped merchandise with a home office cost of $110,000 to Savoy Branch. 2. Savoy Branch sold for $80,000 cash merchandise that was billed by the home office at $70,000, and incurred operating expenses of $16,500 (all paid in cash). 3. The physical inventories taken by Savoy Branch at the end of the first year were $82,460 at billed prices from the home office. Instructions a. Assuming that the perpetual inventory system is used both by the home office and by Savoy Branch, prepare for the first year: (1) All journal entries, including closing entries, in the accounting records of Savoy Branch of Trudie Company. (2) All journal entries, including the adjustment of the Inventories Overvaluation account, in the accounting records of the home office of Trudie Company. b. Assuming that the periodic inventory system is used both by the home office and by Savoy Branch, prepare for the first year: (1) All journal entries, including closing entries, in the accounting records of Savoy Branch of Trudie Company. (2) All journal entries, including the adjustment of the Inventories Overvaluation ac- count, in the accounting records of the home office of Trudie Company. Trudie Company's home office bills shipments of merchandise to its Savoy Branch at 140% of home office cost. During the first year after the branch was opened, the following were among the transactions and events completed: 1. The home office shipped merchandise with a home office cost of $110,000 to Savoy Branch. 2. Savoy Branch sold for $80,000 cash merchandise that was billed by the home office at $70,000, and incurred operating expenses of $16,500 (all paid in cash). 3. The physical inventories taken by Savoy Branch at the end of the first year were $82,460 at billed prices from the home office. Instructions a. Assuming that the perpetual inventory system is used both by the home office and by Savoy Branch, prepare for the first year: (1) All journal entries, including closing entries, in the accounting records of Savoy Branch of Trudie Company. (2) All journal entries, including the adjustment of the Inventories Overvaluation account, in the accounting records of the home office of Trudie Company. b. Assuming that the periodic inventory system is used both by the home office and by Savoy Branch, prepare for the first year: (1) All journal entries, including closing entries, in the accounting records of Savoy Branch of Trudie Company. (2) All journal entries, including the adjustment of the Inventories Overvaluation ac- count, in the accounting records of the home office of Trudie Company.

Answer rating: 100% (QA)

a Assuming the perpetual inventory system is used by both the home office and Savoy Branch Savoy Branchs Journal Entries 1 When merchandise is receive... View the full answer