Advanced Accounting Vol. 1

CHAPTER 12

MULTIPLE CHOICE

12-1: d. This is recorded when the working fund is replenished.

12-2: c.

Sales P 700,000 Cost of goods sold: Purchases P800,000 Merchandise inventory, end 180,000 620,000 Gross profit P 80,000 Expenses 198,000 Net income (loss) P (118,000)

12-3: b

Sales P 70,000 Cost of goods sold (P70,000 / 140%) 50,000 Gross profit P 20,000 Less: Samples (P8,000 – P6,000) P 2,000 Expenses 2,800 4,800 Net income P 15,200

12-4: a

Sales P 100,000 Cost of goods sold 72,000 Gross profit P 28,000 Expenses (P9,000 + P4,500) 13,500 Net income P 14,500

12-5: a

12-6: a

12-7: c

12-8 a

Shipment of merchandise to home office P 80,000
Equipment sent to home office 50,000
Expenses assigned to branch by the home office 8,000
Cash remittance to home office (40,000)
Home office account balance P 98,000

12-9: d

12-10: a

Home Office account balance before closing, Dec. 32, 1008 P 35,000 Net income (loss) Sales P147,000 Cost of cost goods sold Shipment to branch P135,000 Inventory, 12/31 18,500 116,500 Gross profit P 30,500 Expenses 13,500 17,000 Home Office account balance (Investment in Branch account balance) P 52,000

Shipment to Branch account has no beginning balance, because this was closed at the end of 2008.

12-11: b Jan. 1, 2008 Jan. 1, 2009 Petty cash fund P 6,000 P 6,000 Accounts receivable 86,000 98,000 Inventory 74,000 82,000 Home Office account balance P166,000 P186,000

12-12: d

(Branch Books) (Home Office Books) Home Office Investment in Branch Unadjusted balances, Dec. 31 P