Reference no: EM132832753

On December 31, 2000, the branch current ledger account in the accounting records of HO of Berlin Company shows a debit balance of 55,000. You ascertained the following facts in analyzing this accounts:

a. On December 31, 2000, merchandised billed at 5,800 was in transit from the HO office of the branch . The periodic inventory systems is used by both the HO and the branch.

b. The branch had collected HO trade accounts receivable of 560; the HO was not notified.

c. On Dec. 29, 2000, the HO had mailed a check for 2,000 to the branch, but the accountant for the HO had recorded the check as a debit to the Charitable Contribution expense ledger account; the branch had not received the check as of Dec. 31, 2000.

d. Branch net income for December 2000, was recorded erroneously by the HO at 840 instead of 480. The credit was recorded by the HO in the Branch Income Summary ledger account.

e. On December 29, 2000, the branch had return supplies costing 220 to the HO; the HO had not reported the receipt of the supplies. The HO records acquisitions of supplies in the Office Supplies ledger account.

f. Acquisitions of equipment by the branch 1,500. The equipment account is to be maintained in the HO books. The HO had not been notified of the acquisition.

g. A branch customer erroneously retained 1,000 to the HO. The HO recorded this cash collection on Dec. 29, 2000. Meanwhile, back at the branch , no entry has been made yet.

Problem 1) The unadjusted balance of the HO current account on the books of the branch as of December 31, 2000:

a. 53,180
b. 51,180
c. 49,180
d. 48,620

Problem 2) The adjusted balance of the reciprocal account on December 31, 2000:

a. 50,180
b. 54, 480
c. 55, 980
d. 56, 980