MOUNTAIN VIEW COLLEGE
SCHOOL OF BUSINESS AND ACCOUNTANCY
ACCOUNTING FOR SPECIAL TRANSACTIONS
WORKSHEET#10: HOME OFFICE, BRANCH & AGENCY
INSTRUCTIONS: Answers and all necessary solutions to the requirements must be written in a clean
sheet of paper (all in good form). Submission format must be image file(png or
jpeg) or pdf file.
PROBLEM #1
On January 1, 2021, Melon Company establishes its first branch in Bulacan. Separate books are to be kept by the
branch, and financial statements of the branch are to be submitted to the home office at the end of each month. It
is the policy of Melon Company to carry the depreciable assets of the branch on the books of the home office.
Melon bills its branch for inventory shipments at 25% above cost. Transactions of the branch for the first month
of operations are as follows:
a. Received cash of P80,000 from the home office.
b. Purchased equipment with a five–year life for P40,000 cash. All depreciable assets acquired during the
period are depreciated for the full period in the year of acquisition and no depreciation is recognized in
the period of disposition.
