HOBA FORMULA AND NOTES Flashcards
Net Profit or Loss
Sales
( COGS )
\_\_\_\_\_\_\_\_\_
GP
( Expenses)
\_\_\_\_\_\_\_\_\_
Net P/LCOGS
Purchases or Merchandise - Ending Inventory
Merchandise
from Main Office or Home Office
- home office (maybe W/ mark up) AOI
- branch - Billed Price
Purchase
from Outside Supplier ( Always Billed Price)
Sales, purch, expenses NOTES
if may End AR, AP, or unused expenses paki Calculate to get the real ending
N P/L branch as HO is concerned
N P/L of branch deduct AOI
COGS
BI \+ Puch (HO and Outsider) \_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_ TGAS - EI (HO & Outsider) \_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_ COGS
- all at cost except outsider
GP of Branch
Sales - COGS - OPEX = GP
AOI
pag may binigay un ung aoi ng tgas. AOI - EI AOI = AOI for the month ended or year
NOTES
The following data should be considered in reconciling the two accounts:
- Debits in investment in branch account without corresponding credits in the home office account
- Credits in the investment in branch account without corresponding debits in the home office account
- Debits in home office account without corresponding credits in the investment in branch account
- Credits in the home office account without corresponding debits in the investment in branch account
NOTES
The following are the reconciling items:
- Transfers in transit-These are shipments made by either a branch or home office which have been not yet received by either party.
- Unrecorded debit and credit memos. Concept of Debit and Credit Memo:
A. If the home office sent DEBIT MEMO, it means the home office debited the investment in branch account is debited and therefore the branch should credit home office account.
B. If the branch send DEBIT MEMO, it means that the branch debited the home office account, therefore requiring a credit in the investment in branch account
C. If the home office sent CREDIT MEMO, it means the home office credited the investment in branch account and therefore requiring the branch to debit home office account.
D.If the branch sent CREDIT MEMO, it means branch credited the home office account and therefore requiring the home office to debit the investment in branch account.
3.Errors. As a rule, whoever committed the error should adjust. This may be double recording or omission of records.
JE : Initial Investment
HO Books
Inv in branch xx
cash xx
Branch Book
Cash xx
Home office xx
BRANCH Property Carried in branch Book (Acquires)
HO Books - no entry no entry
Branch book
Equip xx Depn Expense xx
cash xx Acc Dep xx
BRANCH property carried in HO books
HO Books
Equipt xx Inv In Branch xx
Inv In Branch xx Acc dep - branch xx
Branch Book
Home Office xx Dep Exp xx
cash xx Home Office xx
- charged to branch kasi sya gumagamit at nag memaintain
HO Property carried in Branch Book
HO Book
Inv In Branch xx No entry
cash xx
Branch Book
Furniture xx Dep Exp xx
HO xx Acc Dep - furniture xx
HO property in HO book but possession and use of equipt is transferred to branch
HO book
Furniture - branch xx No entry
Cash xx
Branch Book
Inv in Branch xx Dep Exp xx
Acc Dep xx HO xx
Freight Paid by HO
HO Book
Inv in branch xx
Shipment to branch xx
cash xx
Branch Book
Shipments from HO xx
Freight In xx
HO xx
Freight paid by branch
HO books
Inv In branch xx
Ship to Branch xx
Branch book
Ship from HO xx
Freight in xx
HO xx
Cash xx
*not charged to inv in branch and HO
NOT DEDUCTED KASI SEPERATE BINAYADAN
Purch from Outsider on account
HO - No entry
Branch
Purch xx
freight in xx
AP xx
cash xx
Rev on Account branch
HO - No entry
Branch
AR xx
sales xx
Collection by branch from AR
HO - No entry
branch
Cash xx
AR xx
Remitance to HO
HO
Cash xx
Inv in branch xx
Branch
HO xx
Cash xx
Branch incurs various op exp
HO - No entry
Branch
Var Op exp Acc xx
Cash xx
Accrued Exp xx
HO alloc exp to branch
HO
Inv in branch xx
util exp xx
Gen over exp xx
Branch
Util exp xx
gren over exp xx
HO xx
