Analyse the issue(s)/problem(s) faced by SSB by referring to the MFRS 137 Provisions, Contingent Liabilities and Contingent Assets (CTPS Question –Problem analysis)
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Analyse the issue(s)/problem(s) faced by SSB by referring to the MFRS 137 Provisions,
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- Beta Corp. has a branch in Davao City established on May 31, 2022. During 2022, the home office shipped merchandise costing P110,000 to the branch, billed at 110% of cost. At the end of the year, the branch reported sales of P200,000, operating expenses of P80,000, and a net income from its operation of P10,000. Determine the true net income of the branch.Jitra Bhd (JB) sells health care product. Following is the information for its inventory for the month of December 2021. Date Transactions I Dec Inventory on hand consists of 500 units at RM14 each. 8 Dec Sold merchandise for RM9,000 (300 units @ RM30), f.o.b. destination, to a customer in Ampang, Kuala Lumpur. The customer was scheduled d receive the merchandise on 9 December 2021. Purchased merchandise costing RM10,500 (700 units @ RMI5) from a vendor, f.o.b. shipping point, 2/10, n/30. The merchandise was received on 14 December 2021. The transportation cost was RM140. 10 Dec 15 Dec Purchased merchandise costing RM6,200 (400 units @ RM15.50) from a vendor, f.o.b. destination, 2/10, n/30. The merchandise was received on 19 December 2021. The transportation cost was RM80. 20 Dec Sold merchandise for RM15,000 (500 units @ RM30), f.o.b. shipping point, to a customer in Sungai Petani, Kedah. The customer was scheduled to receive the merchandise on 22 December 2021. 27 Dec Purchased…Statsen Company, which prepares financial reports at the end of the calendar year, established a branch on July 1, 2020. The following transactions occurred during the formation of the branch and its first six months of operations, ending December 31, 2020. 1. The Home Office sent $35,000 cash to the branch to begin operations. 2. The Home Office shipped inventory to the branch. Intercompany billings totaled $75,000, which was the Home Office's cost. 3. The branch acquired merchandise display equipment which cost $15,000 on July 1, 2020. (Assume that branch fixed assets are carried on the home office books). 4. The branch purchased inventory costing $53,750 from outside vendors on account. 5. The branch had credit sales of $106,250 and cash sales of $43,750. Requirements: 1. Prepare journal entries in the books of the home office and in the books of the branch office for the above transaction
- Cebu branch of Nimbus Company submitted the following data for 2021, its first year of operation: Sales 203, 500 Shipments from home office 186, 120 Operating expenses 18, 755 Home Office Current 48. 125 Shipments to the branch are billed at cost. The December 31 inventory of the branch was P25, 245. What is the correct balance on December 31, 2021 of the Branch Current account per home office books?Alpha Corp. has a branch in Pasig City established on May 31, 2021. During 2021, the home office shipped merchandise to the branch at billed value of 125,000 which was 25% above cost. At the end of the year, the branch reported sales of 200,000, operating expenses of 95,000, and a net income from its operation of 15,000. What is the branch's true net income?ABC Company operates a number of branches. On December 31, 2022, its Mindanao branch showed a Home Office Account balance of P547,000 and the home office books showed an Investment in Mindanao branch of P511,000. The following information are made available: 1. A P300,000 shipment, originally intended and charged to Luzon branch was actually shipped to Mindanao branch. 2. Home office was charged for P24,000 for merchandise returned by Mindanao branch on December 30. The home office has not yet received the said merchandise. 3. A P240,000 shipment was charged by the home office to Mindanao branch. However, it was actually shipped and retained by Visayas branch. 4. A P40,000 cash transfer from Visayas was not taken up in the books of the home office. 5. Home office collected P72,000 of the accounts receivable of Mindanao. The branch was not notified of the collection. 6. The home office recorded Mindanao net income at P325,500. However, the correct net income of the branch is P253,500.…
- Entity A is a listed company in Hong Kong that hires out motor trucks to its part-time drivers to generate revenue. The draft accounts at the end of the reporting period of 31 December 2017 included the motor trucks which were bought on 1 January 2015. The economic life of the motor trucks is 6 years. These motor trucks were purchased from Entity B on credit. The listed price was $9,859,375. Entity B always provides a trade discount of 4.00% to Entity A due to its good business relationship. Under the contract, it will be settled by cheque on 15 January 2015 and 15 March 2015 by two payments of 60.00% and 40.00% respectively. Entity A is also responsible for disposing of these motor trucks to the scrap yard for recycling after 6 years. The removal cost of $106,600 will be incurred on 31 December 2020. The delivery cost of $25,028 was incurred on 1 January 2015 by paying a cheque to Entity C. On 31 December 2017, due to the world trade war, Entity A expected the market would move…Cintas designs, manufactures, and implements corporate identity uniform programs that it rents or sells to customers throughout the United States and Canada. The company’s stock is traded on the NASDAQ and has provided investors with significant returns over the past few years. Selected information from the company’s balance sheet follows. For 2012, the company reported sales revenue of $3,707,900 and cost of goods sold of $1,517,415.A. Camy Enterprise is a wholesaler company that sells various types of kitchenware. The following is the list of transactions in December 2021. Dec 2 Makes a payment of RM220,500 to Yuhan Sdn Bhd for the pressure cooker purchased on 18 October 2021. 6 Purchases 25 units of frying pans from The King Ware Sdn Bhd with a total cost of RM7,000 by account. The credit term is 5/15, n/45. The frying pans were delivered with an agreement of F.O.B shipping point that cost RM100. 11 Sells 32 units of steamers to Pan Asia Nusantara Resort at a total sales price of RM9,600. The cost of the steamer is RM220 per unit. The transaction was made by cash. Accepts a return of two units of steamers from Pan Asia Nusantara Resort due to a slight dent on the steamers. Camy Enterprise made full cash return to Pan Asia Nusantara Resort. 16 A unit of frying pan is returned to The King Ware Sdn Bhd due to the wrong size and the outstanding balance owed is reduced by RM280. 18 Golden Chef Cullinary College…
- Bea Corp. has a branch in Divisoria established on May 31, 2022. During 2022, the home office shipped merchandise costing P110,000 to the branch, billed at 110% of cost. At the end of the year, the branch reported sales of P200,000, operating expenses of P80,000, and a net income from its operation of P10,000. Determine the true net income of the branch.On January 1, 2022, first year of operations, Manila Company opened a branch in Bacolod and the following transactions were ascertained from the year: Manila Co. sent P150,000 worth of merchandise to its Bacolod branch. Manila Co. purchased merchandise from vendors worth P280,000. Sales for Manila Co. and Bacolod were P350,000 and P175,000, respectively. Bacolod remitted P35,000 cash to its home office. Manila Co. incurred, but not yet paid P60,000 worth of expenses of which 30% was allocated to the branch during the year. Ending inventory for Bacolod Co. and Manila Co. were P15,500 and P23,500, respectively. 1. What is the balance of the Branch Current Bacolod for the year ended December 31, 2022? (Assuming reciprocal accounts have not yet been eliminated) 2. What is the cost of goods sold reported by Manila Co. for the year ended December 31, 2022?A. P 264,500B. P 414,500C. P 114,500D. P 106,500B. MultiDuo Bhd is a multinational company producing semiconductor product since 2000. The semiconductor products are exported to Middle East, Hong Kong and Taiwan. The financial year end of the company is 31 March 2018. The company’s financial statements were authorised for issue by the board of directors on 30 June 2018. Following are among events that occurred in 2018. 1. On 15 June 2018, a flash flood destroyed one-third of a factory of MultiDuo Bhd and caused severe damaged to its semiconductor inventory. The carrying amounts of the factory and the inventory were RM20 million and RM5 million, respectively. The company is entitled to be reimbursed for the damages amounting RM15 million from insurance company. 2. The civil suit was brought against MultiDuo Bhd before the end of financial year. The lawyer advised the company that MultiDuo Bhd would lose the case and suffer a loss of RM1.5 million. On 25 May 2018, MultiDuo Bhd and the complainant agreed to settle it out of court…