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(6-10) Use the following...

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Accounting

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(6-10) Use the following data to answer questions (6 through 10). The home office of Lulu Supermarket sent goods that cost $20,000 to Ajman branch at a 25% mark-up. The branch sold all the goods for $32,000 and sent cash of $22,000 at the end of the period to the home office. The home office charged the branch with $5,000 of its salaries expense. (6) The investment in the branch account is debited by: a) $8,000 b) $25,000 c) $30,000 d) None of the above (7) The home office account is credited by: a) $20,000 b) $30,000 c) $17,000 d) None of the above. (8) The net income reported by the branch is: a) $12,000 b) $7,000 c) $10,000 d) None of the above. (9) The salaries expense transaction in the home office is recorded as: a) debit home office and credit cash of $5,000. b) debit salaries expense and credit cash $5,000. c) debit investment in branch and credit salaries expense $5,000. d) No transaction (10) The reciprocal account balance shows the following balances: a) debit investment in branch and credit home office of $20,000. b) debit home office and credit investment in branch $25,000 c) debit investment in the branch of $35,000 and home office of $20,000 d) None of the above

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