A Corporation maintains a merchandise outlet in Ashton City aside from the main store. All purchases are made by the main store and some are shipped to the branch at cost plus 10%. On January 1, 2021, the main store and branch store inventories were 17,000 and 4,950, respectively. In 2021, the main store purchased merchandise costing 50,000 and shipped 40% of it to the branch. On December 31, 2021, the branch made the following closing entry: Sales 40,000 Inventory 6,050 Shipment from main store 22,000 Expenses 13,100 Inventory 4,950 Main store 6,000 Questions: A. What was the actual branch income for 2021 on a cost basis assuming generally accepted accounting principles? B. If the main store inventory at December 31, 2021, is 14,000, the combined main store and branch store inventory that should appear in Ceres Company’s balance sheet is? C. If the main store inventory at December 31, 2021, is 14,000, the combined cost of goods sold that should appear in Ceres’ income statement is?
A Corporation maintains a merchandise outlet in Ashton City aside from the main store. All purchases are made by the main store and some are shipped to the branch at cost plus 10%. On January 1, 2021, the main store and branch store inventories were 17,000 and 4,950, respectively. In 2021, the main store purchased merchandise costing 50,000 and shipped 40% of it to the branch. On December 31, 2021, the branch made the following closing entry:
Sales 40,000
Inventory 6,050
Shipment from main store 22,000
Expenses 13,100
Inventory 4,950
Main store 6,000
Questions:
A. What was the actual branch income for 2021 on a cost basis assuming generally accepted accounting principles?
B. If the main store inventory at December 31, 2021, is 14,000, the combined main store and branch store inventory that should appear in Ceres Company’s balance sheet is?
C. If the main store inventory at December 31, 2021, is 14,000, the combined cost of goods sold that should appear in Ceres’ income statement is?
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