ABC Company's has two merchandise outlets, its main store in Baguio City and its San Fernando City branch. For control purposes, all purchases are made by the main store and shipped to the San Fernando City branch at cost plus 10%. on January 1, 2021, the inventories of the main store in Baguio City and the San Fernando City branch are P13,600 and P3,960, respectively. During 2021, the main store purchases merchandise costing P40,000 and shipped 40O% of it to the San Fernando City branch. At December 31, 2021, the following journal entry to prepare the books for the GRAPED KAM next accounting period was prepared: Sales 32,000 4,840 Inventory Inventory Shipments from Main Store 3,960 17,600 10,480 4,800 Еxpenses Main Store Compute for the amount of overvaluation that was realized from the branch sales.
ABC Company's has two merchandise outlets, its main store in Baguio City and its San Fernando City branch. For control purposes, all purchases are made by the main store and shipped to the San Fernando City branch at cost plus 10%. on January 1, 2021, the inventories of the main store in Baguio City and the San Fernando City branch are P13,600 and P3,960, respectively. During 2021, the main store purchases merchandise costing P40,000 and shipped 40O% of it to the San Fernando City branch. At December 31, 2021, the following journal entry to prepare the books for the GRAPED KAM next accounting period was prepared: Sales 32,000 4,840 Inventory Inventory Shipments from Main Store 3,960 17,600 10,480 4,800 Еxpenses Main Store Compute for the amount of overvaluation that was realized from the branch sales.
Chapter1: Financial Statements And Business Decisions
Section: Chapter Questions
Problem 1Q
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![ABC Company's has two merchandise outlets, its main store in Baguio City and its San Fernando City branch. For control purposes, all purchases are
made by the main store and shipped to the San Fernando City branch at cost plus 10%. on January 1, 2021, the inventories of the main store in
Baguio City and the San Fernando City branch are P13,600 and P3,960, respectively. During 2021, the main store purchases merchandise costing
P40,000 and shipped 40% of it to the San Fernando City branch. At December 31, 2021, the following journal entry to prepare the books for the
next accounting period was prepared:
GRAPED EXAM
Sales
32,000
4,840
Inventory
Inventory
3,960
Shipments from Main Store
Expenses
17,600
10,480
Main Store
4,800
Compute for the amount of overvaluation that was realized from the branch sales.](/v2/_next/image?url=https%3A%2F%2Fcontent.bartleby.com%2Fqna-images%2Fquestion%2F63811af0-e475-43f3-97f7-7328f538422c%2F3e1bec2f-caf2-44d5-bb3e-f8a4cb4d360f%2Fe0vpsrj_processed.png&w=3840&q=75)
Transcribed Image Text:ABC Company's has two merchandise outlets, its main store in Baguio City and its San Fernando City branch. For control purposes, all purchases are
made by the main store and shipped to the San Fernando City branch at cost plus 10%. on January 1, 2021, the inventories of the main store in
Baguio City and the San Fernando City branch are P13,600 and P3,960, respectively. During 2021, the main store purchases merchandise costing
P40,000 and shipped 40% of it to the San Fernando City branch. At December 31, 2021, the following journal entry to prepare the books for the
next accounting period was prepared:
GRAPED EXAM
Sales
32,000
4,840
Inventory
Inventory
3,960
Shipments from Main Store
Expenses
17,600
10,480
Main Store
4,800
Compute for the amount of overvaluation that was realized from the branch sales.
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