ABC Company's has two merchandise outlets, its main store in Davao City and its Cebu City branch. For control purposes, all purchases are made by the main store and shipped to the Cebu City branch at cost plus 10%. On January 1, 2021, the inventories of the main store in Davao City and Cebu 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 Cebu City branch. At December 31, 2021, the following journal entry to prepare the books for the next accounting period was prepared: Sales 32,000 4,840 Inventory Inventory Shipments from Main Store Expenses 3,960 17,600 10,480 4,800 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 Davao City and its Cebu City branch. For control purposes, all purchases are made by the main store and shipped to the Cebu City branch at cost plus 10%. On January 1, 2021, the inventories of the main store in Davao City and Cebu 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 Cebu City branch. At December 31, 2021, the following journal entry to prepare the books for the next accounting period was prepared: Sales 32,000 4,840 Inventory Inventory Shipments from Main Store Expenses 3,960 17,600 10,480 4,800 Main Store Compute for the amount of overvaluation that was realized from the branch sales.

FINANCIAL ACCOUNTING

10th Edition

ISBN:9781259964947

Author:Libby

Publisher:Libby

Chapter1: Financial Statements And Business Decisions

Section: Chapter Questions

Problem 1Q

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