On an educational website, the image may be described as follows: The image provides data regarding a branch office's financials after merchandise destruction due to a flood. It includes a table with two columns labeled "Home Office Books" and "Branch Books." 1. **Sales**: The branch reported sales of P 720,000. 2. **Expenses**: The expenses recorded amounted to P 240,000. 3. **Shipments from Home Office**: The branch received shipments totaling P 432,000 from the home office. 4. **Allowance for Overvaluation of Branch Inventory**: Under the "Home Office Books" column, there's an allowance of P 87,000 listed for the overvaluation of branch inventory. **Note:** The table helps determine the cost of merchandise destroyed by the flood, which was calculated without insurance coverage.

On an educational website, the image may be described as follows: The image provides data regarding a branch office's financials after merchandise destruction due to a flood. It includes a table with two columns labeled "Home Office Books" and "Branch Books." 1. Sales: The branch reported sales of P 720,000. 2. Expenses: The expenses recorded amounted to P 240,000. 3. Shipments from Home Office: The branch received shipments totaling P 432,000 from the home office. 4. Allowance for Overvaluation of Branch Inventory: Under the "Home Office Books" column, there's an allowance of P 87,000 listed for the overvaluation of branch inventory. Note: The table helps determine the cost of merchandise destroyed by the flood, which was calculated without insurance coverage.

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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The Branch of the Company is billed for merchandise by the home office at 20% above cost. The branch in turn, prices merchandise for sales purposes at 25% above billed price. On February 28, all of the branch merchandise is destroyed by flood. No insurance was maintained. Branch accounts show the following information (see image below). What was the cost of merchandise destroyed by the flood?
7. The inventory was destroyed by fire on December 31. The following data were obtained from the accounting records: