Home Office Branch Books P 720,000 240,000 Books Sales Expenses Shipments from home office Allowance for overvaluation of branch inventory 432,000 P 87.000

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?

Home Office
Branch Books
P 720,000
240,000
Books
Sales
Expenses
Shipments from home office
Allowance for overvaluation of branch inventory
432,000
P 87.000
Transcribed Image Text:Home Office Branch Books P 720,000 240,000 Books Sales Expenses Shipments from home office Allowance for overvaluation of branch inventory 432,000 P 87.000
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