Compute for the realized profit in branch inventory. The following information is extracted from the books and records of Elaine Company and its branch. The balances are atDecember 31, 2012 of the company's operations.Home OfficeBranchSalesP260,000P 78,000Shipments to branchShipments from home officePurchases104,00039,00078,00D26,000ExpensesInventory, January 1, 2012Allowance for overvaluation of branch inventory31,200However, no shipments in transit between home office and the branch were made. Both shipments accounts areproperly recorded. The ending inventory includes merdhandise acquired from the home office in the amount ofP26,000 and P7,800 acquired from outsiders acquired from the home office in the amount of P26,000 and P7,800acquired from outsiders for a total of P33,800.

Meaning of Branch Accounting Branch Accounting is a system in which separate books of accounts are…

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Business

Accounting

Compute for the realized profit in branch inventory.

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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Question

100%

Compute for the realized profit in branch inventory.

The following information is extracted from the books and records of Elaine Company and its branch. The balances are at
December 31, 2012 of the company's operations.
Home Office
Branch
Sales
P260,000
P 78,000
Shipments to branch
Shipments from home office
Purchases
104,000
39,000
78,00D
26,000
Expenses
Inventory, January 1, 2012
Allowance for overvaluation of branch inventory
31,200
However, no shipments in transit between home office and the branch were made. Both shipments accounts are
properly recorded. The ending inventory includes merdhandise acquired from the home office in the amount of
P26,000 and P7,800 acquired from outsiders acquired from the home office in the amount of P26,000 and P7,800
acquired from outsiders for a total of P33,800.

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