Home Office Books P 360,000 119,880 Branch Books Shipments to branch Allowance for overvaluation of branch inventory Shipments from home office Purchases (from outsiders) Merchandise inventory, January 1 Merchandise inventory, December 31 Sales P 468,000 173,520 65,520 58,500 648,000

FINANCIAL ACCOUNTING
10th Edition
ISBN:9781259964947
Author:Libby
Publisher:Libby
Chapter1: Financial Statements And Business Decisions
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5. Presented below are items taken from the unadjusted trial balance of the Company and its branch on December 31, 2021. It is the company’s policy to bill all branches for merchandise shipments at 30% above cost. Determine: a. How much of the branch inventory on January represents purchases from outsiders? b. Assuming that the branch ending inventory acquired from home office is P 46,800 at billed price, what is the net income (loss) of the branch insofar as the home office is concerned?
Home Office
Books
P 360,000
119,880
Branch Books
Shipments to branch
Allowance for overvaluation of branch inventory
Shipments from home office
Purchases (from outsiders)
Merchandise inventory, January 1
Merchandise inventory, December 31
Sales
P 468,000
173,520
65,520
58,500
648,000
61,200
Expenses
Transcribed Image Text:Home Office Books P 360,000 119,880 Branch Books Shipments to branch Allowance for overvaluation of branch inventory Shipments from home office Purchases (from outsiders) Merchandise inventory, January 1 Merchandise inventory, December 31 Sales P 468,000 173,520 65,520 58,500 648,000 61,200 Expenses
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