Lavender Company operates retail hobby shops from the main store and a branch store. Merchandise is shipped from the main store and to the branch and billed to the branch at an arbitrary 10% markup. Trial balances of the main store and branch as of December 31, 2020 are as follows: *see picture Inventories on hand at December 31, 2020 at the main store and branch are P3,000 and P1,800, respectively. The December 31, 2019 branch inventory includes merchandise purchased from outsiders of P300, and the December 31, 2020 branch inventory includes P150 of merchandise purchased from outsiders. The combined cost of goods sold amounted to:
Lavender Company operates retail hobby shops from the main store and a branch store. Merchandise is shipped from the main store and to the branch and billed to the branch at an arbitrary 10% markup. Trial balances of the main store and branch as of December 31, 2020 are as follows: *see picture Inventories on hand at December 31, 2020 at the main store and branch are P3,000 and P1,800, respectively. The December 31, 2019 branch inventory includes merchandise purchased from outsiders of P300, and the December 31, 2020 branch inventory includes P150 of merchandise purchased from outsiders. The combined cost of goods sold amounted to:
Chapter1: Financial Statements And Business Decisions
Section: Chapter Questions
Problem 1Q
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Question
Lavender Company operates retail hobby shops from the main store and a branch store. Merchandise is shipped from the main store and to the branch and billed to the
branch at an arbitrary 10% markup.
*see picture
Inventories on hand at December 31, 2020 at the main store and branch are P3,000 and P1,800, respectively. The December 31, 2019 branch inventory includes merchandise purchased from outsiders of P300, and the December 31, 2020 branch inventory includes P150 of merchandise purchased from outsiders. The combined cost of goods sold amounted to:
Transcribed Image Text:Main Store
Branch
Debits:
P 1,500
200
Cash
Accounts receivable – net
Inventory, December 31, 2017
Building – net
1,000
3.500
60,000
2.500
18,000
Equipment – net
Branch store
Purchases
Shipments from home office
Other expenses
Total debits
30,000
32,300
240,000
12,000
11,000
99,000
Z.00
P 150,500
15.000
P 382.500
Credits:
Accounts payable
Unrealized inverntory profit
Main Store
|Capital stock
Retained earnings
Sales
Shipments to branch
Profit from branch
Total credits
500
P 15,000
9,200
30,000
50,000
16,000
200,000
90,000
2,300
P 382,500
120,000
P 150,500
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