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Problem IV Victor Company operates a branch in Cebu. Selected accounts were taken from December 31 books of the aurrent year. Financial statements of Victor and its branch are as follows: Branch Home Office 6,900,000 1,750,000 3,765,000 Sales Shipment to Branch Shipment from Home Office Inventory, Jan. 1 Inventory, Jan. 31 Purchases Allo. for overvaluation of inventory Expenses 800,000 640,000 6,800,000 452,500 356,000 2,187,500 120,000 250,000 1,000,000 250,000 1. The net income reported by the branch 2. Overstatement of branch cost of sales as far as home office is concerned

Problem IV Victor Company operates a branch in Cebu. Selected accounts were taken from December 31 books of the aurrent year. Financial statements of Victor and its branch are as follows: Branch Home Office 6,900,000 1,750,000 3,765,000 Sales Shipment to Branch Shipment from Home Office Inventory, Jan. 1 Inventory, Jan. 31 Purchases Allo. for overvaluation of inventory Expenses 800,000 640,000 6,800,000 452,500 356,000 2,187,500 120,000 250,000 1,000,000 250,000 1. The net income reported by the branch 2. Overstatement of branch cost of sales as far as home office is concerned

FINANCIAL ACCOUNTING
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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Problem IV Victor Company operates a branch in Cebu. Selected accounts were taken from Deember 31 books of the aurrent year. Financial statements of Victor and its branch are as follows: Home Office Branch 3,765,000 6,900,000 1,750,000 Sales Shipment to Branch Shipment from Home Office Inventory, Jan. 1 Inventory, Jan. 31 Purchases 800,000 640,000 6,800,000 452,500 356,000 2,187,500 120,000 250,000 1,000,000 Allo. for overvaluation of inventory Expenses 250,000 1. The net income reported by the branch 2. Overstatement of branch cost of sales as far as home office is concerned Problem V
Transcribed Image Text:Problem IV Victor Company operates a branch in Cebu. Selected accounts were taken from Deember 31 books of the aurrent year. Financial statements of Victor and its branch are as follows: Home Office Branch 3,765,000 6,900,000 1,750,000 Sales Shipment to Branch Shipment from Home Office Inventory, Jan. 1 Inventory, Jan. 31 Purchases 800,000 640,000 6,800,000 452,500 356,000 2,187,500 120,000 250,000 1,000,000 Allo. for overvaluation of inventory Expenses 250,000 1. The net income reported by the branch 2. Overstatement of branch cost of sales as far as home office is concerned Problem V
Problem VI Win Company has a branch in JAA City. JAA receives all its merchandise from Win at 25% above cost and sells them at 40% markup on cost. Win also sells merchandise to outsiders at 40% above cost. Below are excerpts from the trial balances of Win and JAA. Win 5,880,000 6,250,000 350,000 2,000,000 JAA 3,360,000 330,000 200,000 Sales Purchases Beginning inventory Shipments to Branch Shipments from HO Allowance for Overvaluation Ending inventory Operating expenses 2,375,000 540,000 1,200,000 325,000 This c 1. Branch ending inventory B Useful 2. True net income of the branch
Transcribed Image Text:Problem VI Win Company has a branch in JAA City. JAA receives all its merchandise from Win at 25% above cost and sells them at 40% markup on cost. Win also sells merchandise to outsiders at 40% above cost. Below are excerpts from the trial balances of Win and JAA. Win 5,880,000 6,250,000 350,000 2,000,000 JAA 3,360,000 330,000 200,000 Sales Purchases Beginning inventory Shipments to Branch Shipments from HO Allowance for Overvaluation Ending inventory Operating expenses 2,375,000 540,000 1,200,000 325,000 This c 1. Branch ending inventory B Useful 2. True net income of the branch
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