Question no.1: The cost of sales of the Makati Branch and the cost of sales of Makati Branch inventory at the end of the year? Choices: a. 140,000: 38,000 b. 108,800: 28,500 c. 136,000: 31,667 d. 102,000: 30,400

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Question no.1: The cost of sales of the Makati Branch and the cost of sales of Makati Branch inventory at the end of the year?

Choices:

a. 140,000: 38,000

b. 108,800: 28,500

c. 136,000: 31,667

d. 102,000: 30,400

 

At the beginning of the year, RJD Company establishes branches in Makati and
Cebu. The following transactions occur during the year.
The home office purchased equipment on account for P40,000 and
immediately transfer half of each to the two branches at cost
The home office transfers cash of P3,000 to the Makati branch and
ainu P5,000 to Cebu
The company sells inventory to unrelated parties at a 40% profit
and transfers inventory to its branches at cost. During the year, the
home office has sales of P175,000 to unrelated parties and transfers
Transcribed Image Text:At the beginning of the year, RJD Company establishes branches in Makati and Cebu. The following transactions occur during the year. The home office purchased equipment on account for P40,000 and immediately transfer half of each to the two branches at cost The home office transfers cash of P3,000 to the Makati branch and ainu P5,000 to Cebu The company sells inventory to unrelated parties at a 40% profit and transfers inventory to its branches at cost. During the year, the home office has sales of P175,000 to unrelated parties and transfers
inventory to the Makati branch at a P140,000 price and to the Cebu
branch at a P150,000 price.
The branch sells inventory, all acquired from the home office, at a
25% gross profit. Selected balance sheet accounts at the end of the
year are as follows:
Home Office
Makati
Cebu
Accts. Receivable
Inventory
Accts. Payable
Notes payable
Accum. Depreciation
P14,000
36,000
2,000
40,000
4,000
P28,000
45,000
20,000
30,000
28,000
P11,000
38,000
1,000
35,000
4,000
During the
and the Cebu branch transfers P151,000.
year, the Makati branch transfer P135,000 of cash to the home office
ulkati hranch and the cost of Makati branch inventory at
Transcribed Image Text:inventory to the Makati branch at a P140,000 price and to the Cebu branch at a P150,000 price. The branch sells inventory, all acquired from the home office, at a 25% gross profit. Selected balance sheet accounts at the end of the year are as follows: Home Office Makati Cebu Accts. Receivable Inventory Accts. Payable Notes payable Accum. Depreciation P14,000 36,000 2,000 40,000 4,000 P28,000 45,000 20,000 30,000 28,000 P11,000 38,000 1,000 35,000 4,000 During the and the Cebu branch transfers P151,000. year, the Makati branch transfer P135,000 of cash to the home office ulkati hranch and the cost of Makati branch inventory at
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