Sparta Company set up a branch in a province. The entity and its branch provided the following data for the second year of branch operation: Home Office Branch Sales revenue to outside customers P2,000,000 100,000 800,000 400,000 P100,000 60,000 200,000 Beginning inventory Purchases from outside supplier Shipment to branch Shipment from home office Ending inventory Operating expenses • The home office to branch markup based on cost is 25% this year and last year. • Twenty percent (20%) of the beginning inventory came from an outside supplier. 160,000 300,000 500,000 100,000 80,000 Twenty-four percent (24%) of the ending inventory of the branch came from last year's shipment from the home office, while 50% came from the current year's shipment from the home office. REQUIRED: Determine the following: 4. Individual net income of the branch 5. Total ending inventory to be reported in the combined balance sheet 6. Combined net income

Sparta Company set up a branch in a province. The entity and its branch provided the following data for the second year of branch operation: Home Office Branch Sales revenue to outside customers P2,000,000 100,000 800,000 400,000 P100,000 60,000 200,000 Beginning inventory Purchases from outside supplier Shipment to branch Shipment from home office Ending inventory Operating expenses • The home office to branch markup based on cost is 25% this year and last year. • Twenty percent (20%) of the beginning inventory came from an outside supplier. 160,000 300,000 500,000 100,000 80,000 Twenty-four percent (24%) of the ending inventory of the branch came from last year's shipment from the home office, while 50% came from the current year's shipment from the home office. REQUIRED: Determine the following: 4. Individual net income of the branch 5. Total ending inventory to be reported in the combined balance sheet 6. Combined net income

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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