The home office consistently billed its branch 130% of cost and the following data were ascertained for the year 2020 for the home office and branch: Home Office Sales P370,500 Branch 400,000 Purchases 288,900 124,800 Shipments 178,800 ? OPEX 75,300 45,900 Home Office Branch Beginning Inventory 12,500 Home Office Ending Inventory 50,700 Vendors 35% of total branch beginning inventory 35,700 Home Office 62% of total branch ending inventory Vendors 1. What is the cost of goods sold reported by the branch? 30,875 2. What is the balance of the mark-up on the merchandise available for sale from the home office? 3. What is the combined ending inventory?

The home office consistently billed its branch 130% of cost and the following data were ascertained for the year 2020 for the home office and branch: Home Office Sales P370,500 Branch 400,000 Purchases 288,900 124,800 Shipments 178,800 ? OPEX 75,300 45,900 Home Office Branch Beginning Inventory 12,500 Home Office Ending Inventory 50,700 Vendors 35% of total branch beginning inventory 35,700 Home Office 62% of total branch ending inventory Vendors 1. What is the cost of goods sold reported by the branch? 30,875 2. What is the balance of the mark-up on the merchandise available for sale from the home office? 3. What is the combined ending inventory?

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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Question

The home office consistently billed its branch 130% of cost and the following data were ascertained
for the year 2020 for the home office and branch:
Home Office
Branch
Sales
P370,500
288,900
178,800
75,300
400,000
124,800
?
Purchases
Shipments
OPEX
45,900
Home Office
Branch
Beginning Inventory
50,700
Vendors 35% of total branch beginning inventory
35,700 Home Office 62% of total branch ending inventory
30,875
12,500 Home Office
Ending Inventory
Vendors
1. What is the cost of goods sold reported by the branch?
2. What is the balance of the mark-up on the merchandise available for sale from the home office?
3. What is the combined ending inventory?

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Step 1: Define COGS, Balance on Markup & Combined Inventory

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Step 2: Calculate the Cost of Goods Sold

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Step 3: Calculate the balance of the markup on the merchandise

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Step 4: Calculate the Combined Ending Inventory

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