CASE 2 The home office consistently bills its branch for shipments at 120% of cost. However, shipments to branch are subject to 5% freight cost on billed price, which the home office prepays before shipment. The following information was taken from the records of the branch: Cash and cash equivalents, Jan. 1 Accounts receivable, Jan. 1 Inventory, Jan. 1 -From outside purchases -From home office (at billed price, freight-in) 66,000 258,000 54,000 378,000 432,000 Equipment, net, Jan. 1 Accounts Payable, Jan. 1 1,200,000 360,000 Sales 1,800,000 Shipments from home office at billed price, excluding freight-in Purchases Inventory, Dec. 31 -From outside purchases -From home office (at billed price, freight-in) 1,080,000 150,000 18,000 529,200 547,200 Requirements: Compute for the following: a. Beginning balance of the home office account b. Beginning and ending balances of inventory at cost c. Understatement or overstatement in the "cost of goods sold" and d. Understatement or overstatement in the "gross profit“ of the branch as far as the home office is concerned. Appliance Company reports gross profit on the installment basis. The following data are available: 2018 240,000 180,000 60,000 2019 2020 250,000 181,250 68,750 300,000 216,000 84,000 Installment sales Cost of goods - installment sales Gross profit Collections 2018 installment contracts 2019 installment contracts 2020 installment contracts 45,000 75,000 47,500 72,500 80,000 62,500 Defaults Unpaid balance of 2018 installment contracts Value assigned to repossessed merchandise Unpaid balance of 2019 installment contracts Value assigned to repossessed merchandise 12,500 6,500 15,000 6,000 16,000 9,000 1. What is the realized gross profit before loss on repossession for 2020? 2. What is the loss on repossession for 2020?