The home office sent merchandise costing P300,000 to Branch 1 at a gross profit of 20%. Freight on shipment paid by the home office is 2% of the billed price. After two days, Branch 2 encountered inventory shortage and the Branch 1 was instructed to shipped to Branch 2 the 60% of the inventory sent by the home office. Shipment to Branch 2 resulted to a transportation cost of P5,000 paid by Branch 1. The freight if the shipment will come directly from home office to Branch 2 is P8,000. The freight cost is assumed to be incurred on per unit basis. Journalized the transaction in the books of Home Office, Branch 1, and Branch 2.
The home office sent merchandise costing P300,000 to Branch 1 at a gross profit of 20%. Freight on shipment paid by the home office is 2% of the billed price. After two days, Branch 2 encountered inventory shortage and the Branch 1 was instructed to shipped to Branch 2 the 60% of the inventory sent by the home office. Shipment to Branch 2 resulted to a transportation cost of P5,000 paid by Branch 1. The freight if the shipment will come directly from home office to Branch 2 is P8,000. The freight cost is assumed to be incurred on per unit basis. Journalized the transaction in the books of Home Office, Branch 1, and Branch 2.
Chapter1: Financial Statements And Business Decisions
Section: Chapter Questions
Problem 1Q
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Journalize the transaction in the books of Home Office, Branch 1, and Branch 2.
Transcribed Image Text:The home office sent merchandise costing P300,000 to Branch 1 at a gross profit of
20%. Freight on shipment paid by the home office is 2% of the billed price. After
two days, Branch 2 encountered inventory shortage and the Branch 1 was
instructed to shipped to Branch 2 the 60% of the inventory sent by the home office.
Shipment to Branch 2 resulted to a transportation cost of P5,000 paid by Branch 1.
The freight if the shipment will come directly from home office to Branch 2 is
P8,000. The freight cost is assumed to be incurred on per unit basis.
Journalized the transaction in the books of Home Office, Branch 1, and Branch 2.
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