The manager of Q Corporation is recommending the closure of Branch B inder to eliminate its net loss of P33,750. The income statement shows:HomeBranchBranchOfficeAВSalesP800,000 P300,000 P500,000P400,000 P120,000 P250,00030,00020,00056,250P720,000 P226,250 | P533,750P73,750Cost of salesOperating expenses directly related to salesOperating expenses indirectly related to salesGeneral & administrative eTotal costs & expensesOperating income80,00090,000150,00080,000110,00093,750expenses allocatedP80,000P(33,750)If Branch B is closed, one personnel (with salary of P30,000) have to betransferred to the home office. Branch B has furniture costing P120,000 and with anestimated useful life of 5 years has to be transferred also to the home office.REQUIRED:1. Do you agree with the manager? Explain.

Answer: We do not agree with manager, as if Branch B is closed Net operating income for company will…

Answered: The manager of Q Corporation is…

The manager of Q Corporation is recommending the closure of Branch B in eler to eliminate its net loss of P33,750. The income statement shows;

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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