Use the following information for the next two questions: Shipments received from the home office are billed at 120% above cost. During the year, the branch received shipments billed at ₱480,000 and returned damaged goods with billed price of ₱96,000. The branch has an ending inventory of ₱120,000, at billed price. The branch reported loss of ₱40,000 in its individual financial statements. Q1: How much is the balance of the “allowance for markup” account before year- end adjustments? Q2: How much is the true profit of the branch to be taken up in the home office books? Problem #10: The home office bills shipments of merchandise to its branch at a markup of 20% based on cost. At the beginning of the period, the “Allowance for markup” account has a credit balance of ₱8,000. During the period, the home office made shipments of goods worth ₱960,000, at cost. The branch reported an ending inventory of ₱480,000, at billed price. How much is the realized mark-up?
Use the following information for the next two questions:
Shipments received from the home office are billed at 120% above cost. During the
year, the branch received shipments billed at ₱480,000 and returned damaged goods
with billed price of ₱96,000. The branch has an ending inventory of ₱120,000, at billed
price. The branch reported loss of ₱40,000 in its individual financial statements.
Q1: How much is the balance of the “allowance for markup” account before year-
end adjustments?
Q2: How much is the true profit of the branch to be taken up in the home office
books?
Problem #10:
The home office bills shipments of merchandise to its branch at a markup of 20% based
on cost. At the beginning of the period, the “Allowance for markup” account has a credit
balance of ₱8,000. During the period, the home office made shipments of goods worth
₱960,000, at cost. The branch reported an ending inventory of ₱480,000, at billed price.
How much is the realized mark-up?
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