What is the cost of merchandise destroyed by fire

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Question - Branch A of HSK Company is billed for merchandise by the home office at 120% of cost. The branch in return bills its customer at 125% of cost. On January 15 all of the branch merchandise were destroyed by the fire except some goods priced to sell for P12,000. No insurance was maintained.

Branch book shows the following information:

Merchandise Inv, January 1 P52,800

Shipment from home office 40,000 Sales 30,000

Sales Returns 4,000

Sales Allowances 2,000

Required -

1. What is the cost of merchandise destroyed by fire?

2. And the fire loss as far as the Home office is concerned?

Reference no: EM132640580

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