Reference no: EM132937074
Question - The TokTik home office ships merchandise to its Makati Branch at 20 percent above cost. Makati branch's book shows a beginning inventory of P135,000 (50% from outside purchase) and shipments from home office of P405,000. The ending inventory of the Makati branch amounted to P337,500 in which 60% is home office merchandise while the remaining balances is from outside purchases. The Makati branch purchased merchandise costing P317,500. The total sales and operating costs of the branch for the year amounted to P1,040,000 and P220,000 respectively.
What is the entry of the home office upon shipment of merchandise to the branch?
a. Branch Current 405,000
Shipment to branch 405,000
b. Investment in branch 405,000
Shipment to branch 337,500
Allowance for overvaluation 67,500
c. Shipments from home office 405,000
Home office current account 405,000
d. None of the above
What is the pre-closing balance of the Allowance for Overvaluation of Branch Inventory Account?
a. P33,750
b. P40,500
c. P78,750
d. P94,500
What is the post-closing balance in the Unrealized Profit in Branch Inventory Account?
a. P33,750
b. P40,500
c. P78,750
d. P94,500
What is the amount of overvaluation of Cost of Goods Sold or undervaluation in income?
a. P33,750
b. P45,000
c. P78,750
d. P94,500
The Allowance For Overvaluation of Branch Inventory Account is adjusted to how much?
a. P33,750
b. P40,500
c. P78,750
d. P94,500
The Allowance For Overvaluation of Branch Inventory Account is adjusted by how much?
a. P33,750
b. P40,500
c. P45,000
d. P94,500
What is the overvaluation of Branch Ending Inventory?
a. P33,750
b. P40,500
c. P78,750
d. P94,500
How much is the true ending inventory of the branch?
a. P280,250
b. P303,750
c. P315,000
d. P337,500
How much is the total Cost of goods sold of the branch?
a. P225,000
b. P270,000
c. P475,000
d. P520,000
How much is the true net income of the branch?
a. P225,000
b. P270,000
c. P300,000
d. P345,000