CHPATER 13 SOLMAN - 13-6 a Shipment to branch at cost Shipping cost Billed price Sold(50 Inventory at billed price 13-7 P312,500 2,000 P314,500 157,250

CHPATER 13 SOLMAN - 13-6 a Shipment to branch at cost...

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13-6: a Shipment to branch, at cost P312,500 Shipping cost 2,000 Billed price P314,500 Sold (50%) 157,250 Inventory, at billed price P157,250 13-7: c Home office account balance after closing branch profit P765,000 Less: branch profit 130,000 Investment in branch account balance before closing branch profit P635,000 13-8: d Branch ending inventory, at billed price P 50,000 Acquired from home office, at billed price: Cost (P6,000 / 20%) P30,000 Mark-up 6,000 36,000 Purchased from outsiders P 14,000 13-9: b Cost of goods sold – Home office P590,000 Cost of goods sold – Branch: Billed price P300,000 Less: overvaluation (P110,000 – P90,000) 20,000 280,000 Combined cost of goods sold P870,000 13-10: c 13-11: d Overvaluation of branch ending inventory acquired from HO: Billed price P 28,600 Cost (P28,600 / 130%) 22,000 Adjusted balance of allowance for overvaluation account P 6,600 13-12: b Shipment from home office P 90,000 Expenses 17,000 Cash remittance to home office (70,000 ) Home Office account balance before closing P 37.000 13-13: b 17
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Shipment to branch, at cost P 72,000 Ending inventory, at cost (P70,000 / 30%) ( 21,600 ) Cost of goods sold P 50,400 Freight (P6,000 x P50,400/P72,000) 4,200 Total P 54,600 13-14: b (20% of P30,000) 13-15: b (P151,200 / 140%) 13-16: c Sales P270,000 Cost of goods sold Shipments from home office (P151,200/140%) P108,000 Inventory, 1/1 (P28,350 / 140%) 20,250 Inventory, 12/31 (P25,200 / 140%) ( 18,000) 110,250 Gross profit P159,750 Expenses 90,000 Branch profit as far as the home office is concerned P 69,750 13-17: c Unsold merchandise P 60,000 Less: Merchandise acquired from home office, at billed price 45,000 Merchandise acquired from outsiders P 15,000 Merchandise acquired from home, at cost (P7,500 / 20%) 37,500 Branch inventory at cost, 12/31 P 52,500 13-18: a Branch inventory, 1/1 P 54,600 Acquired from home office – at billed price: Overvaluation [P99,900 – (P390,000 – P300,000)] P 9,900 Cost (P9,900 / 30%) 33,000 42,900 Purchases from outsiders P 11,700 13-19: c Acquired from home office [(P60,000 x 80%) ÷ 120%] P 40,000 Acquired from outsiders (P60,000 x 20%) 12,000 Branch inventory, 12/31 – at cost P 52,000 13-20: b Sales (P148,000 + P144,000) P192,000 Cost of sales – at cost to home office: Shipment from home office (P108,000 / 120%) P90,000 Purchases 52,000 18
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Inventory, 12/31 (no. 19 above) (52,000) 90,000 Gross profit P102,000 Expenses (P76,000 + P24,000) 100,000 Branch net income (actual) P 2,000 13-21: b Allowance for overvaluation account balance P 57,500 Overvaluation on the shipment (P200,000 x 25%) 50,000 Overvaluation on the branch beginning inventory P 7,500 Cost of branch beginning inventory (P7,500 / 25%) 30,000 Branch beginning inventory – at billed price P 37,500 13-22: b Sales P400,000 Cost of goods sold – cost to home office Beginning inventory P 30,000 Shipment from home office 200,000 Ending inventory (P40,000 / 125%) ( 32,000) 198,000 Gross profit P202,000 Expenses 100,000 Branch net income as far as the home office is concerned
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