1412500 Income Summary 1317000 Merchandise Inventory January 1 115000 Purchases

1412500 income summary 1317000 merchandise inventory

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1,412,500 Income Summary ....................................................................................................... .. 1,317,000 Merchandise Inventory, January 1 ................................................................ 115,000 Purchases ....................................................................................................... .. 820,000 Expenses ........................................................................................................ ... 382,000 Income Summary ....................................................................................................... ... 112,150 Retained Earnings ............................................................................................ 112,150 Problem VIII (1) RUGGLES CO. Income Statement for Branch For Year Ended December 31, 20x4 Sales .............................................................................................................. .................. P 78,500 Cost of goods sold:
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Merchandise inventory, January 1, 20x4 ......................................... P 32,000 Shipments from home office ........................................... P 40,000 Purchases from outsiders ................................................. 20,000 60,000 Merchandise available for sale ....................................................... P 92,000 Less: Merchandise Inventory, December 31, 20x4 ........................ 31,500 Cost of goods sold ............................................................................. 60,500 Gross profit .............................................................................................................. ...... P 18,000 Operating expenses .................................................................................................... 12,500 Net income ........................................................................................................... ........ P 5,500 RUGGLES CO. Income Statement for Home Office For Year Ended December 31, 20x4 Sales .............................................................................................................. ................ P 256,000 Cost of goods sold: Merchandise inventory, January 1, 20x4 ................................... P 80,000 Purchases ...................................................................................... 210,000 Merchandise available for sale ................................................. P 290,000 Less: Shipments to branch .......................................................... 30,000
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Merchandise available for own sales ....................................... P 260,000 Less: Merchandise Inventory, December 31, 20x4 .................. 55,000 Cost of goods sold ............................................................................. 205,000 Gross profit .............................................................................................................. ..... P 51,000 Operating Expenses .................................................................................................... 60,000 Net loss from own operations ..................................................................................... P ( 9,000) Add: Adjusted branch net income ............................................................................. 13,500 Combine net income .................................................................................................... P 4,500 (2) RUGGLES CO. Combined Income Statement for Home Office and Branch For Year Ended December 31, 20x4 Sales .............................................................................................................. ................ P 334,500 Cost of goods sold: Merchandise inventory, January 1, 20x4 ................................... P 107,500 Purchases ...................................................................................... 230,000 Merchandise available for sale .................................................. P 337,500
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Less: Merchandise Inventory, December 31, 20x4 ................... 80,000 Cost of goods sold ............................................................................. 257,500 Gross profit .............................................................................................................. ...... P 77,000 Operating expenses .................................................................................................... 72,500 Net income ........................................................................................................... ........ P 4,500 (3) Merchandise Inventory ......................................................................................... 31,500 Sales .............................................................................................................. ............ 78,500 Income Summary ............................................................................................ 110,000 Income Summary ....................................................................................................... .. 104,500 Merchandise Inventory ................................................................................... 32,000 Shipments from Home Office ......................................................................... 40,000
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Purchases ....................................................................................................... .. 20,000 Expenses ............................................................................................... ............ 12,500 Income Summary ....................................................................................................... .. 5,500 Home Office .................................................................................................... . 5,500 (4) Branch ........................................................................................................... ........... 5,500 Branch Income ................................................................................................ 5,500 Unrealized Intercompany Inventory Profit ............................................................... 8,000 Branch Income .............................................................................................. 8,000 Calculation of unrealized profit adjustment: Branch inventory, January 1, acquired from home office at billed price .................................................................................... P 24,500 Less: Cost of inventory (P24,500/1.225) .................................................... 20,000 Unrealized Intercompany Inventory Profit Jan. 1 ................................... P 4,500 Add: Increase in unrealized profit for shipments made during year, billed price of goods,
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P40,000, cost of goods, P30,000 .................................................... 10,000 P 14,500 Deduct balance to remain in unrealized profit account: Branch inventory, December 31, acquired from home office ....................................... P 26,000 Less: Cost of inventory to home office, P26,000/1.1/3 ................................................................ 19,500 6,500 Reduction in unrealized profit account- adjustment to branch income for overstatement of cost of goods sold ........................... 8,000 Branch Income ........................................................................................................... .. 13,500 Income Summary ............................................................................................ 13,500 Merchandise Inventory ................................................................................................ 55,000 Sales .............................................................................................................. ................. 256,000 Shipments to Branch .................................................................................................... 30,000 Income Summary ............................................................................................. 341,000 Income Summary ....................................................................................................... .. 350,000
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Merchandise Inventory ................................................................................... 80,000 Purchases ....................................................................................................... .. 210,000 Expenses ........................................................................................................ ... 60,000 Income Summary ....................................................................................................... ... 4,500 Retained Earnings ............................................................................................ 4,500 Problem IX 1. Branch Current H. Office Current Unadjusted balance, 12/31/20x4 P 60,000 P 51,500 Add (Deduct): Adjustments 1 Remittance I 1,700) 2. Cash in transit 1,800 3. Shipments in transit 5,800 Adjusted balance, 12/31/20x4 P 57,300 P 57,300 2. Income Statement - Branch Sales .............................................................................................................. .................. P 140,000 Cost of goods sold:
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Merchandise inventory, January 1, 20x4 (P11,550 – P1,000) ....... P 10,550 Shipments from home office (P105,000 + P5,000 – P10,000) ........ 100,000 Freight-in (P5,500 + P250) …………………………………………….. 5,750 Merchandise available for sale ..................................................... P116,300 Less: Merchandise Inventory, December 31, 20x4 ......................
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