120000 467500 Gross profit P 370000 Less Expenses P120000 P50000 170000 Net

120000 467500 gross profit p 370000 less expenses

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120,000 467,500 Gross profit………………………………………………………………. P 370,000 Less: Expenses (P120,000 + P50,000.. ………………………………. 170,000 Net Income……………………………………………………………… P 200,000 15. d Overvaluation of Cost of Goods Sold: Unrealized Profit in branch inventory/ before adjustment……………….P 7,200 Less: Allowance of ending branch inventory (P20,000 x 84% = P16,800 x 20/120…………………………………………………………. 2,800 Overvaluation of Cost of Goods Sold……………………………………. ….P 4,400
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Adjusted branch net income: Sales…………………………………………………………………… …………………P60,000 Less: Cost of goods sold: Inventory, January 1, 2003……………………………….P 30,000 Add: Purchases………………………………………… ..... 11,000 Shipments from home office…………………….. 19,200 Cost of Goods available for sale……………………… P 60,200 Less: Inventory, December 31, 2003…………………. 20,000 40,200 Gross profit…………………………………………………………………… ……….. P19,200 Less: Expenses……………………………………………………………… ………….. 12,000 Unadjusted branch net income…………………………………………………...P 7,800 Add: Overvaluation of Cost of Goods Sold……………………………………. 4,400 Adjusted branch net income……………………………………………………...P 12,000 16. d Billed Price Cost Allowanc e Merchandise Inventory, 12/31/2005 *P 36,000 P 30,000 P 6,000
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Shipments 28,800 24,000 4,800 Cost of goods sold P10,800 From Home at billed price: *P6,000 / 20% = P30,000 + P6,000 = P36,000. From outsiders: P45,000 – P36,000 = P9,000 17. d Billed Price Cost Allowa nce Merch. Inventory, 12/31/20x4 *P12,000 P10,00 0 P 2,000 Shipments 9,600 8,000 1,600 Cost of Goods Sold P 3,600 *P2,000 / 20% = P10,000 + P2,000 = P12,000. Merchandise inventory, December 1, 20x4…………………………………P 15,000 Less: Shipments from home office at billed price*………………………… 12,000 Merchandise from outsiders……………………………………………………P 3,000 18. d Combined Cost of Goods Sold: Merchandise Inventory, 1/1/2003: Home Office, cost……………………………………………… P 3,500 Branch: Outsiders, …………………………… ........................... P 300 From Home Office (P2,500 – P300)/110% ................. 2,000 2,300 P 5,800 Add Purchases (P240,000 + P11,000)…………………………….. 251,000 COGAS………………………………………………………………… P256,800
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Less: Merchandise Inventory, 12/31/2003 Home Office, cost………………………………………………. P 3,000 Branch: Outsiders………………………………………………. P 150 From Home Office (P1,800 – P150)/110% ................ 1,500 1,650 4,650 Cost of Goods Sold………………………………………………… P252,150 19. d 100% 60% 40% Billed Price Cost Allowa nce Merchandise inventory, 1/1/x4 32,000 Shipments *60,000 36,000 *24,000 Cost of goods available for sale 56,000 Less: MI, 3/31/x4 (25,000 x 40%) 10,000 Overvaluation of CGS** 46,000 *36,000 cost / 60% = 60,000 x 40% = 24,000. (Note: Markup is based on billed price) **Realized Profit from Branch Sales 20. d Billed Price Cost Allowa nce
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