ABC Co. operates a branch in Davao. There are shipments in transit from home office to the branch. The home office ships merchandise to the branch at 125% of cost in year 2021. Profit and loss data for the home office and branch for 2021 follows:

Home Office Branch
Sales 250,000 75,000
Purchase from outsiders 200,000 15,000
Shipments to branch/from home office:
Cost to Home Office 30,000
Billing price to branch 32,500
Expenses 40,000 10,000
Inventories, Jan. 1, 2021:
Home Office, acquired from outsiders, 80,000

at cost
Branch: Acquired from outsiders at cost 7,500
Acquired from home office at billing price
which averaged 20% above cost 24,000
Inventories, Dec. 31, 2021:
Home Office, acquired from outsiders
at cost 55,000
Branch: Acquired from outsiders at cost 5,500
Acquired from Home Office, in 2021,
at the billed price (physical count) 21,000

11. How much is the amount of merchandise in transit at billed price?
a. 3,000 c. 5,000
b. 3,500 d. 5,500

12. How much is the combined cost of goods sold?
a. 241,200 c. 242,400
b. 240,000 d. 245,200