For number 2 and number 3:

Summary adjusted trial balance for the home office and branch of TJ Corporation at December 31, 2010 are as follows:

Home office

Branch

Debits:

Other assets

P 530,000

P 165,000

Inventories, January 1, 2010

50,000

45,000

Branch

200,000

-

Purchases

500,000

-

Shipments from home office

-

240,000

Expenses

120,000

50,000

Dividends

100,000

-

Total debits

P1,500,000

P 500,000

Credits:

Other liabilities

P90,000

P25,000

Capital stock

500,000

-

Retained earnings

100,000

-

Home office

-

175,000

Unrealized profit in branch inventory / loading

10,000

-

Sales

537,500

300,000

Shipments to branch

200,000

-

Branch profit

62,500

_______

Total credits

P1,500,000

P 500,000

Additional information:

2.The home office ships merchandise to its branch at 120% of home office cost.

3.Inventories at December 31, 2010 are P70,000 for the home office and P60,000 for the branch.The branch inventory is at transfer prices.

The combined net income of the home office and the branch amounted to:

A.

P370,000

C.

P132,500

B.

P 200,000

D.

P170,000