Malakas Inc. operates a branch in Davao. On the home office financial records at the end of 2013, Malakas reports Investment in Davao Branch account with a P167,000 debit balance. The branch operation reports on the same data a Home Office account with a P162,000 credit balance. Which of the following is true? The difference indicates that cash may be in transit from the branch to the home office. Since two different sets of records are being kept, these two accounts are not designed to agree. The difference indicates that the home office might have assigned a P6,000 expense allocation to the branch that was incorrectly recorded by the branch as P11,000. Cash may have been collected by the home office for the branch but not yet reported to the branch The Best Co. bills merchandise shipments in its Cavite City branch at 125% of cost. The branch, in turn, sells the merchandise it receives from the home office at 25% above the billing price. On August 1, 2011, all of the branch's merchandise stock was destroyed by fire. The branch records that were recovered showed the following: Inventory, January 1, 2011(at billed price)................. ..............P 165,000 Shipments received from the home office, January to July (at billed price............... 110,000 Purchases at cost, from outside sources, all re-sold at a 20% mark- up....................7,500 Sales.......... 169,000 Sales returns and allowances... 3,750 The Best Co. will file an insurance claim. How much is the estimated cost of the merchandise destroyed by fire? The Best Co. bills merchandise shipments in its Cavite City branch at 125% of cost. The branch, in turn, sells the merchandise it receives from the home office at 25% above the billing price. On August 1, 2011, all of the branch's merchandise stock was destroyed by fire. The branch records that were recovered showed the following: Invent