Problem 3 Trial balances form the home office and the branch of the DEF Company show the following items, before adjustment on December 31 . The Home Office policy for shipments of merchandise to branch is 20% above cost. 7. Determine what part of the branch inventory as of December 1 represented purchases from outsiders and what part represented goods acquired from the home office. 8. Assuming the branch inventory is P100,000, composed of merchandise from home office at billed price, P84,000, and merchandise from outsiders at cost, P16,000. Give the entry necessary on the home office book to adjust the unrealized profit account at the end of the fiscal period