Problem IV Victor Company operates a branch in Cebu. Selected accounts were taken from December 31 books of the current year. Financial statements of Victor and its branch are as follows: Home Office Branch Sales 6,900,000 3,765,000 Shipment to Branch 1,750,000 Shipment from Home Office 2,187,500 Inventory, Jan. 1 800,000 120,000 Inventory, Jan. 31 640,000 250,000 Purchases 6,800,000 1,000,000 Allo. for overvaluation of inventory 452,500 Expenses 356,000 250,000 1. The net income reported by the branch 2. Overstatement of branch cost of sales as far as home office is concerned