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PROBLEM U: The following information came from the books and records of the Home Office and its branch. The balances as of December 31, 2020
PROBLEM U: The following information came from the books and records of the Home Office and its branch. The balances as of December 31, 2020 are as follows: Home office Branch Sales 300,000 170,000 Shipments to branch 48,000 Shipments from home office 60,000 Purchases 120,000 36,000 Operating expenses 80,000 42.000 Inventory, December 31, 2019 50,000 32.000 Allowance for overvaluation of branch inventory 17,200 There were no shipment in transit between the Home office and the branch. Both shipment accounts are properly recorded. The closing inventory of the branch at billed price is P16,800, P6,000 of which were acquired from outside suppliers. The closing inventory of the home office is P18,000. The home office applies a uniform percentage markup on the shipments of inventory to the branch from year to year. 25. How much is the overvaluation in branch's ending inventory as of December 31, 2020? A. 0 C. 15.040 B. 2,160 D. 17,200 26. How much is the net income (loss) of the branch for 2020 in so far as the home office is concerned? A. 21,200 C. 31.840 B. (21,200) D. (31.840)
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