Questions 12 and 13 are based on the following information. Kulas Corporation has one branch operation located 500 miles away from the home office. The branch office sales merchandise which is shipped to it from the home office. The merchandise is transferred at cost but the branch pays reasonable freight charges. The branch office makes sales and incurs and pays operating expenses. At the end of the current accounting period the true adjusted balance for the home office account on the branch's books and the branch office account on the home office's books is P500,000. The following items may or may not be reconciling items. The current year is 2012. 1) The home office has shipped merchandise to the branch office which cost P10,000 and which incurs P500 freight charges paid by the home office but charged to the branch. This merchandise is received by the branch on January 5,2012. 2) The branch has transmitted P17,000 in cash back to the home office as a partial payment on such purchased merchandise. This cash is received by the home office on January 6,2012. 3) The branch office returns some defective merchandise to the home office. The cost of the returned merchandise is P750. The branch office pays P25 of freight costs which will be charged back to the home office. 4) On December 1, 2012, the home office sends a check for P25,000 to replenish the branch's charged back to the home office. 5) The branch pays an advertising expense of P800 that should have been paid by the home office since it applied to advertising fees incurred by the home office of its own benefit. 6) The home office allocated P12,000 of general and administrative expenses to the branch. The branch had not entered the allocation as of the end of the year. 7) The home office pays insurance premiums on the branch store. The amount paid by the home office is P1,000 but the branch erroneously records it as P776.00 12. What is the unadjusted balance of the Home Office account? a. P481,425 c. P500,000 b. 452,276 d. 518,575 13. What is the unadjusted balance of the Branch account? a. P433,701 c. P518,575 b. 500,000 d. 452,276