SAND BOX Corporation has two branches, Do San and Dal Mi, to which merchandise is billed at 20% above cost. Partial trial balance accounts of the three entities at December 31, 2018 are summarized as follows:

Home Office

Do San Branch

Dal Mi Branch

Inventory

800,000

180,000

240,000

Do San branch

450,000

Dal Mi branch

420,000

Shipments from home office

600,000

360,000

Purchases

1,600,000

Expenses

900,000

250,000

200,000

Home Office

450,000

300,000

Loading- Do San branch

130,000

Loading- Dal Mi branch

120,000

Sales

1,950,000

900,000

750,000

Shipments to Do San branch

500,000

Shipments to Dal Mi branch

400,000

Additional information:

Physical inventories on hand at December 31, 2018 were as follows:

Home officeP700,000 at cost

Do San branch210,000 at billed prices

Dal Mi branch150,000 at billed prices

1. The ending inventory of SAND BOX Corporation must be:

A. P1,100,000

B. P 1,000,000

C. P 1,150,000

D. P 1,220,000

2. The combined net income of home office and branches for 2018 must be:

A. P 250,000

B. P 430,000

C. P 350,000