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- The home office of Farah Company, bills its only branch at a markup of 25% above home office cost for all merchandise shipped to
- The home office of Farah Company, bills its only branch at a markup of 25% above home office cost for all merchandise shipped to Habiba branch. During 2019 the home office shipped merchandise to the branch at a billed price of $ 30,000.Habiba branch inventories for 2019 were as follows:
| Jan.1 | Dec .31 |
From home office(at billed price) Purchased from outsiders | 15000 6800 | 19500 8670 |
Required:
- Prepare a working paper to analyze the flow of merchandise to Habiba Branch. Assuming a uniform markup on all shipments to the branch, and compute realized gross profit.
(7 marks)
- Prepare journal entries (including adjusting entries) for the home office of Farah Company for 2019.
(6 marks
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