- 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:

1. 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)

2. Prepare journal entries (including adjusting entries) for the home office of Farah Company for 2019.

(6 marks