The following is the income statement of XYZ branch in Cebu city for the six-month period ending June 30, 2018: Sales P620,000 Cost of sales: Shipments from H.O. P550,000 Purchases 50,000 Total 600,000 75,000 515,000 85,000 Ending inventory from H.O Ending inventory from outsider Gross profit Expenses Net income 10,000 105,000 85,000 P20,000 The home office ships merchandise to and bills, the Branch office at 125% of cost. The rent of the branch office for six months, at a monthly rate of P1,000 was paid by the home office. How much is the Home office net income from its branch office for the six months ending June 30, 2018.? O [Test choice) Do not select this option. Correct answer will be given on the time of discussion O P125,000 O P124,000 P139,000 OP109,000 Question 3 10 pts Using the information in the previous question, inventory of the Branch office at cost as of June 30, 2018 is? O [Test choice) Do not select this option Correct answer will be given on the time of discussion O P85,000 O P70,000 O P60,000 P75,000 The income statement submitted by a branch to home office for the month of December, 2018 is shown below. After effecting the necessary adjustments the true net income of the branch was ascertained to be P156,000. Sales P600,000 Cost of sales: Inventory, beginning (12/01/18) P80,000 Shipments from Home office 350,000 Local purchases 30,000 Total available for sale 460,000 Ending inventory (12/31/18) 100,000 360,000 Gross profit 240,000 Expenses 180,000 Net income P60,000 The branch inventories were: Description 12/01/18 12/31/18 P70,000 P84,000 Merchandise from Home office Local purchases Total 10,000 16,000 100,000 80,000 The billing price based on cost imposed by the home office to the branch is? O [Test choice) Do not select this option. Correct answer will be given on the time of discussion O 140% O 100% 129% O 130% Question 5 10 pts Using the information in the previous question, how much would be the balance of allowance for overvaluation of branch December 31, 2018 after adjustment? O [Test choice) Do not select this option. Correct answer will be given on the time of discussion P10,000 OP24,000 O P16,000 O P18,000 Question 6 10 pts Trial balances for the home office and the branch of a Company show the following accounts on December 31, 2018. The home office policy of billing the branch for merchandise is 20% above cost. Description Home office Branch Allowance for overvaluation of Inv. P10,800 Shipments to branch 24,000 Purchases (outsiders) P7,500 Shipments from Home office 28,800 Merchandise inventory, 12/31/17 45,000 What part of the branch inventory as of 12/31/17, represent purchases from outsiders and what part represents goods acquired from the home office? (Test choice) Do not select this option. Correct answer will be given on the time of discussion O Outsiders, P12,000 : Home office, P33,000 Outsiders, P16,500 : Home office, P28,500 O Outsiders, P15,000 : Home office, P30,000 Outsiders, P9,000 : Home office, P36,000 The branch submitted the following trial balance as of June 30, 2018: Description Debit Credit Cash P28,600 173,800 Accounts receivable Shipments from Home office 462,000 Home office account P324,500 Sales 369,600 Expenses 29,700 P694,100 Total P694,100 The branch reported an ending inventory of P138,600. Shipments are billed at a mark-up of 40% on cost. What is the real net income of the branch? [Test choice) Do not select this option. Correct answer will be given on the time of discussion P92,400 P138,600 P70,600 P108,900 Question 8 10 pts A Corporation, operates a number of branches in Metro Manila. On June 30, 2018, its branch showed a Home office account balance of P27,350 and the Home office books showed a Branch account balance of P25,550. The following information may help in reconciling both accounts: 1. A P12,000 shipment, charged by Home office to branch was actually sent to and retained by another branch. 2. A P15,000 shipment, intended and charged to another branch was shipped to this branch and retained by the latter. 3. A P2,000 cash transfer from another branch was not taken up in the Home office books. 4. Home office collects a branch's accounts receivable of P3,600 and fails to notify the branch. 5. Home office charged for P1,200 for merchandise returned by the branch on June 28. The merchandise is in transit. Home office erroneously recorded branch's net income for May, 2018 at P16,275. The branch reported a net income of P12,675. What is the reconciled amount of the home office and branch reciprocal accounts? O [Test choice] Do not select this option. Correct answer will be given on the time of discussion O P21,750 OP23,750 O P27,350 O P20,150 Question 9 10 pts On August 31, 2018, a fire destroyed totally the rented "bodega" or stockroom of the Company. The following are some of the data of the company: P110,000 Merchandise inventory, December 31, 2017 For the period Jan.1 to Aug. 31, 2018: Purchases Freight-in Purchase returns Sales 560,500 5,600 10,200 695,000 [Test choice] Do not select this option. Correct answer will be given on the time of discussion OP90,700 O P115,900 OP88,400 OP63,200