A Manila Company maintains several branches that market the products that it produces. Merchandise is billed to the branches at cost, the branches paying freight charges from the home office to the branch. On November 15, 2013, Branch No. 1 ships parts of its stock to Branch No. 3 upon authorization of the home office. Originally, Branch No. 1 had been billed for this merchandise at P16,000 and had paid freight charges on the shipment from the home office of 3,500. Branch No. 3 upon receiving the merchandise, pays freight charges on the shipment from Branch No. 1 of P2,500. If the shipment had been made from the home office directly to Branch No. 3, the freight cost to Branch No. 3 would have been P4,000. 

What is the entry of the home office to record the excess freight due to inter-branch transfer?

Answer rating: 100% (QA)

The home office needs to record the excess freight due to interbranch transfer with the following en... View the full answer