From Home office:

Beginning inventory - P250,000

Ending inventory - P300,000

From Outside:

Beginning inventory - P50,000

Ending inventory - P75,000

The Home office ascertained that the true net income of the branch was P1,075,000

What is the mark-up on cost for the inventory shipments from Home office to branch?

118%

22.5%

18%

122.5%

Using the information in the previous question, the branch ending inventory reported at cost on December 31, 2018 is:

P254,000

P319,900

P204,000

P244,900

Transcribed Image Text:

The income statement submitted by the branch to the home office for the year ended December 31, 2019 follows: Sales P4,200,000 Less: Cost of goods sold Beginning inventory P300,000 Shipments from HO 2,500,000 Purchases 500,000 Ending inventory (375,000) 2,925,000 Gross profit 1,275,000 Operating expenses 650,000 Net income P625,000 The branch inventories consisted of the following: The income statement submitted by the branch to the home office for the year ended December 31, 2019 follows: Sales P4,200,000 Less: Cost of goods sold Beginning inventory P300,000 Shipments from HO 2,500,000 Purchases 500,000 Ending inventory (375,000) 2,925,000 Gross profit 1,275,000 Operating expenses 650,000 Net income P625,000 The branch inventories consisted of the following:

Answer rating: 100% (QA)

Ans Mark up in cost is 22 True income of the branch 1075000 Present incom... View the full answer