Sulu, Inc. established a branch in Jolo to distribute part of the goods purchased by the home office. The home office prices inventory shipped to the branch at 20% above cost. The following account balances were taken from the ledger maintained by the home office and the branch respectively: Sales P 600,000 and P 210,000; Beginning inventory 120,000 and 60,000; Purchases 500,000 and zero; Shipment to branch 130,000 and zero; Shipment from home office zero and 156,000; Operating expenses 72,000 and 36,000; Ending inventory 98,000 and 48,000. All of the branch inventory is acquired from the home office. On the basis of these account balances, the combined net income of the home office and the branch is:

170,000

70,000

278,000

132,000

Answer rating: 100% (QA)

The combined net income of the home office and the branch is 132000 Heres how we can calculate it Ho... View the full answer