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:

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.

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

Answer rating: 100% (QA)

Computation of realized gross profit Billed during the month 30000 Closing stock on December 31 1950... View the full answer