Reference no: EM133152082

Question - The home office of Glendale Company, which uses the perpetual inventory system bills shipments of merchandise to the Montrose Branch at a markup of 25% on the billed price. On August 31, 2017, the credit balance of the home office's Allowance for Overvaluation of Inventories - Montrose Branch ledger account was P60,000. On September 17, 2017, the home office shipped merchandise to the branch at a billed price of P400,000. The branch reported an ending inventory, at billed price, of P160,000 on September 30, 2017. Compute the realized gross profit/allowance for overvaluation.