Reference no: EM132740347
Question - On August 1, 2020, ANIMAL CO. a home office established two branches: DOG branch and CAT branch.
ANIMAL CO transferred 280,000 worth of cash and 1,225,000 worth of merchandise to its DOG branch.
On August 15, the head office instructed DOG to transfer three-fourths (¾) of the merchandise and cash received to CAT branch.
In addition, on October 6, 2020, shipments from the main office received by DOG branch amounting to 437,500 and freight, collect amounting to 22,750.
Three-fifths (3/5) of the said shipments were sold by DOG branch to customers.
On November 9, 2020, upon instruction of the home office, DOG branch transferred to CAT branch half of the remaining immediate prior month shipments from ANIMAL.
The receiving branch paid additional freight in the amount of 8,750. Had the merchandise been shipped from ANIMAL directly to CAT, only 6,650 worth of freight would have been incurred.
Required - Determine the balance of the Investment in CAT branch account in the separate books of the home office.
a) 1,224,650
b) 1,222,900
c) 1,214,150
d) 1,212,050