Reference no: EM132789682

The following information was taken from the records of a branch:

Sales by branch	2,800,000
Beginning inventory
Billings to branch by home office	2,500,000
Operating expenses	400,000
Ending inventory at billed price	1,000,000

The following information was taken from the records of a branch:

Branch current account	2,600,000
Shipments to branch	2,000,000
Allowance for markup - Unadjusted	500,000

Problem 1. How much is the sales of branch to be included in the combined financial statements?

a. 2,333,333

b. 0

c. 2,240,000

d. 2,800,000

Problem 2. How much is the cost of goods sold of the branch to be included in the combined financial statements?

a. 900,000

b. 1,500,000

c. 1,200,000

d. 1,800,000

Problem 3. How much is the ending inventory of the branch to be included in the combined financial statements?

a. 1,000,000

b. 8333,333

c. 1,250,000

d. 800,000

Problem 4. How much is the true profit of the branch?

a. 1,400,000

b. 1,200,000

c. 1,250,000

d. 1,266,667

Problem 5. How much is the adjusted balance of the branch current account immediately prior to combining the financial statements?

a. 3,800,000

b. 3,400,000

c. 3,666,667

d. 3,500,000