Reference no: EM132903215

The Home Office in Global City bills its QC branch for shipments of goods at 25% above cost. At the close of the business on April 27, 2016, a fire gutted the branch warehouse and destroyed 70% of the merchandise stock stored therein. Thereafter, the following data were gathered:

January 1 Inventory P 672,000

Shipments from Home office, Jan. 1 through April 27 1,008,000

Net Sales, January 1 through April 27 1,428,000

Undamaged merchandise recovered are marked to sell for 378,000

Problem 1: What is the amount of inventory destroyed by fire per home office records at cost?

Problem 2: How much is the branch cost of goods sold?

Problem 3: How much is the overvaluation in branch Cost of Goods Sold?

Problem 4: How much is the branch net income as provided by GAAP?