Reference no: EM132864936

Question - The following is the income statement of a branch for the six-month period ending June 30, 2020:

Sales P620,000

Cost of sales: 515,000

Shipments from H.O.P 550,000

Purchases 50,000

Total 600,000

Ending inventory from H.O 75,000 85,000

Ending inventory from outsider 10,000

Gross profit 105,000

Expenses 85,000

Net income P20,000

The home office ships merchandise to and bills, the Branch office at 125% of cost.

The rent of the branch office for six months, at a monthly rate of P1,000 was paid by the home office.

Required -

1. How much is the Home office net income from its branch office for the six months ending June 30, 2020?

2. Inventory of the Branch office at cost as of June 30, 2020 is?