Reference no: EM133080440
Question - On December 31, the end of monthly period, the following account balances of ORANGE INC. branch 1 were given
a. Cash P2,510; Merchandise Inventory P16,000 ( P3,500 from outside purchases) ; Store supplies P400 ; Store furniture P8,000; Purchases 5,000 ; Selling expenses P4,250; General Expenses P1,840
b. allowance for depreciation Store furniture P320; Accounts payable 3,500; Notes payable P1,000; Home office P23,180 ; Sales P20,500 ; shipment from home office P10,500The following add'l data were given on Dec 31
> store supplies P140>Depreciation of store furniture 12% a year
> Accrued Selling expenses P120>Prepaid selling expenses P150
> Merchandise Inventory end P16,950 (2,750 from outside purchases)The home office bills the branch for merchandise at 33 1/3% above cost
The home office notified the branch in Dec., 31 that it had paid off the branch note for P1,000
How much is the true net income of the branch as per home office record?