How much is the true profit of the branch

Assignment Help Accounting Basics

Reference no: EM132824318

Problem - 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 the home office:

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

Required -

Q1. How much is the sales of branch to be included in the combined financial statements?

2,800,000

2,333,333

2,240,000

Q2. How much is the cost of goods sold of the branch to be included in the combined financial statements?

1,500,000

1,800,000

1,200,000

900,000

Q3. How much is the ending inventory of the branch to be included in the combined financial statements?

800,000

8333,333

1,250,000

1,000,000

Q4. How much is the true profit (NET INCOME) of the branch?

1,250,000

1,200,000

1,266,667

1,400,000

Q5. How much is the adjusted balance of the branch current account immediately prior to combining the financial statements?

3,800,000

3,500,000

3,400,000

3,666,667

Reference no: EM132824318

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