Reference no: EM133017462

Questions -

Q1. On January 1, 2015, the branch held 21,000 of inventory purchased from Home Office. The inventory had cost the home office 13,500, and freight charges of 2,250 were paid by the home office to deliver merchandise to branch. During the year, the home office purchased 300,000 of inventory and sold 120,000 of it to branch for 150,000; freight charges paid by the home office for delivery were 7,200. On December 31, 2015, the branch continued to hold 45,000 of the units purchased from home office during 2019. The branch total sales were 177,000. What is the correct gross profit of the branch?

a. 70,050

b. 72,210

c. 79,500

d. 41,550

Q2. A Company bills its C Branch for shipments of goods at 25% above its cost. At the close of business on October 31, 2015, a fire gutted the branch warehouse and destroyed 60% of the merchandise stock stored therein. The following data were gathered:

Jan. 1, inventory at billed price 50,000

Shipments from HO to Oct. 31 130,000

Net sales to Oct. 31 225,000

If undamaged merchandise recovered are marked to sell for 30,000, the estimated cost of the merchandise destroyed by fire was?

a. 14,400

b. 21,600

c. 24,000

d. 27,500