Reference no: EM132864705

Question - During 2021, Claneverium Corporation transferred inventory from its home office to its Laguna branch at a billed price of P110,000. The inventory originally cost the company P90,000. The home office reported sales and cost of goods sold of P1,400,000 and P590,000, respectively. The Laguna branch reported sales and cost of goods sold of P675,000 and P300,000, respectively. All of the inventory had been sold by year-end. What is the cost of goods sold to be reported in the 2021 combined statement of comprehensive income?

The home office ships merchandise to the branch at 50 percent above cost. On its books the branch shows a beginning inventory of home office merchandise amounting to 15,000 and shipments from home office of 110,000. Its ending inventory of home office merchandise is 5,000. What amount should the home office adjust the allowance for overvaluation of branch inventory account.