Reference no: EM132652440

The following transactions relating to branch AA and branch BB are following:

1. On September 30, 2016, branch AA collected branch BB's accounts receivable of P80,000 less 3% discount.
2. On October 31, 2016, home office shipped merchandise costing P400,000 to branch AA. Freight of P6,000 was paid by the home office.
3.  It is the policy of the company to bill its branches at 25% above cost. On November 30, 2016, upon the instruction of the home office,branch AA reshipped a quarter of the above merchandise to branch BB with freight of P3,000 (freight-collect). Had the goods been shipped directly to branch BB, the freight would have been only P1,400.

Problem 1: What is the home office current account of branch AA as of October 31, 2016?

a.483,600

b.577,600

c.583,600

d.983,600

Problem 2: What is the investment in BB account as of November 30, 2016?

a.45,800

b.48,800

c.201,000

d.204,000