Reference no: EM132671422

Philippine Overseas Corporation has operated a branch in Jordan for one year. Shipments are billed to the branch at cost. The branch carries its own accounts receivable, makes its own collections, and pays its own expenses. The transactions for the year are given effect to in the trial balance below:

Accounts                                                    Debit                 Credit
Cash                                                   P4,200
Home Office Current                                                  P17,500
Shipments from Home Office                 67,680
Accounts receivable                           12,800
Expenses                                              6,820
Sales                                                                            74,000
Totals                                                 P91,500               P91,500

The branch reported an inventory on December 31, 20x5 of P9,180

Problem 1. The net profit of the Jordan Branch for 20x5 was

a. P8,680

b. P9,180

c. P67,180

d. Some other answer

Problem 2. On January 1, 20x6, the Branch current account in the Home Office books should have a balance of

a. P26,180

b. P26,680

c. P67,680

d. Some other answer

Problem 3. On January 1, 20x6, the Shipments to Branch account in the Home Office books should have an opening balance of

a. Zero

b. P17,500

c. P26,180

d. Some other answer