The home office ships merchandise to the branch at 25 percent above cost. At whatamount should the Home Office account be credited if merchandise costing P120,000will be shipped?On January 01, 2020 Kit Company, Inc. establishes a branch in Bauang. During theyear, Kit Inc. transfers cash and merchandise to the branch worth P15,000 andP45,000 respectively. Freight was paid by the home office worth P1,500 included inthe cost of merchandise. The home office also incurred P5,700 expenses of which 30percent was allocated to the branch. On December 31, 2020, the branch incurred aloss of P4,000. What is the balance of the branch account as per home office books?*Please answer in good Accounting form. Thank you!

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Principles of Accounting Volume 1

19th Edition

ISBN:9781947172685

Author:OpenStax

Publisher:OpenStax

Chapter12: Current Liabilities

Section: Chapter Questions

Problem 5EB: Review the following transactions and prepare any necessary journal entries for Lands Inc. A. On...

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The home office ships merchandise to the branch at 25 percent above cost. At what
amount should the Home Office account be credited if merchandise costing P120,000
will be shipped?
On January 01, 2020 Kit Company, Inc. establishes a branch in Bauang. During the
year, Kit Inc. transfers cash and merchandise to the branch worth P15,000 and
P45,000 respectively. Freight was paid by the home office worth P1,500 included in
the cost of merchandise. The home office also incurred P5,700 expenses of which 30
percent was allocated to the branch. On December 31, 2020, the branch incurred a
loss of P4,000. What is the balance of the branch account as per home office books?

*Please answer in good Accounting form. Thank you!

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