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Additional information:
Home office and Branch inventory at December 31, 2014 were:
Home office (at cost) P120,000
Branch No. 1 (at billed price) 72,000
Branch No. 2 (at billed price) 96,000
4. How much is the correct net income of Branch No. 2 as far as home office is concerned?
a. P190,000 b. P158,000 c. P185,000 d. P94,000
5. How much net income will the home office report in its separate income statement?
a. P220,000 b. P595,000 c. P494,000 d. P100,000
6. What will be the combined cost of sales of Dagupan branch and Andy’s home office that
must be shown in the combined income statement?
a. P22,430 b. P155,815 c. P155,870 d. P22,040
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7. What will be the combined net income of Dagupan branch and Andy’s home office?
a. P22,430 b. P22,600 c. P22,133 d. P22,040
10. What was the amount of allowance for overvaluation before adjustment?
a. P61,875 b. P78,125 c. P20,312 d. P20,000
11. The following data pertains to the shipments of merchandise from Home Office to
Branch during 2013:
In the combined statement of comprehensive income of the Home Office and the Branch
for the year ended December 31, 2013, what amount of the above transactions should be
included as sales?
a. P570,000 b. P520,000 c. P470,000 d. P350,000
12. The Bicol Corporation operates a branch in Naga City. The information from the
December 31, 2011 trial balance are as follows:
Compute the realized inventory profit of home office from sales made by the branch
(the overvaluation of cost of goods sold)?
a. P56,000 b. P120,400 c. P64,400 d. P80,000
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