Академический Документы
Профессиональный Документы
Культура Документы
P 31,000
6,600
P 37,600
P
5,000
Add (deduct):
Overvaluation of cost of goods sold/realized profit
from sales made by branch:
Shipments from home office.
P
280,000
Less: Ending inventory, at billed
price (P50,000 P6,600)
43,400
Cost of goods sold from home
office at billed price
P
236,600
Multiplied by: Mark-up
40/140
Unrecorded branch expenses
True Branch Net Income
67,600
( 2,500)
P 70,100
4. c
True Branch Net Income
Less: branch Net Income as reported by the branch
Overvaluation of CGS
Less: Cost of goods sold from home office at BP
Inventory, December 1
Shipment from HO
COGAS
Less: Inventory, December 31
CGS from home office, at cost
P156,000
60,000
P 96,000
P 70,000
350,000
P 420,000
84,000
336,000
P 240,000
P 20,000
6,000
P 14,000
Billed Price
0
SFHO
COGAS
Less: MI, ending
CGS, at BP
X: Mark-up ratio
True/Adjusted/Real Branch Net Income
7. d
550,000
550,000
75,000
475,000
25/125
95,000
P109,000
8. d
Overvaluation of Cost of Goods Sold:
Unrealized Profit in branch inventory/ before adjustment.P 7,200
Less: Allowance of ending branch inventory (P20,000 x 84% =
P16,800 x 20/120.. 2,800
Overvaluation of Cost of Goods Sold. .P 4,400
Adjusted branch net income:
SalesP60,000
Less: Cost of goods sold:
Inventory, January 1, 2003.P 30,000
Add: Purchases..... 11,000
Shipments from home office..
19,200
Cost of Goods available for sale P 60,200
Less: Inventory, December 31, 2003.
20,000
40,200
Gross profit.. P 19,200
Less: Expenses.. 12,000
Unadjusted branch net income.P 7,800
Add: Overvaluation of Cost of Goods Sold.
4,400
Adjusted branch net income..P 12,000
9. d
Merchandise Inventory, 12/31/2005
Shipments
Cost of goods sold
Billed
Price
*P 36,000
28,800
Cost
P 30,000
24,000
Allowance
P 6,000
4,800
P10,800
10. d
Merch. Inventory, 12/31/20x4
Billed Price
*P12,000
Cost
P10,000
Allowance
P 2,000
Shipments
9,600
Cost of Goods Sold
*P2,000 / 20% = P10,000 + P2,000 = P12,000.
8,000
1,600
P 3,600
60%
Cost
40%
Allowance
Merchandise inventory, 1/1/x4
32,000
Shipments
*60,000
36,000
*24,000
Cost of goods available for sale
56,000
Less: MI, 3/31/x4 (25,000 x 40%)
10,000
Overvaluation of CGS**
46,000
*36,000 cost / 60% = 60,000 x 40% = 24,000. (Note: Markup is based on billed price)
**Realized Profit from Branch Sales
13. d
Billed
Price
Merchandise inventory, 8/1/x4
Shipments (400,000 x 25%)
Cost of goods available for sale
Less: MI, 8/31/x4 (160,000 x 25%)
Overvaluation of CGS/RPBSales
400,000
160,000
Cost
Allowance
60,000
*100,,000
160,000
40,000
120,000
14. b
(1) Sales
P 40,000
Less: Cost of goods sold:
Inventory, 1/1/2003 (P4,950 / 110%)
P 4,500
Add: Shipments
(P22,000 / 110%)
20,000
COGAS
P 24,500
Less: Inventory, 12/31/2003 (P6,050 / 110%)
5,500
19,000
Gross profit
P 21,000
Less: Expenses
_
13,100
Net income from own operations
P
7,900
P192,000
P
0
52,000
108,000
P 160,000
60,000
100,000
P 92,000
100,000
P( 8,000)
10,000
P 2,000
18. c
Merchandise inventory, 1/1/x4
Shipments
Cost of goods available for sale
Less: MI, 12/31/x4 (P60,000 x 80%)
Overvaluation
of
CGS(230,000x
25/125)
125%
Billed Price
40,000
250,000
290,000
60,000
230,000
100%
Cost
25%
Allowance
46,000*
19. d P326,000
Sales (P600,000 + P300,000)
Less: Cost of goods sold
Merchandise inventory, beg.
[P100,000 + (P40,000/1.25)]
Add: Purchases
Cost of goods available for sale
Less: MI, ending
[P30,000 + (P60,000/1.25)]
Gross profit
Less: Expenses (P120,000 + P50,000)
Net Income
20. b
Sales (P537,500 + P300,000)
Less: Cost of goods sold
Merchandise inventory, beg.
[P50,000 + (P60,000/1.20)]
Add: Purchases
Cost of goods available for sale
Less: MI, ending
[P70,000 + (P60,000/1.20)]
Gross profit
Less: Expenses (P120,000 + P50,000)
Net Income
P 900,000
P132,000
350,000
P482,000
78,000
404,000
P 496,000
_ 170,000
P 326,000
P 837,500
P 87,500
500,000
P587,500
120,000
467,500
P 370,000
_ 170,000
P 200,000
21. c
Sales (P120,000 + P60,000)
P 180,000
Less: Cost of goods sold:
Merchandise inventory, beg. [P40,000 + P6,000 +
(P24,000 / 1.2)] P 66,000
Add: Purchases (P70,000 + P11,000)
81,000
Cost of Goods Available for SaleP 147,000
Less: MI, ending [P40,000 + P3,200 + (P16,800 / 1.20)] 57,200
89,800
Gross profit
P 90,200
Less: Expenses (P28,000 + P12,000)
40,000
Net Income.
P 50,200
22. d
Sales (P100,000 P33,000 + P50,000)
P 117,000
Less: Cost of goods sold:
Inventory, beg. [P15,000 + (P5,500/110%) or (P5,500 P500)] P20,000
Add: Purchases (P50,000 + P7,000) 57,000
COGAS.. P77,000
Less: Inventory, end [P11,000 + P1,050 +
(P6,000- P1,050)/110%] 16,550
60,450
Gross profit
P 56,550
Less: Expenses (P20,000 + P6,000 + P5,000)
31,000
Combined Net income.
P 25,550
23. c
Sales
Less: Cost of Sales
Inventory, 1/1/10
P155,000
P 23,000
Purchases
Cost of goods available for sale
Less: Shipment/Sales to Branch,
at cost (P110,000/110%)
Cost of goods available for HO
Sale
Less: Inventory, 12/31/10
Gross profit
Less: Expenses
Net income home office
190,000
P213,000
100,000
P113,000
30,000
83,000
P 72,000
52,000
P 20,000
24. a
Sales
P140,000
Less: Cost of Sales
Inventory, 1/1/10
P 11,550
Purchases
105,000
Freight-in
5,500
Shipment in transit (P5,000+P250)
5,250
Cost of goods available for sale P127,300
Less: Inventory, 12/31/10
(P10,400 + P520 + P5,250)
16,170 111,130
Gross profit
P 28,870
Less: Expenses
28,000
Net income per branch books/unadjusted
P
870
Add: Overvaluation of CGS*
9,600
Net Income of Davao Branch, adjusted
P 10,470
BP
Cost
MI. 1/1/2010
Shipments
110,000
Available for sale
-: MI, 12/31/10
***15,400
CGS
**110,000 x 10/110
***10,400 + 5,000, in transit
****15,400 x 10/110
100,000
Allowance
1,000
**10,00
0
11,000
****1,400
9,600
25. a
Inventory, 1/1 at billed price
P165,000
Add: Shipments at billed price
110,000
Cost of goods available for sale at billed price
P275,000
Less: CGS at BP:
Sales
P169,000
Less: Sales returns and allowances
3,750
Sales price of merchandise
acquired from outsiders
(P7,500 / 120%)
9,000
Net Sales of merchandise acquired from
home office
P156,250
x: Intercompany cost ratio
100/125
125,000
Inventory, 8/1/2008 at billed price
P150,000
x: Cost ratio
100/125
Merchandise inventory at cost destroyed by fire
P120,000
26. d
Merchandise inventory, January 1
Shipments from home office
Cost of goods available for sale
Less: Cost of goods sold, at BP:
Sales
Less: Sales returns
Net sales
Divided by: SP based on cost
Merchandise inventory, ending at BP
Divided by: Billed price
Merchandise inventory, ending at cost
lost due to fire)
P 26,400
__20,000
P 46,400
P 15,000
___2,000
P 13,000
____125%
__10,400
P 36,000
____120%
P 30,000
27. d
Freight actually paid by:
Home OfficeP 500
Branch P
700
TotalP 1,200
Less: Freight that should be recorded..
800
Excess freightP 400
28. d in arriving at the cost of merchandise inventory at the end of the period, freight charges
are properly recognized as a part of the cost. But a branch should not be charged with
excessive freight charges when, because of indirect routing, excessive costs are incurred.
Under such circumstances, the branch acquiring the goods should be charged for no more
than the normal freight from the usual shipping point. The office directing the inter-branch
transfers are responsible for the excessive cost should absorb the excess as an expense
because it represents management mistakes (or inefficiencies.)
29. c
Inventory of the Branch:
Shipments from home office at billed price.........................................P 37,700
X: Ending inventory %................................................................................
60%
Ending inventory at billed price.....P 22,620
Add: Freight (P1,300 x 60%)......
780
P 23,400
Or, P39,000 x 60% = P23,400
30. b
60%
31. c
Home Office Books
Davao Branch39,000
Davao Branch
SFHO.37,700
Baguio Branch
STB, cost.
32,500
Unrealized profit
5,200
Cash (freight).
1,300
BC Baguio19,630
Excess freight
520
BC-Davao.
20,150
Freight-in. 1,300
HOC..
39,000
HOC.20,150
SFHO(50%)
18,850
Freight-in (50%)
650
Cash......
650
SFHO18,850
Freight-in..
780
HOC...
19,630
32. d
(1) Branch Inventory, 12/31/20x4: P30,000 x 60%...................................P 18,000
(2) Branch Inventory, at cost: (P25,000 + P1,000) x 60%.........................P 15,600
33. c (P300,000 x = P75,000, ending inventory x (P300,000 P250,000)/P300,000 =
P12,500
34. d
35. d
36. b refer to No. 14
37. b refer to No. 14
38. c refer to No. 14
39. c
40. d