1. SAND BOX Corporation has two branches, Do San and Dal Mi, to which merchandise is billed at 20% above cost. Partial trial balance accounts of the three entities at December 31, 2018 are summarized as follows: Home OfficeDo San BranchDal Mi Branch Inventory800,000180,000240,000 Do San branch450,000 Dal Mi branch420,000 Shipments from home office600,000360,000 Purchases1,600,000 Expenses900,000250,000200,000 Home Office450,000300,000 Loading- Do San branch130,000 Loading- Dal Mi branch120,000 Sales1,950,000900,000750,000 Shipments to Do San branch500,000 Shipments to Dal Mi branch400,000 Additional information: Physical inventories on hand at December 31, 2018 were as follows: Home officeP700,000 at cost Do San branch210,000 at billed prices Dal Mi branch150,000 at billed prices A) The ending inventory of SAND BOX Corporation must be: a. P1,100,000 b. P 1,000,000 c. P 1,150,000 d. P 1,220,000 B) The combined net income of home office and branches for 2018 must be: a. P 250,000 b. P 430,000 c. P 350,000 d. P 600,000
C) Correct net income of branches for 2018 must be: a. P 350,000 b. P 250,000 c. P 600,000 d. P 430,000 Ho 2. The following information came from the books and records of Mr. Han Corporation and its branch. The balances are as of December 31, 2019, the fourth year of the corporation's existence. Home Office Dr. (Cr.)Branch Dr. (Cr.) Sales(320,000) Shipments to branch(80,000) Shipments from home office120,000 Purchases50,000 Expenses80,000 Inventory, January 1, 201936,000 Unrealized profit in branch inventory(50,000) There are no shipments in transit between the home office and the branch. Both shipments accounts are properly recorded. The closing inventory at billed prices includes merchandise acquired from the home office in the amount of P21,000 and P9,000 acquired from vendors for a total of P30,000.
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