16. ABC transferred merchandise inventory from its home office to its branch and the average gross margin on the transfer is 40%. At the beginning of the year, the branch held merchandise purchased from the home office in the amount of P35,000. During the year, the home office made three shipments of inventory to the branch at the transfer price of P30,000, P64,000 and P50,000. At the end of the year, the branch had on hand inventory purchased from the home office of P40,000. What entry should the home office record on the realized intercompany profit during the year? 51,143 a. Allowance for overvaluation of inventory Branch income summary 51,143 55,600 b. Allowance for overvaluation of inventory Branch income summary 55,600 39,714 c. Allowance for overvaluation of inventory Branch income summary 39,714 11,428 d. Allowance for overvaluation of inventory Branch income summary 11,428

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