Determine combined net income (loss) of the home office and the branch for the year 2021 Home OfficeBranchP 256,000P 78,50020,000SalesPurchases from outsiders210,000Shipments to branch:Cost to home office30,00040,00012,500Billing price to branchExpensesInventories, January 1, 2008:Home office acquired from outsiders, at cost60,00080,000Branch:Acquired from outsiders, at costAcquired from home office, at billed price(which averaged 22 % above cost)Inventories, December 31, 2008:Home Office, acquired from outsiders, at cost7,50024,50055,000Branch:Acquired from outsiders, at costAcquired from home office, at 2008 billedprice5,50026,000

Net Income/(Loss): Home office Branch Sales (A) 256000 78500 Cost: Purchase from…

Home Office P 256,000 210,000 Branch P 78,500 Sales Purchases from outsiders 20,000 Shipments to branch: Cost to home office Billing price to branch Expenses Inventories, January 1, 2008: 30,000 40,000 12,500 60,000 Home office acquired from outsiders, at cost 80,000 Branch: Acquired from outsiders, at cost Acquired from home office, at billed price (which averaged 22 % above cost) 7,500 24,500 Inventories, December 31, 2008: Home Office, acquired from outsiders, at cost 55,000 Branch: Acquired from outsiders, at cost Acquired from home office, at 2008 billed price 5,500 26,000

Home Office P 256,000 210,000 Branch P 78,500 Sales Purchases from outsiders 20,000 Shipments to branch: Cost to home office Billing price to branch Expenses Inventories, January 1, 2008: 30,000 40,000 12,500 60,000 Home office acquired from outsiders, at cost 80,000 Branch: Acquired from outsiders, at cost Acquired from home office, at billed price (which averaged 22 % above cost) 7,500 24,500 Inventories, December 31, 2008: Home Office, acquired from outsiders, at cost 55,000 Branch: Acquired from outsiders, at cost Acquired from home office, at 2008 billed price 5,500 26,000

Financial Reporting, Financial Statement Analysis and Valuation

8th Edition

ISBN:9781285190907

Author:James M. Wahlen, Stephen P. Baginski, Mark Bradshaw

Publisher:James M. Wahlen, Stephen P. Baginski, Mark Bradshaw

Chapter2: Asset And Liability Valuation And Income Recognition

Section: Chapter Questions

Problem 5QE

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