Pepper Company acquired 80% of the voting stock of Salt Company on January 1, 20x1, when Salt Company's retained earnings amounted to 130,000. The difference between the implied and book value and fair values of the non-cash assets on the date of acquisition was allocated as follows: „P 50, 000 20, 000 .40, 000 Land.. Equipment (10-year life). Goodwill.. Salt Company reported retained earnings of P260, 000 on January 1, 20x4, and 320,000 on December 31, 20x4. Salt Company reported net income of P90,000 and declared dividends of P30,000 in 20x4. Also, Pepper reported operating income in 20x4 in the amount of P700,000 with dividends paid of P25,000 and retained earnings on December 31, 20x4, of P3,500,000. The sales, cost of sales and intercompany sales made during 20x4 are as follows: Pepper Co. P 2,500,000 1,250,000 Salt Co. 1,200,000 875,000 Sales.. Cost of Sales. Intercompany sales: Pepper to Salt. Salt to Pepper. 320, 000 290, 000 There were no intercompany sales prior to 20x3 and unrealized profits on January 1 and on December 31, 20x4, resulting from intercompany sales are summarized below: Unrealized Intercompany Profit on Resulting from: 1/1/x4 Sales by Salt Company to Pepper Company Sales by Pepper Company to Salt Company P 10,000 15,000 12/31/x4 P 5,000 20,000

Net Operating Income (-) Interest Expense (-) Cost Recovery Allowance (=) _________________ (or) NOI (minus) Interest Expense (minus) Cost Recovery Allowance (equals) ___________________ Group of answer choices

Departmental direct operating margin less departmental indirect expenses equals a.direct operating expenses. b.total operating income. c.departmental operating income. d.departmental income.

7. Consider the following: Code: A= Gross Profit to Net Sales Ratio B= Gross Profit to Cost of Goods Sold Ratio Which equation is correct? B = A a. 1 - A b. B = 1 + A A с. B = 1 - A A d. B = A 1 + A