The home office sent merchandise costing P300,000 to Branch 1 at a gross profit of 20%. Freight on shipment paid by the home office is 2% of the billed price. After two days, Branch 2 encountered inventory shortage and the Branch 1 was instructed to shipped to Branch 2 the 60% of the inventory sent by the home office. Shipment to Branch 2 resulted to a transportation cost of P5,000 paid by Branch 1. The freight if the shipment will come directly from home office to Branch 2 is P8,000. The freight cost is assumed to be incurred on per unit basis. Journalized the transaction in the books of Home Office, Branch 1, and Branch 2.

The home office sent merchandise costing P300,000 to Branch 1 at a gross profit of 20%. Freight on shipment paid by the home office is 2% of the billed price. After two days, Branch 2 encountered inventory shortage and the Branch 1 was instructed to shipped to Branch 2 the 60% of the inventory sent by the home office. Shipment to Branch 2 resulted to a transportation cost of P5,000 paid by Branch 1. The freight if the shipment will come directly from home office to Branch 2 is P8,000. The freight cost is assumed to be incurred on per unit basis. Journalized the transaction in the books of Home Office, Branch 1, and Branch 2.

FINANCIAL ACCOUNTING

10th Edition

ISBN:9781259964947

Author:Libby

Publisher:Libby

Chapter1: Financial Statements And Business Decisions

Section: Chapter Questions

Problem 1Q

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