The Lakers Corporation located in Cebu City, opened a branch on January 1, 2021 in Manga

City. Selected transactions of the home office and branch for the month of September 2020 are
summarized as follows:
9/2/2021 The home office shipped P250,000 cost of merchandise to the branch.
9/5/2021 The branch sold P150,000 to a customer on account.
9/8/2021 Additional merchandise shipped from the home office P90,000.
9/15/2021 The branch returned to the home P6,000 (7,500 BP) worth of merchandise.
9/25/2021 Sales for cash in the amount P290,000 were recorded by the branch.
9/27/2021 P120,000 worth of merchandise were shipped to the branch.
9/30/2021 Merchandise in the amount of P8,000 (10,000 BP) were returned to the home
office.
* Ending inventory of the branch is at P150,000 (187,500 BP)

Required: (1) Journal entry of the home office and the branch assuming the shipment is (a)
cost (b) billed price (25% of cost)
(2) Compute the gross income of the branch (a) cost (b) billed price
(3) Reconcile the difference between the gross income of the branch as far as the
branch is concerned and the gross income of the branch as far as the home
office is concerned (true branch income).

BILLED PRICE = (COST OF MERCHANDISE x percent of cost) + cost of merchandise

= (250,000 x 25%) + 250,000