Barros Corporation’s shipments to

and from its Brazil City Branch are

billed at
120% of cost. On December 31,
Brazil branch reported the
following data, at
billed prices: inventory, January 1,
of P33,600; shipments received
from home
office of P840,000; shipments
returned of P48,000; and
inventory, December 21,
of P36,000. What is the balance of
the allowance for over – valuation
of branch
inventory on December 31 before
adjustments?
1. Barros Corporation’s shipments to and from its Brazil City Branch are billed at 120% of cost. On
December 31, Brazil branch reported the following data, at billed prices: inventory, January 1, of
P33,600; shipments received from home office of P840,000; shipments returned of P48,000; and
inventory, December 21, of P36,000. What is the balance of the allowance for over – valuation of branch
inventory on December 31 before adjustments?

a. P5,600 c. P6,000

b. P137,000 d. P145,000

The Quezon City sales company

established a branch in Dumaguete
City early
last year. It shipped merchandise
and billed the branch for P300,000
prior to its
opening. For the year, it made
additional shipments at billed price
of P120,000.
Within the year the branch
shipped back P7500 inventory
and got the credit
memo for said returns. On the last
working day of the year, an
inventory count
was made. Ending inventory
of P185,000 was established,
consisting of
purchases from third parties at
P20,000, with the balance coming
from the home
office shipments at billed price.
The home office billed the branch
20% above
cost. The total purchases from
outside suppliers amounted to
P72,500. The total
cost of goods available for sale by
the branch at cost (net of over
valuation and
returns) amounted to
2. The Quezon City sales company established a branch in Dumaguete City early last year. It shipped
merchandise and billed the branch for P300,000 prior to its opening. For the year, it made additional
shipments at billed price of P120,000. Within the year the branch shipped back P7500 inventory and
got the credit memo for said returns. On the last working day of the year, an inventory count was
made. Ending inventory of P185,000 was established, consisting of purchases from third parties
at P20,000, with the balance coming from the home office shipments at billed price. The home office
billed the branch 20% above cost. The total purchases from outside suppliers amounted to P72,500. The
total cost of goods available for sale by the branch at cost (net of over valuation and returns) amounted
to

a. P416,250

b. P422,500

c. P435,200

d. P485,000

3. The Robert Corporation established its Bulacan branch in January 2016. During its first year of
operations, home office shipped to its Bulacan branch merchandise worth P130,000 which
included of 15% markup on cost. Sales on account totaled P250,000 while cash sales amounted
to P80,000. Bulacan reported operating expenses of P38,000 and ending inventory of P15,000, at
billed price. In so far as the home office is concerned, the real net income of Bulacan is

a. P82,000

b. P47,000

c. P177,000

d. P192,000
1. The Quezon City sales
company established a branch in
Dumaguete City early
2. last year. It shipped
merchandise and billed the
branch for P300,000 prior to its
3. opening. For the year, it
made additional shipments at
billed price of P120,000.
4. Within the year the branch
shipped back P7500 inventory
and got the credit
5. memo for said returns. On the
last working day of the year, an
inventory count
6. was made. Ending
inventory of P185,000 was
established, consisting of
7. purchases from third parties
at P20,000, with the balance
coming from the home
8. office shipments at billed
price. The home office billed
the branch 20% above
9. cost. The total purchases
from outside suppliers
amounted to P72,500. The total
10. cost of goods available for
sale by the branch at cost (net of
over valuation and
11. returns) amounted to
12. The Quezon City sales
company established a branch in
Dumaguete City early
13. last year. It shipped
merchandise and billed the
branch for P300,000 prior to its
14. opening. For the year, it
made additional shipments at
billed price of P120,000.
15. Within the year the branch
shipped back P7500 inventory
and got the credit
16. memo for said returns. On the
last working day of the year, an
inventory count
17. was made. Ending
inventory of P185,000 was
established, consisting of
18. purchases from third parties
at P20,000, with the balance
coming from the home
19. office shipments at billed
price. The home office billed
the branch 20% above
20. cost. The total purchases
from outside suppliers
amounted to P72,500. The total
21. cost of goods available for
sale by the branch at cost (net of
over valuation and
22. returns) amounted to