CHAPTER 13 MULTIPLE CHOICE 13-1: c 13-2: a Goods available for sale: At billed price (P30,000 + P180,000) At cost (P210,000 / 120%) Balance of Allowance for Overvaluation account before adjustment 13-3: c Inter-company inventory profit (IIP) before closing Less: IIP from shipment from home office Billed price Cost (P300,000 / 120%) IIP from beginning inventory at billed price Divided by Cost of branch’s beginning inventory 13-4: P300,000 250,000 Billed Price P15,000 110,000 % 150% 150% Cost P10,000 73,333 5,000 150% 3,333 50,000 P 16,000 ÷ 20% P 80,000 Overvaluation P 5,000 36,667 P41.667 1,667 P40,000 b Shipment to branch, at billed price Shipping cost Total cost Sold (50%) Inventory 13-6: P 66,000 a Beginning inventory from HO Shipments Balance before adjustment Ending inventory from HO Required adjustments 13-5: P210,000 175,000 P 35,000 P375,000 2,000 P377,000 188,500 P188,500 a Shipment to branch, at cost Shipping cost Billed price Sold (50%) Inventory, at billed price P312,500 2,000 P314,500 157,250 P157,250 17 13-7: c Home office account balance after closing branch profit Less: branch profit Investment in branch account balance before closing branch profit 13-8: d Branch ending inventory, at billed price Acquired from home office, at billed price: Cost (P6,000 / 20%) Mark-up Purchased from outsiders 13-9: P765,000 130,000 P635,000 P 50,000 P30,000 6,000 36,000 P 14,000 b Cost of goods sold – Home office Cost of goods sold – Branch: Billed price Less: overvaluation (P110,000 – P90,000) Combined cost of goods sold P590,000 P300,000 20,000 280,000 P870,000 13-10: c 13-11: d Overvaluation of branch ending inventory acquired from HO: Billed price Cost (P28,600 / 130%) Adjusted balance of allowance for overvaluation account P 28,600 22,000 P 6,600 13-12: b Shipment from home office Expenses Cash remittance to home office Home Office account balance before closing P 90,000 17,000 (70,000) P 37.000 13-13: b Shipment to branch, at cost Ending inventory, at cost (P70,000 / 30%) Cost of goods sold Freight (P6,000 x P50,400/P72,000) Total P 72,000 ( 21,600) P 50,400 4,200 P 54,600 13-14: b (20% of P30,000) 13-15: b (P151,200 / 140%) 18 13-16: c Sales Cost of goods sold Shipments from home office (P151,200/140%) P108,000 Inventory, 1/1 (P28,350 / 140%) 20,250 Inventory, 12/31 (P25,200 / 140%) ( 18,000) Gross profit Expenses Branch profit as far as the home office is concerned P270,000 110,250 P159,750 90,000 P 69,750 13-17: c Unsold merchandise Less: Merchandise acquired from home office, at billed price Merchandise acquired from outsiders Merchandise acquired from home, at cost (P7,500 / 20%) Branch inventory at cost, 12/31 P 60,000 45,000 P 15,000 37,500 P 52,500 13-18: a Branch inventory, 1/1 Acquired from home office – at billed price: Overvaluation [P99,900 – (P390,000 – P300,000)] Cost (P9,900 / 30%) Purchases from outsiders P 54,600 P 9,900 33,000 42,900 P 11,700 13-19: c Acquired from home office [(P60,000 x 80%) ÷ 120%] Acquired from outsiders (P60,000 x 20%) Branch inventory, 12/31 – at cost P 40,000 12,000 P 52,000 13-20: b Sales (P148,000 + P144,000) Cost of sales – at cost to home office: Shipment from home office (P108,000 / 120%) P90,000 Purchases 52,000 Inventory, 12/31 (no 19 above) (52,000) Gross profit Expenses (P76,000 + P24,000) Branch net income (actual) P192,000 90,000 P102,000 100,000 P 2,000 13-21: b Allowance for overvaluation account balance Overvaluation on the shipment (P200,000 x 25%) Overvaluation on the branch beginning inventory Cost of branch beginning inventory (P7,500 / 25%) Branch beginning inventory – at billed price P 57,500 50,000 P 7,500 30,000 P 37,500 19 13-22: b Sales Cost of goods sold – cost to home office Beginning inventory P 30,000 Shipment from home office 200,000 Ending inventory (P40,000 / 125%) ( 32,000) Gross profit Expenses Branch net income as far as the home office is concerned P400,000 198,000 P202,000 100,000 P102,000 13-23: b Branch inventory, 1/1 Acquired from home- at billed price Overvaluation [P24,000 – (P80,000 – P60,000)] P 4,000 At cost [(P4,000 ÷ (P20,000 / P60,000)] 12,000 Acquired from outsiders P 20,000 16,000 P 4,000 13-24: a Sales Cost of sales (at cost to home office) Inventory, 1/1 (P12,000 + P4,000) P16,000 Shipments from home office 60,000 Purchases 30,000 Inventory, 12/31 [(P20,000÷133 1/3%) +P6,000] (21,000) Gross profit Expenses Branch net income (actual) P200,000 85,000 P115,000 60,000 P 55,000 13-25: a Inventory, 1/1 Shipments from home office Overvaluation Cost of goods available for sale Percentage of mark-up (P72,500 / P362,500) P 75,000 360,000 ( 72,500) P362,500 20% 13-26: b 20 13-27: a Billing percentage above cost (P20,000 / P80,000) Branch inventory, 6/1 – at cost (P12,000 / 125%) Home office inventory, 6/1 Purchases Goods available for sale Inventory, 6/30 – at cost: Branch (P10,000 / 125%) Home office Combined cost of goods sold 25% P 9,600 40,000 160,000 P209,600 P 8,000 60,000 68,000 P141.600 13-28: d Sales Cost of goods sold Gross profit Expenses Combined net income P450,000 141,600 P308,400 150,000 P158,400 13-29: d Sales Cost of goods sold: Inventory, 1/1: Home office P57,500 Branch (P22,250 / 125%) 17,800 P 75,300 Purchases 410,000 Goods available for sale P 485,300 Inventory, 12/31: Home office P71,250 Branch (P29,250/120%) 24,375 95,625 Gross profit Expenses Combined net income P687,500 389,675 P297,825 241,750 P 56,075 13-30: a Sales Cost of goods sold: Inventory, 1/1: Home office Branch [P15,000 + (P49,000 / 122.5%)] Purchases Goods available for sale Inventory, 12/31: Home office Branch [P11,000 + (P52,000 / 133 1/3%)] Gross profit Expenses Combined net income P669,000 P160,000 55,000 P110,000 50,000 P215,000 460,000 P675,000 160,000 515,000 P154,000 145,000 P 9,000 21 13-31: a The entries made by the branch to record the interbranch transfer of merchandise are: Books of Branch 1: Home office 19,500 Freight in 3,500 Shipment from home office 16,000 Books of Branch 3: Shipment from home office 16,000 Freight in 4,000 Cash 2,500 Home office 17,500 Therefore the home office would make the following entry: Investment in Branch 17,500 Excess freight 2,000 Investment in Branch 19,500 13-32: a Unadjusted balances Error in recording shipment Error in recording expense Unrecorded cash remittance Adjusted balances (Home office books) Investment in branch 77,000 (31,000) 46,000 (Branch books) Home office 61,000 (10,000) 5,000 46,000 13-33: c 13-34: a Home office books Inv in Bacolod 25,000 Inv in Cebu 25,000 Cebu branch books Home office 25,000 Cash 25,000 Inv in Bacolod 34,300 Inv in Cebu 34,300 Home office 34,300 SD 700 AR 35,000 Inv in Bacolod 62,500 Home office 212,500 Expenses 150,000 Expenses 37,500 Inv in Cebu 212,500 Cash 250,000 Bacolod branch books Cash 25,000 Home office 25,000 Cash 34,300 Home office 34,300 Expenses 62,500 Home office 62,500 Inv in Cebu 253,000 Freight in 3,000 S to branch 200,000 S from HO 250,000 Allowance 50,000 Home office 253,000 Cash 3,000 Inv in Bacolod 252,700 Home office 253,000 Excess freight 300 S from H 253,000 Inv in Cebu 253,000 22 (Home office books) Investment in Cebu Branch 25,000 34,300 212,500 253,000 253,000 524,800 271,800 (Bacolod branch books) Home Office 25,000 34,300 62,500 252,700 374,500 23 PROBLEMS Problem 13-1 (a) Journal Entries Home Office Books Branch Books (1) Investment in branch Cash 18,000 (2) Investment in branch Cash 3,000 (3) Investment in branch Shipment to branch Allowance for overValuation (4) Equipment Home office 18,000 18,000 Rent expense Home office 3,000 3,000 Shipment from HO Home office 100,000 80,000 100,000 18,000 3,000 100,000 20,000 No entry Operating expenses Cash Cash 11,000 11,000 105,000 Sales (5) Cash 60,000 Investment in branch (b) 60,000 Home office Cash 105,000 60,000 60,000 Working Paper Elimination Entries (1) (2) (3) Home office 61,000 Investment in branch To eliminate reciprocal accounts computed as follows: Equipment purchased P 18,000 Rent paid 3,000 Inventory shipped 100,000 Cash transfer ( 60,000) Balance P 61,000 Shipment to branch Allowance for overvaluation of branch inventory Shipment from home office To eliminate inter-company shipments Inventory, 12/31 (Income statement) Inventory, 12/31 (Balance Sheet) To reduce inventory, 12/31 to cost 61,000 80,000 20,000 100,000 5,000 5,000 24 (c) Closing Entries – Branch Books Sales Inventory, 12/31 Rent expense Shipment from home office Operating expenses Income summary Income summary Home office 105,000 25,000 3,000 100,000 11,000 16,000 16,000 16,000 Problem 13-2 a Branch Books - Equipment Shipment from home office Cash Home office 50,000 60,000 10,000 Purchases Cash or accounts payable 30,000 Prepaid rent Home office 10,000 Cash Accounts receivable Sales 40,000 50,000 Advertising expense Salary expense Cash 8,000 5,000 - - - Home office Cash 120,000 30,000 10,000 90,000 13,000 10,000 10,000 Home office Accounts receivable 3,000 Rent expense Prepaid rent 5,000 3,000 5,000 25 Home Office Books - - - Investment in branch 120,000 Equipment Shipment to branch Allowance for overvaluation of branch inventory Cash To record assets sent to branch 50,000 40,000 20,000 10,000 Investment in branch Cash To record rent expense of the branch 10,000 10,000 Cash 10,000 Investment in branch To record cash remittance from branch - 10,000 Cash 3,000 Investment in branch To record collection of branch receivable b 3,000 Income Statement Sales Cost of goods sold Shipment from home office – at cost Purchases Goods available for sale Ending inventory: From home office (1/3) From outsiders (1/4) Gross profit Expenses: Advertising expense Salary expense Rent expense Net income P90,000 P40,000 30,000 70,000 P13,333 7,500 (20,833) P 8,000 5,000 5,000 49,167 P40,833 18,000 P22,833 Problem 13-3 a Investment in Branch account – beginning balance Cash transfer Inventory transfer Rent allocated Expenses allocated Inventory transfer Transportation allocated Unadjusted balance – Investment in Branch account P 86,000 ( 32,000) 34,500 1,000 3,000 46,000 3,000 P141,500 26 b Home Office account – beginning balance Inventory transfer Rent allocated Expenses allocated Inventory transfer (error made) Cash transfer Home Office account – unadjusted balance c Reconciliation Statement Unadjusted balances, 1/31 Unrecorded cash transfer Error in recording transfer (overstated) Expense allocation not recorded Adjusted balances, 1/31 P 54,000 34,500 1,000 3,000 64,000 ( 74,000) P 82,500 Investment in Branch P141,500 ( 74,000) Home Office P 82,500 18,000 ( 3,000) P 67,500 P 67,500 Problem 13-4 a b Books of Branch X Shipment from home office Freight-in Home office 5,000 300 Home office Shipment from office 5,800 5,800 Books of Branch Y Shipment from home office Freight-in Home office c 5,300 5,000 600 5,600 Books of the Home Office Investment in branch – X Shipment to branch – X Cash 5,300 Investment in branch – Y Inter-branch freight expense Investment in branch – X 5,000 600 Shipment to branch – X Shipment to branch – Y 5,000 5,000 300 5,600 5,000 27 Malakas Company Combination Worksheet Year Ended December 31, 2008 Malakas Davao Debits Cash Accounts receivable Inventory, 12/31 Investment in branch Land, bldg, and equipment Shipment from office Purchases Depreciation expense Advertising expense Rent expense Miscellaneous expense Inventory, 1/1 Total debits 25,000 108,000 209,000 207,000 340,000 348,000 25,000 36,000 12,000 40,000 175,000 1,525,000 18,000 25,000 42,000 112,000 96,000 8,000 15,000 5,000 20,000 35,000 376,000 Credits Accumulated depreciation Accounts payable Notes payable Home office 80,000 37,000 220,000 - 16,000 15,000 176,000 Common stock Retained earnings, 1/1 Sales Shipment to branch Inventory, 12/31 100,000 240,000 529,000 110,000 209,000 127,000 42,000 Adjustments and Eliminations Debit Credit (4) 14,000 (5) 16,000 (7)207,000 (3) 14,000 (6)110,000 43,000 133,000 249,000 452,000 (1) 9,000 (1) 6,000 (1) 2,000 (2) 10,000 348,000 33,000 60,000 23,000 62,000 200,000 877,000 (7)207,000 96,000 52,000 220,000 - (1) 17,000 (3) 14,000 100,000 (2) 10,000 (230,000) (655,000) (6)110,000 (5) 16,000 (4) 14,000 Combined net income (249,000) (179,000) Combined retained earnings Totals Income Retained Statement Earnings Balance Dr (Cr) Dr (Cr) Sheet (179,000) (409,000) 1,525,000 376,000 388,000 388,000 (409,000) 877,000 Adjustments and Elimination Entries (1) (2) (3) Advertising expense Rent expense Miscellaneous expenses Home office Unrecorded expenses allocated to the branch 9,000 6,000 2,000 17,000 Retained earnings, 1/1 10,000 Inventory, 1-1 To eliminate unrealized inventory profit of preceding year 10,000 Shipment from home office Home office Unrecorded shipments 14,000 14,000 28 (4) (5) (6) (7) Inventory, 12/31 (debits) Inventory (credits) Shipment not yet received by the branch 14,000 Inventory, 12/31 (debits) Inventory (credits) To reduce ending inventory to cost 16,000 Shipment to branch Shipment from home office To eliminate inter-company shipments 110,000 Home office Investment in branch To eliminate reciprocal accounts 207,000 14,000 16,000 110,000 207,000 Problem 13-6 a Eliminating Entries (1) (2) (3) (4) (5) Home office Investment in branch – Silver 395,000 Home office Investment in branch – Opal 260,000 395,000 260,000 Unrealized intra-company profit – Silver Unrealized intra-company profit – Opal Inventory – from home office 20,000 16,000 Inventory Inventory – from home office 90,000 Unrealized intra-company profit – Silver Equipment 40,000 36,000 90,000 40,000 29 Ginto Company Balance Sheet Working Paper December 31, 2008 Cash Accounts receivable Inventory Inventory – from home office Land Buildings and equipment Investment in branch – Silver Investment in branch – Opal Total debits Accumulated depreciation Accounts payable Bonds payable Common stock Retained earnings Home office Unrealized intra-company profit Silver Opal Total credits b Home Office 81,000 100,000 260,000 Silver Branch 20,000 40,000 50,000 70,000 Opal Branch 15,000 25,000 44,000 56,000 70,000 700,000 395,000 260,000 1,866,000 30,000 350,000 20,000 200,000 560,000 360,000 2,055,000 280,000 110,000 400,000 300,000 700,000 - 120,000 45,000 80,000 20,000 480,000 175,000 400,000 300,000 700,000 395,000 260,000 60,000 16,000 1,866,000 560,000 360,000 Eliminations Debit Credit (4) 90,000 Combined 116,000 165,000 444,000 ( 3) 36,000 (4) 90,000 (5) 40,000 (1)395,000 (2)260,000 120,000 1,210,000 (1)395,000 (2)260,000 (3) 20,000 (5) 40,000 (3) 16,000 821,000 821,000 2,055,000 Ginto Company Combined Balance Sheet December 31, 2008 Assets Cash Accounts receivable Inventory Land Buildings and equipment Less: Accumulated depreciation Total assets Liabilities and Stockholders’ Equity Liabilities Accounts payable Bonds payable Total liabilities Stockholders’ Equity Common stock Retained earnings Total liabilities and stockholders’ equity P 116,000 165,000 444,000 120,000 P1,210,000 480,000 730,000 P1,575,000 P 175,000 400,000 P 575,000 P 300,000 700,000 1,000,000 P1,575,000 30 Problem 13-7 a b Books of Branch P Shipment from home office Freight-in Home office 8,000 50 Home office Shipment from home office Freight-in Cash 8,120 8,000 50 70 Books of Branch Q Shipment from home office Freight-in Home office c 8,050 8,000 80 8,080 Books of Home Office Investment in branch – P Shipment to branch – P Cash 8,050 Investment in branch – Q Inter-branch freight expense Investment in branch – P 8,080 40 Shipment to branch - P Shipment to branch – Q 8,000 8,000 50 8,120 8,000 Problem 13-8 Debits: Cash = P36,000 (add the book values and include the P9,000 transfer in transit) Accounts receivable = P118,000 Inventory, 12/31 = P151,000 (branch balance would be P81,000 when the shipment in transit is included This balance must be adjusted to cost of P54,000 (P81,000 ÷ 150%) and then add to home office balance of P97,000 Investment in branch = (eliminated) Land, buildings and equipment = P460,000 Shipment from home office = (eliminated) Purchases = P429,000 Depreciation expense = P28,000 (add the two book values and the year-end allocation) Advertising expense = P58,000 (add the two book values and the year-end allocation) Rent expense = P30,000 (add the two book values and the year-end allocation) Miscellaneous expense = P100,000 (add the two book values and the year-end allocation) Inventory, 1/1 = P145,000 (branch balance is adjusted to cost of P24,000 (P36,000 / 150%), and then added to home office balance 31 Total debits = P1,555,000 (add the above totals) Credits Accumulated depreciation = P108,000 Accounts payable = P104,000 Notes payable = P180,000 Home office = (eliminated) Common stock = P60,000 (home office balance) Retained earnings, 1/1 = P248,000 (home office balance after reduction of P12,000 unrealized profit in beginning inventory of branch Cost is P24,000 (P36,000 / 150%) which indicates the P12,000 unrealized Sales = P704,000 Shipment to branch = (eliminated) Inventory, 12/31 = P151,000 Total credits = P1,555,000 (add the above totals) Reconciliation Statement Investment in Branch account balance (Home office books) Unrecorded cash transfer Adjusted balance P177,000 ( 9,000) P168,000 Home Office account balance (Branch books) Inventory transfer in transit Expense allocated not yet recorded Adjusted balance P123,000 21,000 24,000 P168,000 Problem 13-9 Home Office Books (1) Investment in branch Shipment to branch Unrealized inventory profit (2) Cash Investment in branch Closing entries: (3) Sales Inventory, 12/31 Shipment to branch Purchases Expenses Income summary (4) Investment in branch Branch income summary Branch income summary Investment in branch Case A 60,000 Case B 75,000 60,000 - 61,200 60,000 15,000 61,200 61,200 130,000 8,000 60,000 60,000 30,000 61,200 61,200 130,000 8,000 60,000 150,000 17,200 30,800 61,200 130,000 8,000 60,000 150,000 17,200 30,800 150,000 17,200 30,800 13,000 13,000 500 14,000 500 Unrealized inventory profit Branch income summary Income summary Income summary Retained earnings Case C 90,000 13,500 14,000 27,000 500 13,000 43,800 43,800 43,800 14,000 13,000 43,800 43,800 43,800 32 Ilocos Branch Books Case A (1) Shipment from home office Home office 60,000 (2) Accounts receivable Sales 81,000 (3) Cash 64,000 Case B 75,000 60,000 81,000 14,000 (5) Home office Cash 61,200 90,000 81,000 81,000 64,000 64,000 (4) Expenses Cash 90,000 75,000 81,000 Accounts receivable Case C 81,000 64,000 64,000 14,000 14,000 64,000 14,000 14,000 61,200 61,200 14,000 61,200 61,200 61,200 Closing entries (6) Sales Inventory 12/31 Shipment from HO Expenses Income summary 81,000 6,000 (7) Income summary Home office 13,000 Home office Income summary 81,000 7,500 60,000 14,000 13,000 81,000 9,000 75,000 14,000 500 90,000 14,000 14,000 13,000 500 14,000 500 14,000 33 Working Paper for Combined Financial Statements December 31, 2008 Home Office Branch Eliminations Debit Credit Combined Income Statement Sales Merchandise inventory, 12/31 Shipment to branch Total credits 130,000 8,000 60,000 198,000 Shipment from home office Purchases Expenses Total debits Net income(loss) carried forward 150,000 17,200 167,200 30,800 14,000 104,000 (14,000) 150,000 31,200 181,200 43,800 30,800 (14,000) 43,800 30,800 (14,000) 43,800 39,000 45,000 8,000 28,800 120,800 (11,200) 17,000 9,000 27,800 62,000 14,000 103,800 Retained Earnings Statement Net income (loss) from above Retained earnings, 12/31 Carried forward Balance Sheet Cash (overdraft) Accounts receivable Merchandise inventory, 12/31 Investment in branch Total debits Accounts payable Unrealized inventory profit Capital stock Retained earnings, from above Home office Total credits 81,000 9,000 90,000 90,000 20,000 30,000 40,000 30,800 120,800 211,000 14,000 225,000 (3) 3,000 (2) 60,000 (2) 90,000 (3) 3,000 (1) 28,800 14,800 (2) 30,000 (14,000) 28,800 14,800 (1) 28,800 121,800 121,800 20,000 40,000 43,800 103,800 34 Problem 13-10 (1) Consolidated Working Paper Home Office Branch A Branch B Debits Cash Inventories 33,000 70,000 22,000 21,000 13,000 15,000 Other current assets Investment in Branch A Investment in Branch B Cost of sales * 50,000 45,000 42,000 80,000 25,000 23,000 57,000 45,000 Expenses 90,000 410,000 25,000 150,000 20,000 116,000 40,000 100,000 50,000 15,000 11,000 45,000 30,000 Credits Current liabilities Capital stock Retained earnings, Jan Home Office Allow for overvaluation of Branch inv – Branch A Allow for overvaluation of Branch inv – Branch B Sales 13,000 12,000 195,000 410,000 Adj & Elim (dr) Cr Balance Sheet 68,000 A (12,000) B 8,000 D 45,000 D 42,000 B (8,000) C 25,000 110,000 98,000 (165,000) (135,000) 276,000 66,000 100,000 50,000 A 12,000 D (87,000) C (13,000) C (12,000) 90,000 150,000 75,000 116,000 360,000 Net income • Income Statement 60,000 60,000 276,000 Book value of cost of sales from home office and branches Home Office Inventory, January 1, Purchases Shipment to branch Shipment from home office Goods available for sale Inventory, Dec 31 Cost of sales P 80,000 160,000 ( 90,000) P150,000 ( 70,000) P 80,000 Investment in Branch A Investment in Branch B P 18,000 P24,000 60,000 P 78,000 ( 21,000) P 57,000 36,000 P 60,000 (15,000) P 45,000 35 (2) Reconciliation of Home Office and Investment in Branch accounts Unadjusted balances, Dec.31 Books of Home Office Investment Investment In Branch A In Branch B P 45,000 P 42,000 Books of Branch A Home Office P 45,000 Shipments in transit to Branch B Branch Profit (Schedule 1) Adjusted balances, December 31 Books of Branch B Home Office P 30,000 12,000 8,000 P 53,000 10,000 P 52,000 8,000 10,000 P 53,000 P 52,000 Schedule 1: Sales Cost of sales: Beginning inventory Shipment from home office Goods available for sale Ending inventory Cost of sales Gross profit Expenses Net profit Branch A P90,000 P18,000 60,000 78,000 21,000 57,000 33,000 25,000 P 8,000 Branch B P75,000 P24,000 48,000 72,000 27,000 45,000 30,000 20,000 P10,000 36 37 ... 61,200 61,200 130 ,000 8,000 60,000 60,000 30,000 61,200 61,200 130 ,000 8,000 60,000 150,000 17,200 30,800 61,200 130 ,000 8,000 60,000 150,000 17,200 30,800 150,000 17,200 30,800 13, 000 13, 000 500... 28,600 22,000 P 6,600 13- 12: b Shipment from home office Expenses Cash remittance to home office Home Office account balance before closing P 90,000 17,000 (70,000) P 37.000 13- 13: b Shipment to... x P50,400/P72,000) Total P 72,000 ( 21,600) P 50,400 4,200 P 54,600 13- 14: b (20% of P30,000) 13- 15: b (P151,200 / 140%) 18 13- 16: c Sales Cost of goods sold Shipments from home office (P151,200/140%)