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  • FINAL ROUND-Difficult-AFAR 1. The Home Office Bills Its Branch at 120% of Cost. in Turn, The Branch Sells The Merchandise To

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    Alfred Valenzuela
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    The branch office purchases inventory from the home office at 120% of cost. It then sells items to customers at 125% of the billed price from the home office. On August 1, inventory at the branch was destroyed by fire. Based on the sales, returns, discounts, and shipments for the month, the amount of inventory destroyed at cost was 52,800.

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    NJ

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    Mip Final Preboard

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    The branch office purchases inventory from the home office at 120% of cost. It then sells items to customers at 125% of the billed price from the home office. On August 1, inventory at the branch was destroyed by fire. Based on the sales, returns, discounts, and shipments for the month, the amount of inventory destroyed at cost was 52,800.

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    © All Rights Reserved
    Download as DOCX, PDF, TXT or read online from Scribd
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    52 views2 pages

    FINAL ROUND-Difficult-AFAR 1. The Home Office Bills Its Branch at 120% of Cost. in Turn, The Branch Sells The Merchandise To

    Uploaded by

    Alfred Valenzuela
    The branch office purchases inventory from the home office at 120% of cost. It then sells items to customers at 125% of the billed price from the home office. On August 1, inventory at the branch was destroyed by fire. Based on the sales, returns, discounts, and shipments for the month, the amount of inventory destroyed at cost was 52,800.

    Copyright:

    © All Rights Reserved
    Download as DOCX, PDF, TXT or read online from Scribd
    Flag for inappropriate content
    of 2

    FINAL ROUND-Difficult- AFAR

    1. The home office bills its branch at 120% of cost. In turn, the branch sells the merchandise to
    customers at 125% of the billed price. On August 1, 2019, all of the merchandise of the
    branch were destroyed by fire. The information was available:

    Inventory beginning, at billed price 24,000


    Shipments from home office during the 240,000
    month
    Sales 264,000
    Sales Return 13,200
    Sales Discounts 6,600

    What is the amount of inventory at cost destroyed by fire?

    A. 57,200
    B. 52,800
    C. 19,360
    D. 96,800

    Sales 264,000.00

    Sales Return 13,200.00

    Net Sales 250,800.00


    COGS Rate (100%/125%) 80%

    COGS @ billed price 200,640.00

    Beg. Inventory at billed price 24,000.00

    Shipment from head office during the month 240,000.00

    Total Goods Available for Sale @ billed price 264,000.00

    COGS at billed price (200,640.00)

    Ending Invty. @ billed price 63,360.00


    HO Mark-up 120%

    Ending invty. Destroyed @ Cost 52,800.00

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