1. Apo Supply Company is engaged in merchandising both at its Home Office in Makati and its Branch in Davao City.

y. Selected
accounts taken from the trial balances of the Home Office and the Branch as of December 31, 2012 follow:

Makati Branch
Debits
Inventory, January 1, 2012 P 23,000 P 11,550
Davao Branch 58,300 -
Purchases 190,000 105,000
Freight-in from Home Office - 5,500
Sundry Expenses 52,000 28,000

Credits
Home Office - P 53,300
Sales P155,000 140,000
Sales to Branch 110,000 -
Allowance for OBI at January 1, 2012 1,000 -

Additional information:
- The Davao City branch gets all of its merchandise from the home office. The home office bills the goods at cost plus
a 10% mark-up. At December 31, 2012, a shipment with a billed value of P5,000 was still in transit. Freight on this
shipment was P250 and is to be treated as part of the inventory.
- Inventories on December 31, 2012, excluding the shipment in transit, follow:
Home office, at cost
P30,000
Branch, at billed price (excluding freight of P520) 10,400

What is the combined net income (loss) of the home office and the branch on December 31, 2012?

2. Selected account balances from the December 31, 2017 trial balances of Hero Company and its branch follow:

Hero Company Branch

Inventory, January 1, 2017 P 46,000 P 23,100
Investment in Branch 117,600 -
Purchases 380,000 -
Shipments from Home Office - 209,000
Freight-in - 10,450
Expenses 104,000 58,100
Home Office Current - (106,600)
Sales (310,000) (280,000)
Shipments to Branch (200,000) -
Allowance for Overvaluation in Branch Inventory (22,000) -

As of December 31, 2017, a shipment with a billing price of P11,000 was in transit to the branch. Freight cost,
typically 5% of the billing price, is inventoriable. Merchandise on hand at year-end (December 31, 2017) was: at
home office, P64,000 at cost; at branch, P33,000 at billing price (excluding freight). The beginning inventory, as
shown in the trial balance, includes the corresponding freight.
a. Determine the ending inventory (including freight) that will be reported by the Branch in its separate financial
statement for 2017.
b. Determine the CONSOLIDATED INVENTORY of Hero Company and its Branch for 2017.
c. Determine the CONSOLIDATED COST OF SALES of Hero Company and its Branch for 2017.
d. Determine the CONSOLIDATED NET INCOME of Hero Company and its Branch for 2017