ABC Co. has a branch operation in Morayta. Merchandise is shipped to the branch at a transfer price of 30% more than cost. At the end of 2022, ABC Co. has determined that the branch should be allocated common expenses but the branch has not yet been notified of the following allocated amounts:
Marketing expense
|
P15,000
|
Rent expense
|
10,000
|
Other expense
|
5,000
|
In addition, a shipment costing P25,000 is still in transit as of December 31, 2022 while a P12,000 branch remittance has not been received by the home office due to limited bank operations as of December 31.
The branch’s accountant is unaware of the accounting treatment of shipments of inventory from the home office and has recorded these as normal purchases. The beginning accounts payable includes P130,000 payable to the home office.
A trial balance of the home office and the branch, before any necessary adjustments, is provided:
|
ABC Co.
|
|
Branch
|
Debits:
|
|
|
|
Cash
|
P 35,000
|
|
P 120,000
|
Accounts receivable
|
85,000
|
|
40,000
|
Investment in Branch
|
480,000
|
|
-
|
Plant assets
|
400,000
|
|
238,500
|
Purchases
|
450,000
|
|
240,000
|
Depreciation expense
|
15,000
|
|
10,000
|
Marketing expense
|
70,000
|
|
15,000
|
Rent expense
|
15,000
|
|
6,000
|
Other expense
|
30,000
|
|
5,000
|
Inventory 1/1/2022
|
125,000
|
|
40,000
|
|
|
|
|
Credits:
|
|
|
|
Accumulated depreciation
|
P 100,000
|
|
P 24,000
|
Accounts and other payables
|
191,500
|
|
406,500
|
Allowance for overvaluation
|
58,500
|
|
|
Home office – current
|
-
|
|
74,000
|
Ordinary share capital
|
150,000
|
|
-
|
Share premium
|
155,000
|
|
-
|
Retained earnings, 1/1/2022
|
250,000
|
|
-
|
Sales
|
490,000
|
|
340,000
|
Shipments to Branch
|
180,000
|
|
-
|
Inventory as of December 31, 2022 per physical inventory count made amounted to P50,000 for the home office and P45,000 for the branch. It was determined that P19,500 and P39,000 of the inventory of the branch came from the home office as of January 1, 2022 and December 31, 2022, respectively.
How much is the cost of goods sold to be presented in the Combined Statement of Comprehensive Income for 2022?