a Home office purchased 1,000 of merchandise, on account, at ₱20 per unit list

price, less ₱2 trade discount. FOB shipping point, freight costs ₱1 per ₱100 worth
of merchandise. E

b Home shipped 200 units of merchandise purchased in letter (a) to Good Branch at
120% billed price. Freight on the shipment amounted to ₱1.50 per ₱100 of billed
price. Freight was paid by Good Branch.

c Bad Branch is in short of 50 units, hence, Good Branch transferred 50 units of its
merchandise received from Home office in letter (b). Freight was paid by Good for
₱20. Shipments to Bad Branch include 10% mark-up on cost. Direct shipments F
from Home to Bad Branch amounted to ₱30.

d Bad branch returned 10 units to home office from goods shipped by Good Branch.
The freight on the goods returned costs ₱7 is paid by Home office.

e Home office shipped 300 units to Obnoxious Branch plus 25% mark-up on cost.
Freight was paid by Home Office at ₱0.15 per unit.

f From the units received in letter (E), Obnoxious Branch shipped 20 units to Good
Branch with a freight of ₱0.10 per unit. Direct shipments from Home office to
Good branch is ₱0.20 per unit. Mark-up on shipments to Good Branch is similar to
letter (B).
HOME OBNOXIOUS BRANCH
Investment in OB 6,817.50
Shipments to OB 18.18 300.00 5,454.00 Shipments from HO
Unrealized Mark-up on OBI 2 points 1,363.50 Home office

Freight in
Investment in OB 1 point 45.00 Home office
Cash 45.00

HOME OFFICE OBNOXIOUS BRANCH

Shipments to OB 2 points 363.60 Home Office
Unrealized mark-up on OBI 90.90 Shipments from Home Office
Investment in OB 454.50
Home office
Investment in GB 2 points 436.32 Freight in
Shipments to GB 363.60
Unrealized mark-up on GBI 72.72

Investment in GB 2 points 2.00

Excess freight 1.00
Investment in OB 3.00
OBNOXIOUS BRANCH

Shipments from HO 6,817.50

Home office 1 point 6,817.50

Freight in 1 point 45.00

Home office 45.00

OBNOXIOUS BRANCH GOOD BRANCH

Home Office 2 points 454.50 Shipments from Home Office
Shipments from Home Office 454.50 Home Office

Home office 1 point 3.00 Freight in

Freight in 3.00 Home office
Cash

Actual
HO to OB
OB to GB
Actual
Direct shipment 0.20
Excess freight
2 points 436.32
436.32

1 point 4.00
2.00
2.00

3.00
2.00
5.00
20.00 4.00
1.00
 HOME GOOD BRANCH
A Purchases 18,000.00
Accounts payable 18,000.00
18 1,000

Freight-in 180.00
Cash 180.00
18.18
B Investment in Good Branch 4,363.20 Shipments from HO
Shipments to Good Branch 3,636.00 Home office
Unrealized mark-up on GBI 727.20

Freight in
Cash

C Shipments to GB 909.00 Home office

Unrealized mark-up on GBI 181.80 Shipments from Home
Investment in GB 1,090.80 50/200

Investment in BB 999.90 Home office

Shipments to BB 909.00 Freight in
Unrealized mark-up on BBI 90.90
Home office
Investment in BB 30.00 Cash
Excess freight 6.36
Investment in GB 36.36

D Shipments to BB 181.80
Unrealized mark on BBI 18.18
Investment in BB 199.98

Excess freight 13.00

Investment in BB 6.00
Cash 7.00
 BAD BRANCH

4,363.20
4,363.20
TYMON:
Cost: 1,090.80 /1.20 =
909
65.45 Billed price to Bad
909 x 1.10 = 999.9
65.45

1,090.80 Shipments from Home office 999.90

1,090.80 Home office 999.90

16.36
16.36

20.00 Freight in 30.00

20.00 Home office 30.00

Home office 199.98

Shipments from Home Office 199.98

Home office 6.00

Freight in 6.00