THINK POSITIVE COMPANY is a trading company engaged in the buying and selling of stuff toys.

To
cater the needs of distant customers, Think Positive established a branch in Mars early last year.
Immediately upon establishment of the new branch in Mars, Think Positive Company transferred P60 000
cash to the said branch to finance its operations and to which it shipped merchandise before the branch
opening with a billing price of P 2 715 800.
On same date, the home office purchased furniture and fixtures for the use of the branch amounting to
P117 000. Records of assets were kept in the books of the home office. The branch, however, debited
“Furniture and Fixture” account and credited its reciprocal account upon receipt of the asset. The asset
has a useful life of 3 years.
During the year, the home office billed the branch a total of P735 310 for additional shipments of
inventory. Some defective merchandise were shipped back by the branch and was given credit for P129
826 on the return. The branch also made purchases of merchandise totalling P74 100.05 from outside
suppliers. At the end of the year, a physical count disclosed a branch ending inventory of P185 000 which
included P20 000 of merchandise acquired from outside suppliers.
If merchandise shipments from the home office were billed at 39% above cost, what was the total cost of
merchandise available for sale, net of returns, at the branch during the year?

SECRET CORPORATION established several branches in Narnia. On December 31, 1965, its Branch
#029 showed a Home Office account balance of P118 960 and the home office books showed an
Investment in Branch #029 account balance of P126 310. The transactions between the home office and
the branch for this year were:
On January 2, 1965, Branch #029 acquires equipment for P200 000 to be carried in the home office
books. The equipment has a useful life of 5 years and a salvage value of P20 000 depreciated under the
straight line method.
1/14 The home office has not informed the branch #092 of its share in the advertising expense
amounting to P17 000.
2/5 The branch #029 returned merchandise worth P10 400 to the home office and was duly
acknowledge by the latter during the year.
3/28 Accounts receivable of the branch #029 amounting to P30 000 was collected by home office, net
of 4% discount. The branch #029 has not yet been notified.
4/3 Home office collects a Branch #029 accounts receivable of P4 760 and fails to notify the branch.
6/9 A P46 700 shipment, charged by Home Office to Branch #029, was actually sent to and retained
by Branch #092.
7/24 Home office was charged for P2 910 for merchandise returned by Branch #029 on December 30.
The merchandise is in transit.
9/18 A P5 110 emergency merchandise transfer from Branch #026 was not taken up in the Home
Office Books.
12/27 Branch #029 incorrectly depreciated the equipment under sum-of-the-years’ digits method.
The home office and the branch #029 already reconciled the item occured during the first quarter of the
year 1965. Home Office erroneously recorded Branch #029’s net income for 1965 at P62 740. The branch
reported a net income of P76 240.
What is the adjusted balances of the Home Office and Branch #029 reciprocal accounts on December 31,
1965?