The manager of Q Corporation is recommending the closure of Branch B in order to eliminate its net loss of P33,750. The income statement shows: Home Branch Branch Office A В Sales P800,000 P300,000 P500,000 P400,000 P120,000 P250,000 30,000 20,000 56,250 P720,000 P226,250 P533,750 P73,750 P(33,750) Cost of sales Operating expenses directly related to sales Operating expenses indirectly related to sales General & administrative expenses allocated Total costs & expenses Operating income 80,000 90,000 150,000 80,000 110,000 93,750 P80,000 If Branch B is closed, one personnel (with salary of P30,000) have to be transferred to the home office. Branch B has furniture costing P120,000 and with an estimated useful life of 5 years has to be transferred also to the home office. REQUIRED: 1. Do you agree with the manager? Explain.

The manager of Q Corporation is recommending the closure of Branch B in order to eliminate its net loss of P33,750. The income statement shows: Home Branch Branch Office A В Sales P800,000 P300,000 P500,000 P400,000 P120,000 P250,000 30,000 20,000 56,250 P720,000 P226,250 P533,750 P73,750 P(33,750) Cost of sales Operating expenses directly related to sales Operating expenses indirectly related to sales General & administrative expenses allocated Total costs & expenses Operating income 80,000 90,000 150,000 80,000 110,000 93,750 P80,000 If Branch B is closed, one personnel (with salary of P30,000) have to be transferred to the home office. Branch B has furniture costing P120,000 and with an estimated useful life of 5 years has to be transferred also to the home office. REQUIRED: 1. Do you agree with the manager? Explain.

FINANCIAL ACCOUNTING

10th Edition

ISBN:9781259964947

Author:Libby

Publisher:Libby

Chapter1: Financial Statements And Business Decisions

Section: Chapter Questions

Problem 1Q

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