The following information pertains to shipments of merchandise from Home Office to Branch during 2006:

Home Office’s cost of merchandise

$160,000

Intracompany billing

200,000

Sales by Branch

250,000

Unsold merchandise at Branch on December 31, 2006

20,000

In the combined income statement of Home Office and Branch for the year ended December 31, 2006, what amount of the above transactions should be included in sales?

  1. $250,000
  2. $230,000
  3. $200,000
  4. $180,000