Reference no: EM132523843

Question - On March 1, 2018, the home office in Makati established a branch in Quezon City to act as a sales agency. The followingassets are sent to the sales agency on that date: Cash (for the working fund to be operated under the imprest system), P44,000, and; Samples from the merchandise stock, P72,000. During March, the sales agency submits sales order of P544,000, sales per invoice was billed at P536,000 duly approved by the home office. Collections during the month amounted to P116,400, net of 3% discount. Cost of merchandise shipped to customers of the Quezon City sales agency is P248,000. Home office disbursements chargeable to the sales agency are as follows: Furniture, P80,000; Manager's and salesmen's salaries for the month, P43,200 and 10-month rent of office space, P72,000. On March 31, the sales agency working fund is replenished; paid vouchers submitted by the sales agency amounted to P35,850. Sales agency samples are useful until July 1, 2018 which, at this time, are believed to have a salvage value of 15% of cost. Furnitures are depreciated at 18% per annum.

What is the profit of the sales agency for the month of March?

a. 181,650 profit

b. 116,850 loss

c. 181,650 loss

d. 116,850 profit