Reference no: EM132746667
Question: On May 1, 2018, the Home Office in BACOLOD CITY establishes a sales
agency in SILAY CITY. The following assets are sent
to the sales agency on that date:
Cash (for the following fund to be operated under the imprest system) P100,000
Merchandise samples 240,000
During the month, the sales agency submits sales on account of P1,500,000 which was duly approved by the home office. Cost of merchandise shipped to fill the orders from customers obtained by the sales agency is P800,000. Home office disbursements chargeable to the agency are as follows: Furniture and fixtures, P150,000; manager's and salesmen's salaries, P88,000 and rent P35,000. On May 31, the sales agency working fund is replenished: paid P42,000. Sales agency samples are useful until December 31, 2018, which at that time, are believed to have a salvage value of 15% of cost.
Furniture are depreciated at 30% per annum.
What is the net profit of the SILAY CITY AGENCY for the month of May 2018?
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