Question
On October 1, 2017. Eastwood main office established a sales agency in Pasay City. The main office sent samples of its merchandise amounting to P84.000
On October 1, 2017. Eastwood main office established a sales agency in Pasay City. The main office sent samples of its merchandise amounting to P84.000 and a working fund amounting to P360,000 to be maintained on the imprest basis. The samples sent were intended to last until August 1, 2018. During the first two months of operations, the agency transmitted to the home office sale of goods costing P1,458,000, but the home office was able to fill-up 25% only of th said transmitted sales orders. Collections from customers amounted to P412,250, net of 3% sales discount. Payments made by the agency during October and November were as follows: monthly rent of P28.800, advertising expense worth P28,000 and utilities amounting to P36.000. The agency purchased an equipment worth P45,000 which will be depreciated at 2% per month. The gross profit rate on sales agency order is 20% of gross sales.
CALCULATE THE NET INCOME OF THE AGENCY FOR TWO MONTHS ENDED NOV. 30, 2017.
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