PROBLEM 5-1. AGENCY TRANSACTIONS On July 1, 2019, the Power Company of Manila establishes an organization in Laguna to act as a sales agency. The following assets are sent to the agency on July 1: A working fund to be operated under the imprest system Samples from the merchandise stock Advertising materials and literature P10,000 50,000 12,500 During July the agency submits sales on account of P176,000 that are approved by the home office; cost of merchandise shipped in filling orders is P105,000. Home office disbursements chargeable to the agency are as follows: Furniture and fixtures for agency P 24,000 Salaries and commissions 17,500 8,000 Rent On July 31, the agency working fund is replenished. Paid expense vouchers submitted by the agency are as follows: Advertising expense P 3,250 Miscellaneous expense 6,000 The following information is used in adjusting the agency accounts on July 31: a. Agency samples will be useful until December 31; at that time it is believed that they will year basis. have a salvage value of 40% of cost. b. Approximately 2/5 of the advertising materials and literature remain on hand. c. Furniture and fixtures are to be depreciated on a 5 d. The agency manager is to receive a bonus of 5% of all sales above P100,000 a month, the bonus to be paid by the home offi at quarterly intervals. Required: 1. Journalize the agency transactions on the books of the home office including adjusting entries and closing entries. 2. Prepare a statement summarizing agency activities for the month of July. PROBLEM 5-1. AGENCY TRANSACTIONS On July 1, 2019, the Power Company of Manila establishes an organization in Laguna to act as a sales agency. The following assets are sent to the agency on July 1: A working fund to be operated under the imprest system Samples from the merchandise stock Advertising materials and literature P10,000 50,000 12,500 During July the agency submits sales on account of P176,000 that are approved by the home office; cost of merchandise shipped in filling orders is P105,000. Home office disbursements chargeable to the agency are as follows: Furniture and fixtures for agency P 24,000 Salaries and commissions 17,500 8,000 Rent On July 31, the agency working fund is replenished. Paid expense vouchers submitted by the agency are as follows: Advertising expense P 3,250 Miscellaneous expense 6,000 The following information is used in adjusting the agency accounts on July 31: a. Agency samples will be useful until December 31; at that time it is believed that they will year basis. have a salvage value of 40% of cost. b. Approximately 2/5 of the advertising materials and literature remain on hand. c. Furniture and fixtures are to be depreciated on a 5 d. The agency manager is to receive a bonus of 5% of all sales above P100,000 a month, the bonus to be paid by the home offi at quarterly intervals. Required: 1. Journalize the agency transactions on the books of the home office including adjusting entries and closing entries. 2. Prepare a statement summarizing agency activities for the month of July