On June 1, 2013, COG Company in Baguio established a sales agency in La Trinidad, Benguet. Upon the establishment of the sales agency, the home office sent merchandise samples costing P8,000 and a cash working fund of P3,000 to be maintained on the imprest basis. During the month of June, the sales agency reported to the home office sales orders. These were billed at P70,000, of which P40,000 was collected. The sales agency paid expenses of P2,800 but was reimbursed by the home office. On June 30, 2013, the sales agency samples were valued at P6,000. It was estimated that the gross profit on goods shipped to fill sales agency sales orders averaged 40% of cost. What is the net income of the sales agency for the month of June 30, 2013?
Master Budget
A master budget can be defined as an estimation of the revenue earned or expenses incurred over a specified period of time in the future and it is generally prepared on a periodic basis which can be either monthly, quarterly, half-yearly, or annually. It helps a business, an organization, or even an individual to manage the money effectively. A budget also helps in monitoring the performance of the people in the organization and helps in better decision-making.
Sales Budget and Selling
A budget is a financial plan designed by an undertaking for a definite period in future which acts as a major contributor towards enhancing the financial success of the business undertaking. The budget generally takes into account both current and future income and expenses.
On June 1, 2013, COG Company in Baguio established a sales agency in La Trinidad, Benguet.
Upon the establishment of the sales agency, the home office sent merchandise samples costing
P8,000 and a cash working fund of P3,000 to be maintained on the imprest basis.
During the month of June, the sales agency reported to the home office sales orders. These were
billed at P70,000, of which P40,000 was collected. The sales agency paid expenses of P2,800 but was
reimbursed by the home office. On June 30, 2013, the sales agency samples were valued at P6,000.
It was estimated that the gross profit on goods shipped to fill sales agency sales orders averaged
40% of cost.
What is the net income of the sales agency for the month of June 30, 2013?
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