These were billed at ₱70,000 of which of ₱40,000 was collected. The sales agency paid expenses of ₱5,800 but was reimbursed by the home office. On August 15, 2020, the sales agency samples were valued at ₱2,000. It was estimated that the gross profit on goods shipped to fill sales order averaged 40% of cost.
These were billed at ₱70,000 of which of ₱40,000 was collected. The sales agency paid expenses of ₱5,800 but was reimbursed by the home office. On August 15, 2020, the sales agency samples were valued at ₱2,000. It was estimated that the gross profit on goods shipped to fill sales order averaged 40% of cost.
Chapter1: Financial Statements And Business Decisions
Section: Chapter Questions
Problem 1Q
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Question
On February 14, 2020, Gerald Company established a sales agency in Secret Place.
Upon establishment of the sales agency, the home office sent samples costing ₱8,000
and a working fund of ₱3,000 to be maintained on the imprest basis. During the six
months period, the sales agency reported to the home office sales orders. These were
billed at ₱70,000 of which of ₱40,000 was collected. The sales agency paid expenses of
₱5,800 but was reimbursed by the home office.
On August 15, 2020, the sales agency samples were valued at ₱2,000. It was estimated
that the gross profit on goods shipped to fill sales order averaged 40% of cost.
The cost of sales of the sales agency for the six months period is:
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