The following items were among those that were reported on A Company’s income statement: Legal and audit fees P2,000,000 Rent for office space 6,000,000 Interest on acceptances payable 1,000,000 Loss on abandoned equipment 500,000 Insurance 200,000 The office space is used equally by the sales and accounting departments. What amount should be classified as general and administrative expenses?
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The following items were among those that were reported on A Company’s income statement:
|
Legal and audit fees |
P2,000,000 |
|
Rent for office space |
6,000,000 |
|
Interest on acceptances payable |
1,000,000 |
|
Loss on abandoned equipment |
500,000 |
|
Insurance |
200,000 |
The office space is used equally by the sales and accounting departments. What amount should be classified as general and administrative expenses?
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- Analyzing the Accounts The controller for Summit Sales Inc. provides the following information on transactions that occurred during the year: a. Purchased supplies on credit, $18,600 b. Paid $14,800 cash toward the purchase in Transaction a c. Provided services to customers on credit1 $46,925 d. Collected $39,650 cash from accounts receivable e. Recorded depreciation expense, $8,175 f. Employee salaries accrued, $15,650 g. Paid $15,650 cash to employees for salaries earned h. Accrued interest expense on long-term debt, $1,950 i. Paid a total of $25,000 on long-term debt, which includes $1.950 interest from Transaction h j. Paid $2,220 cash for l years insurance coverage in advance k. Recognized insurance expense, $1,340, that was paid in a previous period l. Sold equipment with a book value of $7,500 for $7,500 cash m. Declared cash dividend, $12,000 n. Paid cash dividend declared in Transaction m o. Purchased new equipment for $28,300 cash. p. Issued common stock for $60,000 cash q. Used $10,700 of supplies to produce revenues Summit Sales uses the indirect method to prepare its statement of cash flows. Required: 1. Construct a table similar to the one shown at the top of the next page. Analyze each transaction and indicate its effect on the fundamental accounting equation. If the transaction increases a financial statement element, write the amount of the increase preceded by a plus sign (+) in the appropriate column. If the transaction decreases a financial statement element, write the amount of the decrease preceded by a minus sign (-) in the appropriate column. 2. Indicate whether each transaction results in a cash inflow or a cash outflow in the Effect on Cash Flows column. If the transaction has no effect on cash flow, then indicate this by placing none in the Effect on Cash Flows column. 3. For each transaction that affected cash flows, indicate whether the cash flow would be classified as a cash flow from operating activities, cash flow from investing activities, or cash flow from financing activities. If there is no effect on cash flows, indicate this as a non-cash activity.Discuss how each of the following transactions will affect assets, liabilities, and stockholders equity, and prove the companys accounts will still be in balance. A. A company purchased $450 worth of office supplies on credit. B. The company parking lot was plowed after a blizzard. A check for $75 was given to the plow truck operator. C. $250 was paid on account. D. A customer paid $350 on account. E. Provided services for a customer, $500. The customer asked to be billed.Analyzing Transactions. Using the analytical framework, indicate the effect of the following related transactions of a firm. a. January 1: Issued 10,000 shares of common stock for 50,000. b. January 1: Acquired a building costing 35,000, paying 5,000 in cash and borrowing the remainder from a bank. c. During the year: Acquired inventory costing 40,000 on account from various suppliers. d. During the year: Sold inventory costing 30,000 for 65,000 on account. e. During the year: Paid employees 15,000 as compensation for services rendered during the year. f. During the year: Collected 45,000 from customers related to sales on account. g. During the year: Paid merchandise suppliers 28,000 related to purchases on account. h. December 31: Recognized depreciation on the building of 7,000 for financial reporting. Depreciation expense for income tax purposes was 10,000. i. December 31: Recognized compensation for services rendered during the last week in December but not paid by year-end of 4,000. j. December 31: Recognized and paid interest on the bank loan in Part b of 2,400 for the year. k. Recognized income taxes on the net effect of the preceding transactions at an income tax rate of 40%. Assume that the firm pays cash immediately for any taxes currently due to the government.
- Krespy Corp. has a cash balance of $7,500 before the following transactions occur: A. received customer payments of $965 B. supplies purchased on account $435 C. services worth $850 performed, 25% is paid in cash the rest will be billed D. corporation pays $275 for an ad in the newspaper E. bill is received for electricity used $235. F. dividends of $2,500 are distributed What is the balance in cash after these transactions are journalized and posted?The following items were among those that were reported on Cotabato Company’s income statement: Legal and audit fees P2,000,000 Rent for office space 6,000,000 Interest on acceptances payable 1,000,000 Loss on abandoned equipment 500,000 Insurance 200,000 The office space is used equally by the sales and accounting departments. What amount should be classified as general and administrative expenses?An entity reported the following data for the current year: Legal and audit fees 1,700,000Rent for office space 2,400,000Advertising 500,000Interest on inventory loan 2,100,000Loss on abandoned data processing equipment 350,000Freight in 1,750,000Freight out 1,600,000Officers` Salaries 1,500,000Insurance 850,000Sales representative salaries 2,150,000Research and development expense 1,000,000The office space is used equally by the sales and accounting departments. Question 1: What amount should be classified as general and administrative expenses?a. 5,250,000 c. 5,600,000b. 6,450,000 d. 6,250,000Question 2: What amount should be reported as selling expense?a. 5,450,000 c. 6,300,000b. 4,250,000 d. 6,450,000
- PlantTita Company reported the following data for the current year: Legal and audit fees P10,000Rent for office space equally shared by sales and accounting 150,000Transportation out 20,000Officer’s salaries 80,000Insurance 5,000Sales representative salaries 80,000Transportation in 15,000Doubtful accounts 2,000Loss on sale of trading investments 10,000Advertising expenses 50,000Office supplies used 8,000 16. What amount should be classified as administrative expenses?a. P190,000b. P180,000c. P200,000d. P195,000 17. What amount should be classified as distribution expenses?a. P300,000b. P235,000c. P220,000d. P225,000A Corporation reports operating expenses in two categories: (1) Cost of goods sold, (2) selling and (3) general and administrative. The adjusted trial balance included the following expense and loss accounts: Interest 7,000Advertising 40,000Freight-out 5,000Insurance expense 6,000Loss on sale of long-term investment 20,000Officers’ salaries 125,000Net purchases 50,000Increase in the merchandise inventory 20,000Rent for office space 180,000Accounting and legal fees 130,000 Office supplies 15,000Sales salaries and commissions 150,000 One-third of the rented premises is occupied by the sales department. [Q5]: Determine the total amount of (15) cost of goods sold, (16) selling expenses, (17) general administrative expenses and (18) other expenses on December 31, 2021.Given the following, how much is total administrative expenses? Advertising Expense: ₱20,000 Depreciation Expense – Office Equipment: ₱29,041 Depreciation Expense – Store Furniture and Fixtures: ₱15,015 Store Supplies Expense: ₱4,480 Office Salaries and Wages Expense: ₱124,886 Office Utilities Expense: ₱35,753
- Using only the following information, prepare the balance sheet for company “E”. Accounts receivable 27,000 Accounts payable 45,000 Supplies 3,000Accumulated amortization Building 23,000 Owner’s Equity 75,000 Cash 5,000 Inventory 12,000 Salaries payable 24,000 Building 150,000 Unearned sales revenue 30,000The following financial information is from Cook Company: Accounts Payable $ 55,000 Land $ 90,000 Inventory $ 10,500 Accounts Receivable $ 7,500 Equipment $ 8,000 Deferred Revenue $ 58,500 Short-Term Investments $ 20,000 Notes Receivable (due in 8 months) $ 45,500 Interest Payable $ 2,000 Patents $ 75,000 What is the total amount of property, plant, and equipment assuming the accounts above reflect normal activity?Jameson Consultants, Inc., provides marketing research for clients in the retail industry. The company had the following unadjusted balances at the end of the current year: Depreciation Expense 8,800 Accumulated Depreciation 19,700 Salaries Payable 28,050 Cash 157,000 Supplies Expenses 22,650 Supplies 13,000 Salaries Expense 1,690,000 Prepaid Expenses 11,000 Interest Expense 18,000 Accounts Receivable 229,400 Consulting Fees Revenue 2,604,200 Retained Earnings ? Income Taxes Payable 3,190 Travel Expense 25,590 Buildings and Equipment 631,040 Utilities Expense 27,630 Gain on Sale of Land 6,800 Unearned Consulting Fees 34,900 Investment Income 11,600 Accounts Payable 100,830 Land 66,400…
