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?
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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?
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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.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?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. P225,000
- 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. 6,450,000A 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?ABASE HUMILIATE Co. is currently preparing its combined financial statements for the year ended December 31, 20x1. As of this date, the “Investment in branch” account has a balance of ₱380,000 while the “Home office” account has a balance of ₱528,000. The following information has been gathered: (a) The home office allocated unpaid utilities expenses amounting to ₱40,000 to the branch which the branch did not record in full. Instead, the branch sent a wrong adjusting memo to the home office reducing the charge by ₱10,000 and setting up a liability for the remaining amount. (b) The home office erroneously credited the branch for a return of shipment of merchandise worth ₱100,000. The branch did not make any return of merchandise. (c) The branch mistakenly received a copy of the home office correcting entry for item (b) above dated January 3, 20x2 and entered a credit in favor of the home office on December 31, 20x1. (d) The branch mistakenly sent the home…
- ABASE HUMILIATE Co. is currently preparing its combined financial statements for the year ended December 31, 20x1. As of this date, the “Investment in branch” account has a balance of ₱380,000 while the “Home office” account has a balance of ₱528,000. The following information has been gathered: (a) The home office allocated unpaid utilities expenses amounting to ₱40,000 to the branch which the branch did not record in full. Instead, the branch sent a wrong adjusting memo to the home office reducing the charge by ₱10,000 and setting up a liability for the remaining amount. (b) The home office erroneously credited the branch for a return of shipment of merchandise worth ₱100,000. The branch did not make any return of merchandise. (c) The branch mistakenly received a copy of the home office correcting entry for item (b) above dated January 3, 20x2 and entered a credit in favor of the home office on December 31, 20x1. (d) The branch mistakenly sent the home…ABASE HUMILIATE Co. is currently preparing its combined financial statements for the year ended December 31, 20x1. As of this date, the “Investment in branch” account has a balance of ₱380,000 while the “Home office” account has a balance of ₱528,000. The following information has been gathered:(a) The home office allocated unpaid utilities expenses amounting to ₱40,000 to the branch which the branch did not record in full. Instead, the branch sent a wrong adjusting memo to the home office reducing the charge by ₱10,000 and setting up a liability for the remaining amount.(b) The home office erroneously credited the branch for a return of shipment of merchandise worth ₱100,000. The branch did not make any return of merchandise.(c) The branch mistakenly received a copy of the home office correcting entry for item (b) above dated January 3, 20x2 and entered a credit in favor of the home office on December 31, 20x1.(d) The branch mistakenly sent the home office a debit memo…Use the following information for the next two questions:The records of Afternoon Sun Co. show the following information: Interest expense ₱24,000Cost of inventories sold 600,000Insurance expense 100,000Advertising expense 20,000Freight-out 10,000Freight-in 4,000Loss on sale of equipment 2,000Legal and other professional fees 12,000Rent expense (one-half occupied by sales department 8,000Sales commission expense 14,000Doubtful accounts expense 16,000 a. How much is the total distribution (selling) costs? b. How much is the total administrative expenses?