An entity had the following transactions during the quarter ended March 31, 2018: • Advertising costs of P2 million were incurred on March 1, 2018. • Loss of P1 million from typhoon damage. • Payment of P400,000 fire insurance premium for calendar year 2018. • Staff bonuses are paid at year-end based on sales. Staff bonuses are expected to be around P20 million for the year; of that sum, P3 million would relate to the period ending March 31, 2018. The total amount to be recognized in the entity’s profit or loss for the period ended March 31, 2018 is: A. 6.4 million B. 6.1 million C. 8.1 million D. 8.4 million

An entity had the following transactions during the quarter ended March 31, 2018: • Advertising costs of P2 million were incurred on March 1, 2018. • Loss of P1 million from typhoon damage. • Payment of P400,000 fire insurance premium for calendar year 2018. • Staff bonuses are paid at year-end based on sales. Staff bonuses are expected to be around P20 million for the year; of that sum, P3 million would relate to the period ending March 31, 2018. The total amount to be recognized in the entity’s profit or loss for the period ended March 31, 2018 is: A. 6.4 million B. 6.1 million C. 8.1 million D. 8.4 million

Intermediate Accounting: Reporting And Analysis

3rd Edition

ISBN:9781337788281

Author:James M. Wahlen, Jefferson P. Jones, Donald Pagach

Publisher:James M. Wahlen, Jefferson P. Jones, Donald Pagach

Chapter9: Current Liabilities And Contingent Obligations

Section: Chapter Questions

Problem 3RE: Cee Co.s fiscal year begins April 1. At the beginning of its fiscal year, Cee Co. estimates that...

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Question

An entity had the following transactions during the quarter ended March 31, 2018:

• Advertising costs of P2 million were incurred on March 1, 2018.

• Loss of P1 million from typhoon damage.

• Payment of P400,000 fire insurance premium for calendar year 2018.

• Staff bonuses are paid at year-end based on sales. Staff bonuses are expected to be around P20 million for the year; of that sum, P3 million would relate to the period ending March 31, 2018.

The total amount to be recognized in the entity’s profit or loss for the period ended March 31, 2018 is:

A. 6.4 million

B. 6.1 million

C. 8.1 million

D. 8.4 million

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