BMC may claim the following expenses as part of regular itemized allowable deductions: Total operating cost of storage facility Excess Milk Bank expense subsidized by BMC P 360,000 P 90,000 P 450,000 Total BMC shall also claim an additional deduction for the same amount as special itemized allowable deductions.
BMC may claim the following expenses as part of regular itemized allowable deductions: Total operating cost of storage facility Excess Milk Bank expense subsidized by BMC P 360,000 P 90,000 P 450,000 Total BMC shall also claim an additional deduction for the same amount as special itemized allowable deductions.
Chapter1: Financial Statements And Business Decisions
Section: Chapter Questions
Problem 1Q
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Transcribed Image Text:Illustration 2
BMC may claim the following expenses as part of regular itemized allowable deductions:
Total operating cost of storage facility
Excess Milk Bank expense subsidized by BMC
P 360,000
P 90,000
P 450,000
Total
BMC shall also claim an additional deduction for the same amount as special itemized allowable deductions.
Transcribed Image Text:Illustration 2
Baguio Medical Center (BMC), a private hospital, previously set up a milk storage facility and a milk bank. The
total annual cost of the two facilities were:
Milk Bank
Storage facility
P 100,000
Total
P 220,000
300,000
P 120,000
Supplies
Staff Salaries
210,000
90,000
70,000
120,000
50,000
P 360.000
Maintenance
Total
P 280,000
P 640.000
190,000
Less: Fees collected from patients
Excess Expense
P 90,000
The milk bank was operated as an integral part of the hospital, but is operated as non-profit. BMC
charges minor fees and subsidizes the facility excess expense.
SLIDESMANIA COM
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