Company must determine the December 31, 2020year-end accruals for advertising and rent expenses. A P5,000 advertising bill was received January7, 2021. It related to cost of P3,750 for advertisements in December 2020 issues and P1,250 for advertisements in January2021issues of the newspaper. A store lease, effective December 16, 2020c alls for fixed rent of P12,000 per month, payable one month from the effective date and monthly thereafter. In addition, rent equal to 5% of net sales over P3,000,000 per calendar year is payable on January31 of the following year. Net sales for 2020were P5,500,000. In its December31, 2020 balance sheet, company should report accrued liabilities of
Company must determine the December 31, 2020year-end accruals for advertising and rent expenses. A P5,000 advertising bill was received January7, 2021. It related to cost of P3,750 for advertisements in December 2020 issues and P1,250 for advertisements in January2021issues of the newspaper. A store lease, effective December 16, 2020c alls for fixed rent of P12,000 per month, payable one month from the effective date and monthly thereafter. In addition, rent equal to 5% of net sales over P3,000,000 per calendar year is payable on January31 of the following year. Net sales for 2020were P5,500,000. In its December31, 2020 balance sheet, company should report accrued liabilities of
Chapter1: Financial Statements And Business Decisions
Section: Chapter Questions
Problem 1Q
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Company must determine the December 31, 2020year-end accruals for advertising and rent expenses. A P5,000 advertising bill was received January7, 2021. It related to cost of P3,750 for advertisements in December 2020 issues and P1,250 for advertisements in January2021issues of the newspaper. A store lease, effective December 16, 2020c alls for fixed rent of P12,000 per month, payable one month from the effective date and monthly thereafter. In addition, rent equal to 5% of net sales over P3,000,000 per calendar year is payable on January31 of the following year. Net sales for 2020were P5,500,000. In its December31, 2020
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