Jung Sa Ha Company must determine the December 31, 2020 year-end accruals for advertising and rent expenses. A P5,000 advertising bill was received January 7, 2021. It related to cost of P3,750 for advertisements in December 2020 issues and P1,250 for advertisements in January 2021 issues of the newspaper. A store lease, effective December 16, 2020 calls 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 January 31 of the following year. Net sales for 2020 were P5,500,000. In its December 31, 2020 balance sheet, Jung Sa Ha should report accrued liabilities of
Jung Sa Ha Company must determine the December 31, 2020 year-end accruals for advertising and rent expenses. A P5,000 advertising bill was received January 7, 2021. It related to cost of P3,750 for advertisements in December 2020 issues and P1,250 for advertisements in January 2021 issues of the newspaper. A store lease, effective December 16, 2020 calls 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 January 31 of the following year. Net sales for 2020 were P5,500,000. In its December 31, 2020 balance sheet, Jung Sa Ha should report accrued liabilities of
Chapter1: Financial Statements And Business Decisions
Section: Chapter Questions
Problem 1Q
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Transcribed Image Text:Jung Sa Ha Company must determine the December 31, 2020 year-end accruals for advertising and rent
expenses. A P5,000 advertising bill was received January 7, 2021. It related to cost of P3,750 for
advertisements in December 2020 issues and P1,250 for advertisements in January 2021 issues of the
newspaper. A store lease, effective December 16, 2020 calls 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 January 31 of the following year. Net sales for
2020 were P5,500,000. In its December 31, 2020 balance sheet, Jung Sa Ha should report accrued
liabilities of
A. P125,000
B. P128,750
C. P131,000
D. P134,750
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