On December 31, 2021, Sad Inc. had a P3,000,000 balance in advertising expense account before any year-end adjustments.Radio and television advertising spots broadcast during December 2021 were billed to Happy on January 5, 2022. The invoice cost of P400,000 was paid on January 20, 2022.Included in the P3,000,000 is P600,000 for newspaper advertising for January 2022 sales promotional campaign.What amount should be reported as advertising expense for 2021?A. 1,400,000B. 1,500,000C. 2,800,000D. 1,700,000

The accrual basis accounting records the revenue and expenses in the period they are incurred.

Answered: On December 31, 2021, Sad Inc. had a…

FINANCIAL ACCOUNTING

10th Edition

ISBN:9781259964947

Author:Libby

Publisher:Libby

Chapter1: Financial Statements And Business Decisions

Section: Chapter Questions

Problem 1Q

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On December 31, 2021, Sad Inc. had a P3,000,000 balance in advertising expense account before any year-end adjustments.

Radio and television advertising spots broadcast during December 2021 were billed to Happy on January 5, 2022. The invoice cost of P400,000 was paid on January 20, 2022.
Included in the P3,000,000 is P600,000 for newspaper advertising for January 2022 sales promotional campaign.

What amount should be reported as advertising expense for 2021?

A. 1,400,000
B. 1,500,000
C. 2,800,000
D. 1,700,000

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