Puge Co. is preparing its interim financial statements for the period ended March 31, 20x1. The following relate to the transactions during the first quarter: a. Total sales for the interim period was P2,000,000. b. Cost of sales was P800,000. c. Puge Co. is liable for 5% commission on its sales to its sales representatives and agents. No commission has yet been paid as of March 31, 20x1. d. The allowance for doubtful accounts has a balance of P10,000 as of January 1, 20x1. The required balance as of March 31, 20x1 is P30,000. There were no write-offs or recoveries during the period. e. A building with historical cost of P2,400,000 is being depreciated over 5 years using straight line method. f. Puge Co. prepaid a one-year insurance on its assets for P80,000 on January 1, 20x1. g. Property taxes for 20x1 amounting to P52,000 was paid in January. h. Advertising costs of P100,000 were incurred in February on promotional activities held on Valentine's Day. i Year-end staff bonuses are expected to be around P184,000. Employees become entitled to the bonuses as they provide services to Puge Co. during the year. į Puge Co.'s president is entitled to a 10% bonus on profit before bonus and taxes. k. Loss on sale of a used equipment on March 2, 20x1 was P60,000. I Puge Co. incurred P24,000 on unanticipated repairs on its factory equipment on March 16, 20x1. m. Due to the unexpected breakdown of the factory equipment on March 16, 20x1, Puge Co. has planned a major periodic overhaul of its other equipment to be held annually starting on December 31, 20x1. The cost of the major planned periodic overhaul is estimated at P96,000. n. Puge Co. leases one of its retail stores. Monthly rentals are P10,000; however, the lease contracts provide for a contingent rent equal to 2% of the excess of sales over P1,800,000. o. Puge Co.'s budget for 20x1 included charitable contributions of P58,000 and employee training costs of P26,000. None of those costs were incurred as of March 31, 20x1. p. Other operating expenses incurred during the first quarter totaled P240,000. Compute for the profit or loss for the first quarter ended March 31, 20x1.

Puge Co. is preparing its interim financial statements for the period ended March 31, 20x1. The following relate to the transactions during the first quarter: a. Total sales for the interim period was P2,000,000. b. Cost of sales was P800,000. c. Puge Co. is liable for 5% commission on its sales to its sales representatives and agents. No commission has yet been paid as of March 31, 20x1. d. The allowance for doubtful accounts has a balance of P10,000 as of January 1, 20x1. The required balance as of March 31, 20x1 is P30,000. There were no write-offs or recoveries during the period. e. A building with historical cost of P2,400,000 is being depreciated over 5 years using straight line method. f. Puge Co. prepaid a one-year insurance on its assets for P80,000 on January 1, 20x1. g. Property taxes for 20x1 amounting to P52,000 was paid in January. h. Advertising costs of P100,000 were incurred in February on promotional activities held on Valentine's Day. i Year-end staff bonuses are expected to be around P184,000. Employees become entitled to the bonuses as they provide services to Puge Co. during the year. į Puge Co.'s president is entitled to a 10% bonus on profit before bonus and taxes. k. Loss on sale of a used equipment on March 2, 20x1 was P60,000. I Puge Co. incurred P24,000 on unanticipated repairs on its factory equipment on March 16, 20x1. m. Due to the unexpected breakdown of the factory equipment on March 16, 20x1, Puge Co. has planned a major periodic overhaul of its other equipment to be held annually starting on December 31, 20x1. The cost of the major planned periodic overhaul is estimated at P96,000. n. Puge Co. leases one of its retail stores. Monthly rentals are P10,000; however, the lease contracts provide for a contingent rent equal to 2% of the excess of sales over P1,800,000. o. Puge Co.'s budget for 20x1 included charitable contributions of P58,000 and employee training costs of P26,000. None of those costs were incurred as of March 31, 20x1. p. Other operating expenses incurred during the first quarter totaled P240,000. Compute for the profit or loss for the first quarter ended March 31, 20x1.

Financial Accounting

15th Edition

ISBN:9781337272124

Author:Carl Warren, James M. Reeve, Jonathan Duchac

Publisher:Carl Warren, James M. Reeve, Jonathan Duchac

Chapter9: Receivables

Section: Chapter Questions

Problem 17E: Casebolt Company wrote off the following accounts receivable as uncollectible for the first year of...

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