Pythagoras Company must determine the December 31, 2021 year-end accruals for advertising and rent expenses. A P2,000 advertising bill was received on January 7, 2022. It related to costs of P1,500 for advertisements in December 2021 issues and P500 for advertisements in January 2, 2022 issues of the newspaper. A store lease effective December 16, 2020 calls for fixed rent of P4,800 per month payable 1 month from the effective date and monthly thereafter. In addition, rent equal to 5% of net sales over P1,200,000 per calendar year is payable on January 31 of the following year. Net sales for 2021 and 2020 were P2,200,000 and P1,500,000 respectively. In its December 31, 2021 statement of financial position, Pythagoras should report accrued liabilities of:
Pythagoras Company must determine the December 31, 2021 year-end accruals for advertising and rent expenses. A P2,000 advertising bill was received on January 7, 2022. It related to costs of P1,500 for advertisements in December 2021 issues and P500 for advertisements in January 2, 2022 issues of the newspaper. A store lease effective December 16, 2020 calls for fixed rent of P4,800 per month payable 1 month from the effective date and monthly thereafter. In addition, rent equal to 5% of net sales over P1,200,000 per calendar year is payable on January 31 of the following year. Net sales for 2021 and 2020 were P2,200,000 and P1,500,000 respectively. In its December 31, 2021 statement of financial position, Pythagoras should report accrued liabilities of:
Chapter1: Financial Statements And Business Decisions
Section: Chapter Questions
Problem 1Q
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Pythagoras Company must determine the December 31, 2021 year-end accruals for advertising and rent expenses. A P2,000 advertising bill was received on January 7, 2022. It related to costs of P1,500 for advertisements in December 2021 issues and P500 for advertisements in January 2, 2022 issues of the newspaper. A store lease effective December 16, 2020 calls for fixed rent of P4,800 per month payable 1 month from the effective date and monthly thereafter. In addition, rent equal to 5% of net sales over P1,200,000 per calendar year is payable on January 31 of the following year. Net sales for 2021 and 2020 were P2,200,000 and P1,500,000 respectively. In its December 31, 2021 statement of financial position , Pythagoras should report accrued liabilities of:
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