Iincome Statement-Part 1 - 2nd Flr, GF Partners Bldg, 139...

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2 nd Flr, GF Partners Bldg, 139 H.V. dela Costa, Salcedo Village, Makati City 3 rd Flr. Equitable PCI Building, 2070 Claro M. Recto ,Manila Tel.7348895/7349198 Practical Accounting 1 Prof. Rommel M. Valdez Income Statement – Part I 1. The following items were among those that were reported on Cyprus Co.’s income statement for the year ended December 31, 2004: Legal and audit fees P170,000 Rent for office space 240,000 Interest on acceptances payable 210,000 Loss on abandoned data processing equipment used in operations 35,000 The office space is used equally by Cyprus’ sales and accounting departments. What amount of the above items should be classified as general and administrative expenses in Cyprus’ income statement? a. P500,000 c. P410,000 b. P290,000 d. P325,000 2. Information concerning the first month of operations of Avon is presented below. (The periodic inventory system is used.) Transportation-in P 760 Total purchases on account 22,200 Purchase returns on account 700 Transportation-out 810 Total recorded as cash purchases 9,140 Purchase allowances on account 1,350 Inventory at the end of the month 4,800 Sales discounts 750 Refunds for defective items purchased for cash 400 Error made by bookkeeper debiting supplies expense for cash purchase of merchandise 790 The correct cost of goods sold is a. P16,110 b. P24,890 c. P25,640 d. P26,450 3. The Do It Corporation presented the following income statement and statement of retained earnings for the year ended December 31, 2004 as developed by its bookkeeper who has completed 12 units of accounting. Do It Corporation Revenue Statement December 31, 2004 Net sales P 390,000 Less: Dividends declared (P3.50 per common shares) 15,000 Revenues P 375,000 Less: Selling expenses 41,600 Gross profit P333,400 Less: Operating expenses Interest expense 8,200 Cost of goods sold
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Iincome Statement-Part 1 - 2nd Flr, GF Partners Bldg, 139...

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