1: Meyer Corp. reports operating expenses in two categories: (1) selling and (2) general and administrative. The adjusted trial balance at December 31, 2018, included the following expense accounts: Accounting and legal fees P 140,000 Advertising 120,000 Freight-out 75,000 Interest 60,000 Loss on sale of long-term investments 30,000 Officers' salaries 180,000 Rent for office space 180,000 Sales salaries and commissions 110,000 One-half of the rented premises is occupied by the sales department. 1. How much of the expenses listed above should be included in Meyer's selling expenses for 2018? a. P230,000. b. P305,000. c. P320,000. d. P395,000. 2. How much of the expenses listed above should be included in Meyer's general and administrative expenses for 2018? a. P410,000. b. P440,000. c. P470,000. d. P500,000. Problem 2: Bowen Corp. reports operating expenses in two categories: (1) selling and (2) general and administrative. The adjusted trial balance at December 31, 2018 included the following expense and loss accounts: Accounting and legal fees P 140,000 Advertising 180,000 Freight-out 80,000 Interest 70,000 Loss on sale of long-term investment 30,000 Officers' salaries 225,000 Rent for office space 220,000 Sales salaries and commissions 170,000 One-half of the rented premises is occupied by the sales department. 3. Bowen's total selling expenses for 2018 are a. P540,000. b. P460,000. c. P430,000. d. P370,000. Problem 3: The following items were among those that were reported on Nen Co.'s income statement for the year ended December 31, 2018: Legal and audit fees P 130,000 Rent for office space 180,000 Interest on inventory floor plan 210,000 Loss on abandoned equipment used in operations 35,000 The office space is used equally by Nen's sales and accounting departments. 4. What amount of the above-listed items should be classified as general and administrative expenses in Nen's multiple-step income statement? a. P220,000. b. P255,000. c. P310,000. d. P430,000. Problem 4: The following trial balance of Scott Corp. at December 31, 2018 has been properly adjusted except for the income tax expense adjustment. Scott Corp. Trial Balance December 31, 2018 Dr. Cr. Cash P 775,000 Accounts receivable (net) 2,695,000 Inventory 2,085,000 Property, plant, and equipment (net) 7,366,000 Accounts payable and accrued liabilities P 1,701,000 Income taxes payable 654,000 Deferred income tax liability 85,000 Common stock 2,350,000 Additional paid-in capital 3,680,000 Retained earnings, 1/1/08 3,450,000 Net sales and other revenues 13,360,000 Costs and expenses 11,180,000 Income tax expenses 1,179,000 P25,280,000 P25,280,000 Other financial data for the year ended December 31, 2018: Included in accounts receivable is P1,200,000 due from a customer and payable in quarterly installments of P150,000. The last payment is due December 29, 2009. The balance in the Deferred Income Tax Liability account pertains to a temporary difference that arose in a prior year, of which P20,000 is classified as a current liability. During the year, estimated tax payments of P525,000 were charged to income tax expense. The current and future tax rate on all types of income is 30%. In Scott's December 31, 2018 balance sheet, 5. The current assets total is a. P6,080,000. b. P5,555,000. c. P5,405,000. d. P4,955,000. 6. The current liabilities total is a. P1,850,000. b. P1,915,000. c. P2,375,000. d. P2,440,000. 7. The final retained earnings balance is a. P4,451,000. b. P4,536,000. c. P4,976,000. d. P4,905,000