ILLUSTRATION 1. Xerxes Department Store reported the following income and deductions during the period: Gross receipts (80% of revenue from commissions) P 4,000,000 Less Cost of services (90% paid and 10% accrued) 1.600.000 Gross income from operations P 2,500,000 Add Other income from operations - rentals (100% collected) 300.000 Total operating income P 2,800,000 Add: Non-operating income Gain on sale of machinery 300,000 Interest income on deposit, net 20,000 Dividend income from foreign corporation 30,000 Gain on sale of domestic stocks 60.000 Total gross income P 3,200,000 Less Ordinary deductions (80% paid and 20% accrued) 1,500,000 Special deductions 300,000 NOLCO from prior years 200,000 Net amount P_1.200.000 Required: Compute the OSD assuming that The accounting method employed /a Xerxes is a proprietorable Xerxes Is a corporation Cash basis Accrual basis 2. Classify the following expenses of a review center business a. Salaries of reviewers P 800,000 . Administrative staff salaries 80,000 c. Marketing salaries and other expenses 160,000 d. Rent expense on review rooms 300,000 0. Rent on administrative offices 100,000 f. Printing costs of reviewed handouts 100,000 g. Classroom & library electricity expense 30,000 h. Office utilities 40.000 1. Classroom supplies expense 5,000 Loss on sale of old chairs 15,000 K. Interest expense 50,000