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Kemp Co . must determine the December 3 1 , 2 0 X 2 , year - end accruals for advertising and rent expenses. A

Kemp Co. must determine the December 31,20X2, year-end accruals for advertising and rent expenses. A bill for $500 in advertising expenses was received January 7,20X3, comprising costs of $375 for advertisements in December 20X2 issues, and $125 for advertisements in January 20X3 issues of the newspaper.
A store lease, effective December 16,20X1, calls for fixed rent of $1,200 per month, payable one month from the effective date and monthly thereafter. In addition, rent equal to 5% of net sales over $300,000 per calendar year is payable on January 31 of the following year. Net sales for 20X2 were $550,000.
In its December 31,20X2 balance sheet, Kemp should report accrued liabilities of
a. $12,875
b. $13,000
c. $13,100
d. $13,475

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