Professional Documents
Culture Documents
FATUOUS SILLY Co. is preparing its interim financial statements for the period ended March 31, 20x1.
The following relate to the transactions during the first quarter:
c. FATUOUS is liable for 5% commission on its sales to its sales representatives and agents. No
commission has yet been paid as of March 31, 20x1.
d. The allowance for doubtful accounts has a balance of ₱10,000 as of January 1, 20x1. The required
balance as of March 31, 20x1 is ₱30,000. There were no write-offs or recoveries during the period. e. A
building with historical cost of ₱2,400,000 is being depreciated over 5 years using straight line method. f.
FATUOUS prepaid a one-year insurance on its assets for ₱80,000 on January 1, 20x1,.
h. Advertising costs of ₱100,000 were incurred in February on promotional activities held on Valentine’s
Day. i. Year-end staff bonuses are expected to be around ₱184,000. Employees become entitled to the
bonuses as they provide services to FATUOUS during the year.
j. FATUOUS’s president is entitled to a 10% bonus on profit before bonus and taxes.
l. FATUOUS incurred ₱24,000 on unanticipated repairs on its factory equipment on March 16, 20x1. m.
Due to the unexpected breakdown of the factory equipment on March 16, 20x1, FATUOUS has planned
a major periodic overhaul of its other equipment to be held annually starting on December 31, 20x1.
The cost of the major planned periodic overhaul is estimated at ₱96,000.