Question

Brock Corp. reports operating expenses in two categories: (1) selling and (2) general and administrative. The adjusted trial balance at December 31, 20 x 5 included the following expense and loss accounts: Accounting and legal fees $120,000, Advertising 150,000, Freight-out 80,000, Interest 70,000, Loss on the sale of long-term investments 30,000, Officers' salaries 225,000, Rent for office space 220,000, Sales salaries and commissions 140,000. One-half of the rented premises is occupied by the sales department. Brock's total selling expenses for 20 x 5 are:________.
A. $480,000
B. $400,000
C. $370,000
D. $360,000

Answer 1

Answer:

correct answer is A. $480,000

Explanation:

given data

Accounting and legal fees =  $120,000

Advertising = 150,000

Freight-out = 80,000

Interest = 70,000

Loss on the sale of long-term investments = 30,000

Officers' salaries = 225,000

Rent for office space = 220,000

Sales salaries and commissions = 140,000

solution

as here Rent for office space is

Rent for office space = $220,000 × 0.50

here 0.5 the rent is include in sell expense because sales department occupy only 0.5  premises

Rent for office space = $110,000  

we get here total selling expenses that is

total selling expenses = Advertising + Freight-out + Rent for office space + Sales salaries and commissions

total selling expenses = $150,000  + 80,000  + 110,000  + 140,000  

total selling expenses = $480,000

so correct answer is A. $480,000