Problem 28-7 (IFRS)
Mount Company operates in the travel industry and incurs costs unevenly throughout the yeare
Advertising costs Of 2000 were 'incurred on March l, 2019 and staff bonuses are paid at yearend based on sales.
Staffyear-end bonuses are expected to be around P20,000,000 for the year.
What total amount of expenses should be included in the quarterly financial report ending March
31,2019?
a. 7,000,000
b. 5,500,000
c. 5,000,000
d. 3,500,000
Solution 28-7
Answer : a (2,000,000 + 5,000,000) = 7, 000,000
Advertising P2,000,000 is reported in the interim period when incurred.
Year-end bonuses are allocated over the entire year or P20,000,000 divided by four or
5,000,000 every quarter,