A is corrent. The accounting and legal fees ($160,000) and the portion of office rent not allocable to sales (3/4 x $200,000 = $150,000) are all considered general and administrative expenses. Therefore, general and administrative expense should be $310,000 ($160,000 + $150,000). In addition, the interest expense ($60,000) would be included with financial expense or other expenses. The $25,000 loss on the sale of office equipment should be included in other expenses and losses. The office rent for the sales department (1/4 x $200,000 = $50,000) is an operating expense and included in selling expenses rather than general and administrative expenses.
B is incorrect. The accounting and legal fees ($160,000) and the portion of office rent not allocable to sales (3/4 x $200,000 = $150,000) are all considered general and administrative expenses. Therefore, general and administrative expense should be $310,000 ($160,000 + $150,000). In addition, the interest expense ($60,000) would be included with financial expense or other expenses. The $25,000 loss on the sale of office equipment should be included in other expenses and losses. The office rent for the sales department (1/4 x $200,000 = $50,000) is an operating expense and included in selling expenses rather than general and administrative expenses.
B is incorrect. The accounting and legal fees ($160,000) and the portion of office rent not allocable to sales (3/4 x $200,000 = $150,000) are all considered general and administrative expenses. Therefore, general and administrative expense should be $310,000 ($160,000 + $150,000). In addition, the interest expense ($60,000) would be included with financial expense or other expenses. The $25,000 loss on the sale of office equipment should be included in other expenses and losses. The office rent for the sales department (1/4 x $200,000 = $50,000) is an operating expense and included in selling expenses rather than general and administrative expenses.
D is incorrect. The accounting and legal fees ($160,000) and the portion of office rent not allocable to sales (3/4 x $200,000 = $150,000) are all considered general and administrative expenses. Therefore, general and administrative expense should be $310,000 ($160,000 + $150,000). In addition, the interest expense ($60,000) would be included with financial expense or other expenses. The $25,000 loss on the sale of office equipment should be included in other expenses and losses. The office rent for the sales department (1/4 x $200,000 = $50,000) is an operating expense and included in selling expenses rather than general and administrative expenses.
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