The following items were among those reported on Lee Co.'s Income Statement for the year ended December 31, 20x5:

Legal and audit fees $170,000

Rent for office space 240,000

Interest on inventory floor plan 210,000

Loss on abandoned data processing

equipment used in operations 35,000

The office space is used equally by Lee's sales and accounting departments. What amount of the above-listed items should be classified as general and administrative expenses in Lee's multiple-step Income Statement?

a) $290,000

b) $325,000

c) $410,000

d) $500,000

Question

Business

Quinn Gordon

30 May, 13:32

The following items were among those reported on Lee Co.'s Income Statement for the year ended December 31, 20x5:

Legal and audit fees $170,000

Rent for office space 240,000

Interest on inventory floor plan 210,000

Loss on abandoned data processing

equipment used in operations 35,000

The office space is used equally by Lee's sales and accounting departments. What amount of the above-listed items should be classified as general and administrative expenses in Lee's multiple-step Income Statement?

a) $290,000

b) $325,000

c) $410,000

d) $500,000

+3

Answers (1)

Know the Answer?

Louis Barron · Answer 1

C. $410,000

Explanation:

Administrative and general expenses in Lee's multiple - step income statement is $410,000

i. e the Legal and audit fees $170,000 and Rent for office space $240,000 which will amount to $410,000

Note: General and Administrative expenses are incurred in the day-to-day operations of a business and are not tied to a specific function or department within the organisation.