Webster Corporation's monthly projected general and administrative expenses include $5,000 administrative salaries, $2,400 of other cash administrative expenses, $1,350 of depreciation expense on the administrative equipment, and 0.5% monthly interest on an outstanding bank loan of $10,000. Compute the total general and administrative expenses to be reported on the general and administrative expense budget per month.
A) $8,750.
B) $8,800.
C) $17,400.
D) $5,050.
E) $7,400.

Question

Quizplus · Accepted Answer

The total general and administrative expenses include administrative salaries ($5,000), other cash administrative expenses ($2,400), depreciation expense ($1,350), and interest on the bank loan (0.5% of $10,000 = $50). Adding these amounts gives $5,000 + $2,400 + $1,350 + $50 = $8,800.

Webster Corporation's Monthly Projected General and Administrative Expenses Include $5,000