Now, after year X-1, we have already used this prepaid rent. Remember that at the end of year X-0, in the preparational period, we prepaid the rent for the next year, for the full year X-1. Let's consider now the cost of renting the premises. So profitability and liquidity many times are different, because there is a mismatch in time between the expense and the payments, or the revenue and the cash collection. But remember, that this is not always the case. So in this particular transaction, liquidity and profitability are the same. Second question, are we more liquid or less liquid? Clearly less liquid, because cash has decreased as well. After this transaction, are we richer or poorer? Poorer, right? Because the net worth of the shareholders has decreased, we have an expense. And they are going to decrease the profit and loss account. It has to do with things that Kathleen consumed in the past, therefore you recognize them as expenses. So it looks like all these costs of the campus bookstore do not generate the future value, a future benefit. And second the utilities have already been consumed, used the water, the electricity. So Christina has already worked for the company for this past year. So both things had already consumed basically. Now my next question is, okay we are paying some cash and what else we need to recognize here? An asset or an expense? We are talking here about Christina's salary on the one hand and now some of the utilities. So how would you account for these? Obviously first, cash is going to decrease. The total amount of sale in general and administrative expenses is 30,000 Euros. Let us start first with the sale in general administrative costs. So now in this period we're going to take care of the Basically the use, the consumption of this prepaid rent. Remember that we prepaid the rent in the previous period. We're also going to talk about another cost that we have in this business, which is the Rent Expense. And so next we are going to account for them. We have grouped all of these costs under Selling, General and Administrative Expenses. And costs of utilities, water, electricity. We are referring here to the salary of Christina, who is the only person working in the store. The campus bookstore, incurring a few operating costs in year x one.
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