Ask Question
25 June, 06:37

On January 16, Tree Co. paid $60,000 in property taxes on its factory for the current calendar year. On April 2, Tree paid $240,000 for unanticipated major repairs to its factory equipment. The repairs will benefit operations for the remainder of the calendar year.

What amount of these expenses should Tree include in its third-quarter interim financial statements for the 3 months ended September 30?

A. $95,000 B. $75,000 C. $0 D. $15,000

+4
Answers (1)
  1. 25 June, 09:25
    0
    A. $95,000

    Explanation:

    60,000 will be property taxes for an entire year

    we just need to calcualte expense from July to September thus:

    60,000 x 3 months / 12 months = 15,000

    The repairs are also distributed among the periods to not put the entire weight in a month or quarter:

    240,000 x 3 / 9 months outstanding = 80,000

    total amount of expenses for the period July - September:

    15,000 property tax expense + 80,000 repair expense = 95,000
Know the Answer?
Not Sure About the Answer?
Get an answer to your question ✅ “On January 16, Tree Co. paid $60,000 in property taxes on its factory for the current calendar year. On April 2, Tree paid $240,000 for ...” in 📙 Business if there is no answer or all answers are wrong, use a search bar and try to find the answer among similar questions.
Search for Other Answers