on march 15 2017 barrel company paid property taxes On March

On March 15, 20X7, Barrel Company paid property taxes of $120,000 on its factory building for calendar year 207 on July 1, 20X7, Barrel made $20,000 in unanticipated repairs to its machinery The repairs will benefit operations for the remainder of the calendar year. What total amount of these expenses should be included in Barrel\'s quarterly income statement for the three months ended September 30, 20X7 Multiple Choice S40,000 35,000 $50000

Solution

The property taxes of $120000 have been paid for the entire year. Thus, a proportionate amount shall be included for the quarter ending 30th September 2017:

=$120000*3/12=$30000

Repairs of $20000 will be expensed out when they are incurred.

Thus, the total amount of expenses included in the quarterly income statement ended 30th September 2017 is $30000+$20000=$50000

Correct option is the third one.