In January 2014, Cain Company paid $200,000 in property taxes on its plant for the calendar year 2014.Also in January 2014, Cain estimated that its year-end bonuses to executives for 2014 would be $800,000.What is the amount of expenses related to these two items that should be reflected in Cain's quarterly income statement for the three months ended June 30, 2014 (second quarter)?
A)$ -0-
B)$250,000
C)$ 50,000
D)$200,000

Question

Quizplus · Accepted Answer

The property taxes of $200,000 and estimated bonuses of $800,000 should be allocated evenly over the year. For the second quarter, 1/4 of the annual expenses should be recognized: ($200,000 + $800,000) / 4 = $250,000.

In January 2014, Cain Company Paid $200,000 in Property Taxes