In January 2017, Cain Company paid $200,000 in property taxes on its plant for the calendar year 2017. Also in January 2017, Cain estimated that its year-end bonuses to executives for 2017 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, 2017 (second quarter)?
A) $ -0-
B) $250,000
C) $ 50,000
D) $200,000

Question

Quizplus · Accepted Answer

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

In January 2017, Cain Company Paid $200,000 in Property Taxes