show calculation 27. Baton Company estimates that the amounts for total deprecia

Question

show calculation

27. Baton Company estimates that the amounts for total depreciation expense for the year ending December 31 will be $120,000 and for year-end bonuses to employees will be $200,000. What total amount of expense relating to these two items should Baton report in its quarterly income statement for the three months ended March 31? d. $80,000 9d 29. In March of the current year, Mooney Company estimated its year-end executive bonuses to be $800,000. The executive bonus paid in the previous year was $950,000. What amount of bonus expense, if any, should Mooney recognize in determining net income for the first quarter of the current calendar year? d. $800,000

Explanation / Answer

Ans 27: Expenses should be recognised on the basis of accrual concept I.e. expenses are recognised in the period in which it is incurred and fixef ann ual eXpenses to be recognised proportionately.

So share of Depreciation to be recognised =120000×1/4=$30000

Share of bonus =200000×1/4=$50000

Total cost to be recognised=$(30000+50000)=$80000.

Ans 29: based on same concept as in ans 27, expenses to be recognised =800000×1/4=$200000

Related Questions

Navigate

• Browse (All)
• Browse S
• Subjects

---

---

Integrity-first tutoring: explanations and feedback only — we do not complete graded work. Learn more.