On March 15,20X7,Barrel Company paid property taxes of $120,000 on its factory building for calendar year 20X7.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?
A)$30,000
B)$35,000
C)$40,000
D)$50,000

Question

Quizplus · Accepted Answer

The property taxes paid in March are not relevant to the quarterly income statement for the three months ended September 30,20X7. Therefore, we will exclude it from the calculation. The repairs made in July are relevant and will benefit operations for the remainder of the year, which includes the quarter ended September 30, 20X7. Therefore, we will include the entire amount of $20,000 in the quarterly income statement. 
Total amount to be included in the quarterly income statement = $20,000 
Therefore, the answer is choice C.

On March 15,20X7,Barrel Company Paid Property Taxes of $120,000 on Its