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On November​ 1, 2016, a company using accrual​ accounting, pays​$720,000 for a television advertising campaign. Commercials will run evenly over six months beginning on November​ 1, 2016. How much Advertising Expense will be reported on an income statement prepared for the year ended December​ 31, 2017?
A. ​$360,000
B. ​$240,000
C. ​$720,000
D. ​$480,000

Respuesta :

Answer:

correct option is D. ​$480,000

Explanation:

given data

pay​ for television advertising campaign = ​$720,000

solution

we know that here advertising expense report in 2016 for = 2 months

other reported in 2017 Income statement = 4 months

so here advertising Expense report for prepare income statement on December​ 31, 2017 will be as

advertising Expense  = $720000 ×  [tex]\frac{4}{6}[/tex]  

advertising Expense  = $480,000

so here correct option is D. ​$480,000

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