on november 1, 2024, a company using accrual accounting, pays $1,020,000 for a television advertising…

on november 1, 2024, a company using accrual accounting, pays $1,020,000 for a television advertising campaign. commercials will run evenly over six months beginning on november 1, 2024. how much advertising expense will be reported on an income statement prepared for the year ended december 31, 2025?\n\na. $680,000\nb. $1,020,000\nc. $340,000\nd. $510,000

on november 1, 2024, a company using accrual accounting, pays $1,020,000 for a television advertising campaign. commercials will run evenly over six months beginning on november 1, 2024. how much advertising expense will be reported on an income statement prepared for the year ended december 31, 2025?\n\na. $680,000\nb. $1,020,000\nc. $340,000\nd. $510,000

Answer

Explanation:

Step1: Calculate monthly advertising expense

The total cost is $1,020,000 for 6 months. So the monthly expense is $\frac{1020000}{6}=170000$.

Step2: Determine the number of months in 2025

The campaign runs from November 1, 2024 - April 30, 2025. In 2025, it runs for 4 months (January - April).

Step3: Calculate advertising expense for 2025

Multiply monthly expense by number of months in 2025: $170000\times4 = 680000$.

Answer:

A. $680,000