on november 1, 2024, a company using accrual accounting, pays $660,000 for a television advertising…

on november 1, 2024, a company using accrual accounting, pays $660,000 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?\na. $330,000\nb. $220,000\nc. $660,000\nd. $440,000

on november 1, 2024, a company using accrual accounting, pays $660,000 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?\na. $330,000\nb. $220,000\nc. $660,000\nd. $440,000

Answer

Explanation:

Step1: Calculate monthly expense

Total cost = $660,000, duration = 6 months. Monthly expense = $\frac{660000}{6}= 110000$

Step2: Calculate expense for 2025

Campaign runs from November 2024 - April 2025. Months in 2025: 4 (January - April) Expense in 2025 = $110000\times4 = 440000$

Answer:

D. $440,000