Shields Company is preparing its interim report for the second quarter ending June 30. The following payments were made during the first two quarters:

Expenditure Date Amount
Annual advertising January $800,000
Property tax for the fiscal year February 350,000
Annual equipment repairs March 260,000
Extraordinary casualty loss April 185,000
Research and development May 96,000

For each expenditure indicate the amount that would be reported in the quarterly income statements for the periods ending March 31, June 30, September 30, and December 31.

Please help... I got advertising, prop tax and annual repairs right but can't figure out the last two: extraordinary and research . Thanks

I'm not an accountant but I'd imagine you divide the amount by how many months are left in the year then multiply that month expense by the number of month per quarter...

$185,000 / 8 = n

1st quarter X x

Quote:

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Originally Posted by mike 165278

I'm not an accountant but I'd imagine you divide the amount by how many months are left in the year then multiply that month expense by the number of month per quarter...

$185,000 / 8 = n



1st quarter X x

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Damn phone...

1st quarter $0 dollars

Since April is that start of the 2nd quarter, quarters 2, 3, and 4 should be the same.

For the one in may, 1st would be zero. 2nd would be n x 2, 3rd and 4th would be n x 3. ( $69,000 / 7 = n ).

I think I'm right, but won't guarantee your homework is correct.

He's right he is not an accountant
The extraordinary loss would be reported immediately. The only question regarding research is whether it is to be capitalised. I would expect it would be and so it would be amortised over the expected life of the product

Eh, sorry. I tried!

I was using election year math... :)

Definitely not relevant to accounting which deals with facts