C is corrent. According to ASC Topic 270, costs should be charged to income in interim periods as they are incurred or allocated among the periods based upon estimated benefits received. Since both the property taxes and executive bonus benefit the entire calendar year, the $400,000 ($80,000 property taxes + $320,000 bonus) total expense should be allocated evenly among the four quarters.
A is incorrect. According to ASC Topic 270, costs should be charged to income in interim periods as they are incurred or allocated among the periods based upon estimated benefits received. Since both the property taxes and executive bonus benefit the entire calendar year, the $400,000 ($80,000 property taxes + $320,000 bonus) total expense should be allocated evenly among the four quarters.
A is incorrect. According to ASC Topic 270, costs should be charged to income in interim periods as they are incurred or allocated among the periods based upon estimated benefits received. Since both the property taxes and executive bonus benefit the entire calendar year, the $400,000 ($80,000 property taxes + $320,000 bonus) total expense should be allocated evenly among the four quarters.
D is incorrect. According to ASC Topic 270, costs should be charged to income in interim periods as they are incurred or allocated among the periods based upon estimated benefits received. Since both the property taxes and executive bonus benefit the entire calendar year, the $400,000 ($80,000 property taxes + $320,000 bonus) total expense should be allocated evenly among the four quarters.
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