Just a Rant

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    Topic
  • #197486
    Hammer
    Participant

    These types of questions piss me off…

    Dana Co.’s officers’ compensation expense account had a balance of $224,000 at December 31, Year 1, before any appropriate year-end adjustment relating to the following:

    No salary accrual was made for December 30-31, Year 1. Salaries for the two-day period totaled $3,500.

    Year 1 officers’ bonuses of $62,500 were paid on January 31, Year 2.

    In its Year 1 income statement, what amount should Dana report as officers’ compensation expense?

    a.

    $286,500

    b.

    $227,500

    c.

    $224,000

    d.

    $290,000

    The second fact provided doesn’t indicate whether or not bonuses were accrued for in the unadjusted compensation expense balance. The first fact does, so, one would naturally assume since no disclosure was made about the second fact, they are already accounted for…

    FAR - 70, 81
    AUD - 83
    BEC - 77
    REG - 70, 78

    Licensed in Ohio.

    Now what the hell do I do?

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