Question

Baton Company estimates that the amounts for total depreciation expense for the year ending December 31 will be $120,000 and for year-end bonuses to employees will be $200,000. What total amount of expense relating to these two items should Baton report in its quarterly income statement for the three months ended March 31?

Answer 1

Answer:

$80,000

Explanation:

The computation is shown below:

Total depreciation expenses = $120,000 × (3 months ÷ 12 months)

                                                = $30,000

Year end bonuses to employees = $200,000 × (3 months ÷ 12 months)

                                                       = $50,000

So, the total amount of expense would be

= $30,000 + $50,000

= $80,000