Question

On January 15, 2015, Vancey Company paid property taxes on its factory building for the calendar year 2015 in the amount of $960,000. In the first week of April 2015, Vancey made unanticipated major repairs to its plant equipment at a cost of $2,400,000. These repairs will benefit operations for the remainder of the calendar year. How should these expenses be reflected in Vancey's quarterly income statements?

Answer 1

The rate of return for 2015 based on the year-end common stockholders' equity was

A. 700 ÷ 2,346.

B. 700 ÷ 2,376.

C. 670 ÷ 2,346.

D. 670 ÷ 2,376.

$700,000 - (.06 ×$500,000)/$750,000 + [$1,626,000 - (.06 × $500,000)] = 335 ÷ 1,173. x 2

C. 670 ÷ 2,346.

Step-by-step explanation: