Question

Accrued Expense A company pays its telephone bill on the fifteenth of each month at a daily rate of $15. Calculate the amount of Telephone Utilities Payable at December 31.

Answer 1

To determine the Telephone Utilities Payable at December 31, multiply the daily rate of $15 by the 16 days from December 16 to December 31, resulting in $240.

Step-by-step explanation:

The question asks to calculate the amount of Telephone Utilities Payable at December 31. Since the company pays a daily rate of $15 for its telephone bill and the bill is paid on the fifteenth of every month, we need to calculate the accrued expenses for the last 16 days of December (from the 16th to the 31st).

Here's the calculation:

• Daily rate: $15
• Number of days from December 16 to December 31 inclusive: 16 days
• Accrued Expense Calculation: Daily rate × Number of days
• Total Telephone Utilities Payable: $15 × 16 = $240

Therefore, the amount of Telephone Utilities Payable at December 31 would be $240.