On November 1, 2016, a company using accrual accounting, pays$720,000 for a television advertising campaign. Commercials will run evenly over six months beginning on November 1, 2016. How much Advertising Expense will be reported on an income statement prepared for the year ended December 31, 2017?
A. $360,000
B. $240,000
C. $720,000
D. $480,000

correct option is D. $480,000

Explanation:

given data

pay for television advertising campaign = $720,000

solution

we know that here advertising expense report in 2016 for = 2 months

other reported in 2017 Income statement = 4 months

so here advertising Expense report for prepare income statement on December 31, 2017 will be as

advertising Expense  = $720000 ×    

advertising Expense  = $480,000

so here correct option is D. $480,000

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