Danforth Inc. has some financial transactions occurring in 2021 that result in future taxable amounts. Which of the following item results in future taxable amounts? Question 20 options: a) $95,000 of subscription magazine revenue that is received in 2021 by Danforth and relates to magazines shipped to customers in 2022. b) $19,00 of prepaid rent that is paid by Danforth to another entity in 2021 but will be used in 2022. c) $25,000 of interest received by Danforth from municipal bonds. d) $72,000 of salaries and wages that are recorded by Danforth as an expense in 2021 but not paid until 2022.

As per the revenue recognition accounting principle, revenues shall be recognized only when the…

Answered: Danforth Inc. has some financial…

FINANCIAL ACCOUNTING

10th Edition

ISBN:9781259964947

Author:Libby

Publisher:Libby

Chapter1: Financial Statements And Business Decisions

Section: Chapter Questions

Problem 1Q

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Danforth Inc. has some financial transactions occurring in 2021 that result in future taxable amounts. Which of the following item results in future taxable amounts?

Question 20 options:

a)	$95,000 of subscription magazine revenue that is received in 2021 by Danforth and relates to magazines shipped to customers in 2022.

b)	$19,00 of prepaid rent that is paid by Danforth to another entity in 2021 but will be used in 2022.

c)	$25,000 of interest received by Danforth from municipal bonds.

d)	$72,000 of salaries and wages that are recorded by Danforth as an expense in 2021 but not paid until 2022.

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