### Handling Utilities Expense in Financial Statements**Scenario:**- **Date Received:** December 28, 2019- **Amount Owed:** $1,900 for December 2019 utilities- **Payment Date:** January 27, 2020**Objective:**On the financial statements dated December 31, 2019, Concord, Inc. needs to report the correct expenses and liabilities related to the utilities bill.### Options for Reporting**Option 1:**- **Balance Sheet:** Utilities Payable of $1,900- **Income Statement:** Utilities Expense of $1,900**Option 2:**- **Balance Sheet:** Utilities Expense of $0- **Income Statement:** Utilities Payable of $0**Option 3:**- **Balance Sheet:** Prepaid Expenses of $1,900- **Income Statement:** Utilities Expense of $1,900**Option 4:**- **Balance Sheet:** Utilities Payable of $0- **Income Statement:** Utilities Expense of $0### Explanation of the Correct Reporting:For the period ending December 31, 2019, Concord, Inc. should recognize the utilities expense incurred in December even though it will be paid in January. - The appropriate entry on the **Balance Sheet** would be: - **Utilities Payable of $1,900**, because the expense has been incurred but not yet paid.- The appropriate entry on the **Income Statement** would be: - **Utilities Expense of $1,900**, because the cost pertains to the reporting period of December 2019.### Conclusion:The correct reporting for the financial statements of Concord, Inc. on December 31, 2019, should show the incurred utilities expense and the corresponding payable amount, as detailed in **Option 1**:- **Utilities Payable of $1,900 on the Balance Sheet**- **Utilities Expense of $1,900 on the Income Statement**This ensures the financial statements accurately reflect the company's liabilities and expenses for the period ending December 31, 2019.

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Answered: was due inancial State nc. should…

was due inancial State nc. should report

10th Edition

ISBN:9781259964947

Author:Libby

Publisher:Libby

Chapter1: Financial Statements And Business Decisions

Section: Chapter Questions

Problem 1Q

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