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Bonus Expenses for Otto

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In January 2008, Otto, Inc. estimated that its year-end bonus to executive would be $720,000 for 2008. The actual amount paid for the year-end bonus was $660,000

The estimate for 2008 is subject to year-end adjustment

What amount if any of expense should be reflected in Otto's quarterly income statement for the three month ended march 31, 2008?

a) $0
b) $165,000
c) $180,000
d) $720,000

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Solution Summary

The solution explains the bonus expense which will be included in the income statement.

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c) $180,000

The total amount estimated is $720,000. This amount should be accrued equally in the four quarters. The ...

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