Brad Operates a Storage Business on the Accrual Method

question 88

Multiple Choice

Brad operates a storage business on the accrual method.On July 1 Brad paid $48,000 for rent on his storage warehouse and $18,000 for insurance on the contents of the warehouse.The rent and insurance cover the next 12 months.What is Brad's deduction for the rent and insurance?

• A)$48,000 for the rent and $18,000 for the insurance.
• B)$24,000 for the rent and $18,000 for the insurance.
• C)$24,000 for the rent and $9,000 for the insurance.
• D)$48,000 for the rent and $9,000 for the insurance.
• E)None of the choices are true.

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Definitions:

Acquirer

A company or individual that purchases another company or its significant assets.

Stockholders

Individuals or entities that own shares in a corporation, giving them partial ownership and possibly voting rights.

Horizontal Merger

A business consolidation that occurs between firms who operate in the same industry, often aimed at creating a more competitive entity with higher market share.

Conglomerate Merger

A merger between companies that operate in entirely different industries.