The Nathan's Company Rents Numerous Properties Throughout the Year

question 24

Multiple Choice

The Nathan's Company rents numerous properties throughout the year. Nathan's pays rents in advance in some cases, and in other cases rents are paid after the rental period expires. The following data are included in Nathan's December 31 balance sheets: During 2016, Nathan paid $200,000 in rentals. In its accrual basis income statement for the year ended December 31, 2016, Nathan should report rent expense of:

• A) $145,000
• B) $175,000
• C) $200,000
• D) $225,000

---

Definitions:

Collective Bargaining

The negotiation of labor contracts between labor unions and firms or government entities.

Lockout

A negotiating tactic in which a firm forbids its unionized workers to return to work until a new collective bargaining agreement is signed; a means of imposing costs (lost wages) on union workers.

Efficiency Wages

Higher-than-market wages paid by employers to increase worker productivity, morale, and retention.

Below-equilibrium Levels

Refers to a situation where the quantity of a good or service demanded exceeds the quantity supplied at a given price, typically leading to shortages.