On January 1, Year 1, XYZ Inc

question 11

Multiple Choice

On January 1, Year 1, XYZ Inc.paid three years' worth of rent in the amount of $36,000.The entire amount was expensed in Year 1.Assuming that the Year 2 books are still open, which of the following best describes the required adjustment to the company's December 31st, Year 2 books? Assume a tax rate of 20%.

• A)Please see the following table:
• B)Please see the following table:
• C)Please see the following table:
• D)Please see the following table:

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Definitions:

Labor

The work performed by humans that is used in the production of goods and services.

Equivalent Units

Equivalent units, in managerial accounting, are a concept used in process costing that represents the amount of work done during a period in terms of fully completed units of output.

Materials Costs

The expenses associated with the raw materials used in the production of goods.

Work In Process

Inventory that includes all materials, labor, and overhead costs incurred for products that are in the production process.