Answer the Following Questions Using the Information Below

question 133

Multiple Choice

Answer the following questions using the information below:
Monster Vehicle Rental Corporation has two departments, Car Rental and Truck Rental. Central costs may be allocated to the two departments in various ways.

-If advertising expense of $112,500 is allocated on the basis of sales, the amount allocated to the Truck Rental Department would be:

• A)$56,250
• B)$62,500
• C)$37,500
• D)$87,500

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Definitions:

Stockholders' Equity

The residual interest in the assets of a corporation that remains after deducting its liabilities; also known as shareholders' equity.

Cash Dividend

The allocation of a part of a company's profits to its shareholders, approved by the board of directors, and typically dispensed in the form of cash.

Stock Dividend

A dividend payment made in the form of additional shares rather than a cash payout, representing a reinvestment of a company’s earnings.

Market Value

The current price at which an asset or service can be bought or sold in a marketplace.