On January 1,2016,Gibson Corporation Entered into a Four-Year Operating Lease

question 76

Multiple Choice

On January 1,2016,Gibson Corporation entered into a four-year operating lease.The payments were as follows: $20,000 for 2016,$18,000 for 2017,$16,000 for 2018,and $14,000 for 2019.What is the correct amount of lease expense for 2017?

• A)$20,500.
• B)$19,000.
• C)$17,000.
• D)$18,000.

---

Definitions:

Inventory

Items held by a company for the purpose to be sold or used in the production process, including raw materials, work-in-progress, and finished goods.

Consolidated Income Tax Return

A combined tax return for a parent company and its subsidiaries, allowing the group to be taxed as a single entity.

Intra-entity Transfers

Transactions involving assets, services, or funds between divisions, departments, or units within the same organization.

Voting Stock

Shares of stock that grant the shareholder the right to vote on corporate matters.