Bronson Apparel Inc. operates a retail store and must determine the proper December 31, 2019, year-end accrual for the following expenses:
• The store lease calls for fixed rent of $1,000 per month, payable at the beginning of the month, and additional rent equal to 6% of net sales over $200,000 per calendar year, payable on January 31 of the following year. Net sales for 2019 are $800,000.
• Bronson has personal property subject to a city property tax. The city’s fiscal year runs from July 1 to June 30, and the tax is payable on June 30. Bronson estimates that its personal property tax will amount to $6,000 for the city’s fiscal year ending June 30, 2020.
In its December 31, 2019, balance sheet, Bronson should report accrued expenses of:
a. $39,000
b. $42,000
c. $51,000
d. $54,000
