8 pt Be Careful X Company prepares monthly financial statements. The phone compa

Question

8 pt Be Careful X Company prepares monthly financial statements. The phone company charges X Company $120 per month for unlimited domestic calls and SO.11 per minute for international calls. X Company receives a phone bill at the end of cach month and pays it the following month. In July, it had 1,000 minntes of international calls; in August, it had 1,200 minutes of international calls. On X Company's August Income Statement, telephone experuse was 9. AO $110 BOS120 CO $132 DO $184 E$230 FO8252

Explanation / Answer

Since the amount is paid in the following month i.e July month bill is paid in August and August month bill is paid in September
August's income statement will reflect the amount to be paid for July calls.
Amount to be paid
Rental for domestic calls = $120
International calls = $0.11*1000 = $110
Total amount to be pad in August = $230
Option E

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