LO 2 P5-46. (Accounting for property taxes)At the start of calendar year 2022, Central City's records showed the following accounts relative toprior year property taxes:Property taxes receivable-delinquent.Allowance for refunds and uncollectible taxes-delinquent..Deferred inflow of resources-unavailable property taxes..$52,0008,00015,000Prepare journal entries to record the following transactions:1. To balance its 2022 budget, which requires $1,500,000 in property taxes, Central City levies propertytaxes in the amount of $1,515,000, providing an allowance of $15,000 for uncollectible accounts.2. During the year 2022, it collects property taxes as follows:$ 44,000From prior year delinquent taxesFrom 2022 tax levy....1,490,0003. Central City recognizes $15,000 of the deferred inflow of resources-unavailable property taxes asrevenues in 2022.4. It initiates foreclosure proceedings against the delinquent taxpayer who owed the city $8,000. Whenit does this, it charges the taxpayer a penalty of $1,000.5. An auctioneer sells the foreclosed property for $40,000, deducts a fee of $3,000, and remits $37,000to the city. The city deposits the check and prepares a voucher for the net amount due to the taxpayer.6. The city reverses the Allowance for refunds and uncollectible taxes–delinquent ($8,000) becausethe lien has been satisfied and all prior year delinquent taxes have been collected.7. Central City rebates $12,000 to taxpayers who had paid their 2022 taxes, but who successfully ap-pealed their tax assessments.8. At year-end, the city (a) declares all unpaid 2022 taxes as delinquent; (b) concludes that there is noneed for an allowance for uncollectible accounts; and (c) estimates that $15,000 of the delinquenttaxes will be collected in the first 60 days of calendar year 2023.

Journal entries refer to the systematic documentation of the financial transactions of a company in…

Answered: P5-46. (Accounting for property taxes)…

FINANCIAL ACCOUNTING

10th Edition

ISBN:9781259964947

Author:Libby

Publisher:Libby

Chapter1: Financial Statements And Business Decisions

Section: Chapter Questions

Problem 1Q

See similar textbooks

Similar questions

Bonita Inc. reports the following pretax income (loss) for both book and tax purposes. Pretax Year Income (Loss) Tax Rate 2018 $124,000 20 % 2019 86,000 20 % 2020 (89,000 ) 25 % 2021 126,000 25 % The tax rates listed were all enacted by the beginning of 2018. Prepare the journal entries for years 2018-2021 to record income tax expense (benefit) and income taxes payable, and the tax effects of the loss carryforward, assuming that based on the weight of available evidence, it is more likely than not that one-half of the benefits of the loss carryforward will not be realized. (Credit account titles are automatically indented when amount is entered. Do not indent manually. If no entry is required, select "No Entry" for the account titles and enter 0 for the amounts.)
The City of Castleton’s General Fund had the following post-closing trial balance at June 30, 2019, the end of its fiscal year: Debits Credits Cash $ 476,000 Taxes Receivable—Delinquent 601,000 Allowance for Uncollectible Delinquent Taxes $ 189,120 Interest and Penalties Receivable 28,080 Allowance for Uncollectible Interest and Penalties 12,960 Inventory of Supplies 17,900 Vouchers Payable 166,500 Due to Federal Government 77,490 Deferred Inflows of Resources—Unavailable Revenues 427,000 Fund Balance—Nonspendable—Inventory of Supplies 17,900 Fund Balance—Unassigned 232,010 $ 1,122,980 $ 1,122,980 Prepare a General Fund balance sheet as of June 30, 2020.
The following information is available for Marigold Corporation for 2020. Depreciation reported on the tax return exceeded depreciation reported on the income statement by $114,000. This difference will reverse in equal amounts of $28,500 over the years 2021-2024. Interest received on municipal bonds was $10,200. Rent collected in advance on January 1, 2020, totaled $61,800 for a 3-year period. Of this amount, $41.200 was reported as unearned at December 31, 2020, for book purposes. 1. 2. 3. 5. 6. The tax rates are 40% for 2020 and 35% for 2021 and subsequent years. Income taxes of $308,000 are due per the tax return for 2020. No deferred taxes existed at the beginning of 2020. ? Prepare the journal entries to record income tax expense, deferred income taxes, and income taxes payable for 2020 and 2021. Assume taxable income was $1,065,000 in 2021. (Credit account titles are automatically indented when amount is entered. Do not indent manually. If no entry is required, select "No Entry"…
Short-term borrowing and investing transactions A local government operates on a calendar-year basis. The following transactions and events occurred during calendar year 2021. 1. On February 1, 2021, borrowed $800,000 on tax anticipation notes (TANS). The TANS will be repaid with 0.8 percent interest on January 31, 2022. 2. Interest on the TANS was accrued through December 31, 2021. 3. Invested $200,000 in a certificate of deposit (CD) on April 1, 2021. The CD, which pays interest of 0.6 percent, will mature on September 30, 2021. 4. The CD matured on September 30, 2021. Prepare the appropriate journal entries. Round all amounts to the nearest dollar. Enter 0 or leave the field blank if no entry is required. If an entry affects more than one debit or credit account, enter the accounts in alphabetic order. Account Debit Credit To record amount borrowed. To record interest on TANS. To record investment in CD. To record redemption of CD. > > > > > >
Required information [The following information applies to the questions displayed below.] Glennelle's Boutique Inc. operates in a city in which real estate tax bills for one year are issued in May of the subsequent year. Thus, tax bills for 2019 are issued in May 2020 and are payable in July 2020. c-2. Assume that the actual tax bill, received in May 2020, was for $7,500. Record the journal entry to show the effects of the appropriate adjustment to the amount previously accrued. (If no entry is required for a transaction/event, select "No journal entry required" in the first account field.) 1 No Event 1 X Answer is complete but not entirely correct. General Journal Real estate tax expense Real estate taxes payable Debit 2,500 X Credit 2,500 x O Apr 8
Required information [The following information applies to the questions displayed below.] Arndt, Incorporated reported the following for 2024 and 2025 ($ in millions): Revenues Expenses Pretax accounting income (income statement) Taxable income (tax return) Tax rate: 25% 2024 $918 774 $144 $126 2025 $ 1,010 830 $ 180 $ 214 a. Expenses each year include $36 million from a two-year casualty insurance policy purchased in 2024 for $72 million. The cost is tax deductible in 2024. b. Expenses include $2 million insurance premiums each year for life insurance on key executives. c. Arndt sells one-year subscriptions to a weekly journal. Subscription sales collected and taxable in 2024 and 2025 were $37 million and $53 million, respectively. Subscriptions included in 2024 and 2025 financial reporting revenues were $31 million ($14 million collected in 2023 but not recognized as revenue until 2024) and $37 million, respectively. Hint. View this as two temporary differences-one reversing in…
At the end of its first year of operations on December 31, 2022, the Metro Company reported pretax financial income of $100,000. An investigation of that income revealed the following items:· Bad debts expense of $12,000 was recognized (reported on 2022 income statement). The accounts will be written off (tax deductible) in 2023.· Interest received on municipal bonds: $7,500.· Warranty expenses of $16,000 were accrued for financial reporting purposes, but were not expected to result in a cash payment until 2023.· Depreciation on the tax return exceeded depreciation for financial reporting purposes by $32,000.Assume that any deferred tax assets are considered more likely than not to be realized. The enacted income tax rate for all years is 25%.Required:1) Compute taxable income. Show your calculation. If not, no credit.2) Prepare the entry to record income tax expense and any related assets and liabilities for Metro on December 31, 2022.
! Required information [The following information applies to the questions displayed below.] Arndt, Incorporated reported the following for 2024 and 2025 ($ in millions): Revenues Expenses Pretax accounting income (income statement) Taxable income (tax return) Tax rate: 25% 2024 $ 940 796 $ 144 $ 104 2025 $ 1,032 a. Expenses each year include $58 million from a two-year casualty insurance policy purchased in 2024 for $116 million. The cost is tax deductible in 2024. 852 $ 180 $ 214 b. Expenses include $2 million insurance premiums each year for life insurance on key executives. c. Arndt sells one-year subscriptions to a weekly journal. Subscription sales collected and taxable in 2024 and 2025 were $59 million and $75 million, respectively. Subscriptions included in 2024 and 2025 financial reporting revenues were $53 million ($36 million collected in 2023 but not recognized as revenue until 2024) and $59 million, respectively. Hint. View this as two temporary differences-one reversing…
Required Information [The following information applies to the questions displayed below] Arndt, Inc. reported the following for 2021 and 2022 ($ In millions): Revenues Expenses Pretax accounting income (income statement) Taxable income (tax return) Tax rate: 25% 2021 $968 792 $ 176 $ 148 2022 $1,012 816 $196 $ 224 a. Expenses each year Include $54 million from a two-year casualty Insurance policy purchased in 2021 for $108 million. The cost is tax deductible in 2021. b. Expenses include $2 million Insurance premiums each year for life Insurance on key executives. c. Arndt sells one-year subscriptions to a weekly Journal. Subscription sales collected and taxable in 2021 and 2022 were $49 million and $51 million, respectively. Subscriptions included in 2021 and 2022 financial reporting revenues were $41 million ($26 million collected in 2020 but not recognized as revenue until 2021) and $49 million, respectively. Hint View this as two temporary differences-one reversing in 2021; one…
0 1 E 20-7 General fund journal entries (property taxes) The following events and transactions relate to the levy and collection of property taxes for Jedville Township: 13 14 15 16 March 21, 2011-Property tax bills for $2,500,000 are sent to property owners. An estimated 2% of the property tax levies are uncollectible. The taxes are due on May 1. May 4, 2011-$1,900,000 in taxes have been collected. The remaining receivables are reclassified as delinquent. May 5 to December 31, 2011-An additional $150,000 of taxes are collected. November 1, 2011-A $5,000 tax receivable account is determined to be uncollectible and is written off. January 1, 2012, to February 28, 2012-An additional $87,750 of 2011 taxes are collected. REQUIRED 1. Prepare summary journal entries for the events and transactions described for the Jedville general fund. 2. How will property taxes be presented in the December 31, 2011, balance sheet? 3. What amount of property tax revenues should be reported for 2011?
Mallock Incorporated reports net operating income (loss) for financial reporting and tax purposes in each year as follows ($ in thousands): 2016 $ 160 2017 $ 50 2018 $ 0 2019 2020 $ 0 $ (240) Mallock's federal tax rate decreased from 35% to 21% starting in 2018. Mallock accounts for its 2020 NOL under the CARES Act. Required: 1. Prepare the appropriate journal entry to record Mallock's 2020 income taxes. 2. Show the lower portion of the 2020 income statement that reports income tax expense or benefit. Complete this question by entering your answers in the tabs below.
Arndt, Incorporated reported the following for 2024 and 2025 ($ in millions): Revenues Expenses Pretax accounting income (income statement) Taxable income (tax return) Tax rate: 25% 2024 $888 760 $128 $ 116 2025 $ 980 800 $ 180 $ 200 a. Expenses each year include $30 million from a two-year casualty insurance policy purchased in 2024 for $60 million. The cost is tax deductible in 2024. b. Expenses include $2 million insurance premiums each year for life insurance on key executives. c. Arndt sells one-year subscriptions to a weekly journal. Subscription sales collected and taxable in 2024 and 2025 were $33 million and $35 million, respectively. Subscriptions included in 2024 and 2025 financial reporting revenues were $25 million ($10 million collected in 2023 but not recognized as revenue until 2024) and $33 million, respectively. (Hint: View this as two temporary differences-one reversing in 2024; one originating in 2024.) d. 2024 expenses included a $14 million unrealized loss from…

SEE MORE QUESTIONS

Recommended textbooks for you

FINANCIAL ACCOUNTING

Accounting

ISBN:

9781259964947

Author:

Libby

Publisher:

MCG

Accounting

ISBN:

9781337272094

Author:

WARREN, Carl S., Reeve, James M., Duchac, Jonathan E.

Publisher:

Cengage Learning,

Accounting Information Systems

Accounting

ISBN:

9781337619202

Author:

Hall, James A.

Publisher:

Cengage Learning,

FINANCIAL ACCOUNTING

Accounting

ISBN:

9781259964947

Author:

Libby

Publisher:

MCG

Accounting

ISBN:

9781337272094

Author:

WARREN, Carl S., Reeve, James M., Duchac, Jonathan E.

Publisher:

Cengage Learning,

Accounting Information Systems

Accounting

ISBN:

9781337619202

Author:

Hall, James A.

Publisher:

Cengage Learning,

Horngren's Cost Accounting: A Managerial Emphasis…

Accounting

ISBN:

9780134475585

Author:

Srikant M. Datar, Madhav V. Rajan

Publisher:

PEARSON

Intermediate Accounting

Accounting

ISBN:

9781259722660

Author:

J. David Spiceland, Mark W. Nelson, Wayne M Thomas

Publisher:

McGraw-Hill Education

Financial and Managerial Accounting

Accounting

ISBN:

9781259726705

Author:

John J Wild, Ken W. Shaw, Barbara Chiappetta Fundamental Accounting Principles

Publisher:

McGraw-Hill Education

SEE MORE TEXTBOOKS