Rosen Corporation was formed on December 12, Year 1. It plans to close its books annually each December 31. Rosen is located in Lanmark City and Apple County. The fiscal period of these two governmental units runs from July 1 to June 30. The property tax that they assess on property held on January 1 of each year becomes a lien against the property on July 1. The estimated property taxes for Rosen for the period July 1, Year 2, to June 30, Year 3, are $15,300. The tax bill is mailed in October with a requirement that the tax be paid before December 31. The tax bill received on October 31, Year 2, for Rosen revealed an actual tax of $15,705, and the corporation paid this amount on November 15, Year 2. Rosen elects to record monthly property tax adjustments for interim statements required by management. 1. Prepare the necessary journal entries to record: 1. The monthly property tax adjustments from July Year 2 to October Year 2 2. The payment on November 30, Year 2 (before the November 30 adjustment for property taxes) 3. The monthly property tax adjustments from November Year 2 to June Year 3 Year 2 entries should be recorded in page 2, Year 3 entries should be recorded in page 3.
Rosen Corporation was formed on December 12, Year 1. It plans to close its books annually each December 31. Rosen is located in Lanmark City and Apple County. The fiscal period of these two governmental units runs from July 1 to June 30. The property tax that they assess on property held on January 1 of each year becomes a lien against the property on July 1. The estimated property taxes for Rosen for the period July 1, Year 2, to June 30, Year 3, are $15,300. The tax bill is mailed in October with a requirement that the tax be paid before December 31. The tax bill received on October 31, Year 2, for Rosen revealed an actual tax of $15,705, and the corporation paid this amount on November 15, Year 2. Rosen elects to record monthly property tax adjustments for interim statements required by management. 1. Prepare the necessary journal entries to record: 1. The monthly property tax adjustments from July Year 2 to October Year 2 2. The payment on November 30, Year 2 (before the November 30 adjustment for property taxes) 3. The monthly property tax adjustments from November Year 2 to June Year 3 Year 2 entries should be recorded in page 2, Year 3 entries should be recorded in page 3.
Chapter1: Financial Statements And Business Decisions
Section: Chapter Questions
Problem 1Q
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Rosen Corporation was formed on December 12, Year 1. It plans to close its books annually each December 31. Rosen is located in Lanmark City and Apple County. The fiscal period of these two governmental units runs from July 1 to June 30. The property tax that they assess on property held on January 1 of each year becomes a lien against the property on July 1. The estimated property taxes for Rosen for the period July 1, Year 2, to June 30, Year 3, are $15,300. The tax bill is mailed in October with a requirement that the tax be paid before December 31. The tax bill received on October 31, Year 2, for Rosen revealed an actual tax of $15,705, and the corporation paid this amount on November 15, Year 2. Rosen elects to record monthly property tax adjustments for interim statements required by management. 1. Prepare the necessary journal entries to record:
1. The monthly property tax adjustments from July Year 2 to October Year 2
2. The payment on November 30, Year 2 (before the November 30 adjustment for property taxes)
3. The monthly property tax adjustments from November Year 2 to June Year 3
Year 2 entries should be recorded in page 2, Year 3 entries should be recorded in page 3.
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