Advanced Accounting
14th Edition
ISBN: 9781260247824
Author: Joe Ben Hoyle, Thomas F. Schaefer, Timothy S. Doupnik
Publisher: RENT MCG
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Textbook Question
Chapter 17, Problem 4P
A city agrees to allow the Jones Company to operate within its geographical boundaries without having to pay real estate taxes for the following 10 years. In exchange, Jones agrees to continue employing at least 120 people at all times. For this tax abatement, which of the following does the city not have to disclose?
- a. The party receiving the tax abatement.
- b. The purpose of the tax abatement program.
- c. Dollar amount of taxes abated.
- d. The tax being abated.
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Superior Developers sells lots for residential development. When lots are sold, Superior recognizes income for financial reporting purposes in the year of the sale. For some lots, Superior recognizes income for tax purposes when collected. In the prior year, income recognized for financial reporting purposes for lots sold this way was $20 million, which would be collected equally over the next two years. The enacted tax rate was 40%. This year, a new tax law was enacted, revising the tax rate from 40% to 35% beginning next year. Calculate the amount by which Superior should reduce its deferred tax liability this year.
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Collected current property taxes amounting to $5,973,000.
Collected $52,900 in delinquent taxes and $4,800 in interest and penalties on the delinquent taxes. These amounts had been recorded as Deferred Inflows of Resources in the prior year.
Imposed penalties and interest in the amount of $7,400 but only expects to collect $6,200 of that amount.
Reclassified uncollected taxes and interest and penalties as delinquent. These amounts are not expected to be collected within the first 60 days of the following fiscal year.
Required
Prepare journal entries to record the property tax transactions in the General Fund.
Prepare journal entries to record the property tax transactions in the governmental activities journal.
Determine the amount of property tax revenue recognized during the…
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