Answered Essay: a-z construction company was organized on May 1 of the current year. On May 2, A-Z Construction prepaid $18,480 to the

a-z construction company was organized on May 1 of the current year. On May 2, A-Z Construction prepaid $18,480 to the city for taxes (license fees) for the next 12 months and debited the prepaid taxes account. A-Z Construction is also required to pay in January an annual tax (on property) for the previous calendar year. The estimated amount of the property tax for the current year (May 1 to December 31) is $45,000.

A.) Journalize the two adjusting entries required to bring the accounts affected by the two taxes up to date as of December 31, the end of the current year.

B.) What is the amount of tax expense for the current year?

Expert Answer

 

Solution:
a. Particulars Debit Credit
Taxes (License Fees) Expense $12,320
Prepaid Taxes $12,320
Notes: Accrued monthly license fees = Annual taxes (license fees) / 12 months
= $18,480/12
= $1,540
Total accrued license fees = Months from ( May 1st to 31st December ) x Accrued monthly license fees
= 8 months x $1,540
= $12,320
Particulars Debit Credit
Property Tax Expense $30,000
Property Tax Payable $30,000
Notes: Accrued monthly property taxes = annual tax (on property) / 12 months
= $45,000/12
= $3,750
Total accrued property taxes = Months from ( May 1st to 31st December ) x Accrued monthly property taxes
= 8 months x $3,750
= $30,000
b. Tax expense for the year = $42,320
Working Notes:
Tax expense for the year =Total accrued license fees + Total accrued property taxes
= $12,320 + $30,000
=$42,320
Buy Essay
Calculate your paper price
Pages (550 words)
Approximate price: -

Help Me Write My Essay - Reasons:

Best Online Essay Writing Service

We strive to give our customers the best online essay writing experience. We Make sure essays are submitted on time and all the instructions are followed.

Our Writers are Experienced and Professional

Our essay writing service is founded on professional writers who are on stand by to help you any time.

Free Revision Fo all Essays

Sometimes you may require our writers to add on a point to make your essay as customised as possible, we will give you unlimited times to do this. And we will do it for free.

Timely Essay(s)

We understand the frustrations that comes with late essays and our writers are extra careful to not violate this term. Our support team is always engauging our writers to help you have your essay ahead of time.

Customised Essays &100% Confidential

Our Online writing Service has zero torelance for plagiarised papers. We have plagiarism checking tool that generate plagiarism reports just to make sure you are satisfied.

24/7 Customer Support

Our agents are ready to help you around the clock. Please feel free to reach out and enquire about anything.

Try it now!

Calculate the price of your order

Total price:
$0.00

How it works?

Follow these simple steps to get your paper done

Place your order

Fill in the order form and provide all details of your assignment.

Proceed with the payment

Choose the payment system that suits you most.

Receive the final file

Once your paper is ready, we will email it to you.

HOW OUR ONLINE ESSAY WRITING SERVICE WORKS

Let us write that nagging essay.

STEP 1

Submit Your Essay/Homework Instructions

By clicking on the "PLACE ORDER" button, tell us your requires. Be precise for an accurate customised essay. You may also upload any reading materials where applicable.

STEP 2

Pick A & Writer

Our ordering form will provide you with a list of writers and their feedbacks. At step 2, its time select a writer. Our online agents are on stand by to help you just in case.

STEP 3

Editing (OUR PART)

At this stage, our editor will go through your essay and make sure your writer did meet all the instructions.

STEP 4

Receive your Paper

After Editing, your paper will be sent to you via email.

× How can I help you?