What is the journal entry to record the property tax

Assignment Help Accounting Basics

Reference no: EM131881024

Question: 1) Broomcorn City needs to collect a minimum of $3,500,000 in property taxes in order to finance its operation for the fiscal year 20x2, which begins on October 1, 20x1. The city estimates its uncollectible property taxes to be 1%. In addition, the percentage allocated for refunds and discounts for early payment is 5.4% . Broomcorn City records the levy on Sept. 1, 20x1 and at the same time sends the property bills to the property owners. What is the journal entry to record the property tax levy on 9/1/20x1? (Round to the nearest $) A correct first entry is critical! From this point forward, you will need to maintain t-account balances for each account.

2) On September 15, 20x1, Property Owner Z pays $2,000 in property taxes receiving a $50 discount for early payment.

3) What entries are required on October 1, 20x1?

4) Refunds were granted to property tax owners who protested their tax bills prior to paying them. The amount was $ 40,000.

5) On November 1, 20x1, total property tax collections are $3,510,000 and only 160,000 of discounts were awarded. Hint: For the second entry, compare the cash collected to date for the property taxes to the revenue recognized in transaction #1. Next compute the balance in the Refunds and Discounts account.

6) On November 2, 20x1 the property taxes are deemed delinquent.

7) Penalties and interest on the delinquent taxes is $5,800. Delinquent taxes and associated penalties and interest will be collected by November 30, 20x2.

8) On December 1, 20x1, the $3,500 delinquent taxes of Taxpayer Q are paid along with$700 in penalties and interest.

9) On May 1, 20x2, a tax lien is filed on the XYZ Limited property for unpaid back taxes ($15,000) and penalties and interest ($3,000).

10) On June 1, 20x2, assume the XYZ Limited property is sold by the city at an auction for $30,000.

11) Instead of #10, assume the property is sold at a tax lien action for $17,000.

Reference no: EM131881024

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