Question
A-Z Construction Company was organized on May 1 of the current year. On May 2, A-Z Construction prepaid $5,040 to the city for taxes (license
A-Z Construction Company was organized on May 1 of the current year. On May 2, A-Z Construction prepaid $5,040 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 $20,860.
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. License fees _______
Property tax _______
b. What is the amount of tax expense for the current year? $_______
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Get StartedRecommended Textbook for
Accounting
Authors: Carl S. Warren, James M. Reeve, Jonathan Duchac
27th edition
978-1337272094, 1337272094, 978-1337514071, 1337514071, 978-1337899451
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