Q1. Determine the Millage Rate from the following information:
|Amount to be collected (a)||$ 190,000|
|Estimated Uncollectible (b)||5%|
|Assessed Property Value||4,000,000|
|Less: Property Not Taxable||(300,000)|
|Taxable Assessed Value||?|
Q2. A city receives sales taxes of $825,000 from the state during the calendar year 2018. In January 2019, the state advises the city that it will remit, by February 28, 2019, an additional $345,000 for taxes collected during the last quarter of 2018. Further, based on past experience, the city expects to receive in April an additional $93,000 applicable to 2018. The city has a policy of considering sales taxes applicable to a particular year as “available” if received by February 28 of the following year; hence, $93,000 of the $345,000 receivable is not “available.”
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a.Prepare necessary journal entry to record collection of sales tax for the city.
b.Prepare necessary journal entry to record year-end accrual for sales taxes receivable.
Q3. Prepare journal entries to record the following transactions for a town for 2018. The Town records encumbrances only for its Supplies appropriation.
- The town adopted the following budget for the year:
Property taxes $412,500
Licenses and fees 52,500
- Property tax bills amounting to $412,500 were sent to the property owners.
- Because property taxes were not due to be received for several months and the town needed cash to finance its activities, the town borrowed $150,000 from a local bank using tax anticipation notes.
- The town paid salaries in the amount of $112,500.
- The town sent out two purchase orders for supplies: purchase order A for $9,000 and purchase order B for $7,500.
- The town received $195,000 from property owners in payment of their property taxes.
- The town repaid the bank on its borrowing in transaction c. The amount paid was $151,500, which included interest of $1,500.
- The town collected $22,500 for fishing licenses.
- The town received the supplies ordered on purchase order A in transaction e. All the supplies arrived in good condition and the invoice for $9,150 was approved for payment.
- The town Treasurer paid the invoice in transaction i. for $9,150.