Davis Company has a December 31 year end. The company received its property tax bill for 2017 on March 1, 2017. According to the bill, taxes of $24,000 for the year ended December 31, 2017 are due by April 30, 2017. On March 1, Davis will record property tax expense of

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Quizplus · Accepted Answer

On March 1, only two months of the year (January and February) have passed, so Davis Company should record property tax expense for those two months. The monthly expense is $24,000 / 12 = $2,000. Therefore, for two months, the expense is $2,000 x 2 = $4,000.

Davis Company Has a December 31 Year End