The Antarctica Company closes its books annually on December 31, while the city in which it is located has a fiscal year beginning on April 1 and ending on March 31. Taxes on property are assessed on April 1 of each year. Property taxes in the amount of $360,000 and $390,000 were assessed on April 1, 2015 and 2016, respectively. For the year ended December 31, 2016, the Antarctica Company would report property tax expense of

Question

Quizplus · Accepted Answer

The property tax expense for the year ended December 31, 2016, is $382,500. This is calculated by taking the property tax assessed on April 1, 2016 ($390,000) and multiplying it by 9/12 (the portion of the fiscal year that falls within the calendar year 2016).

The Antarctica Company Closes Its Books Annually on December 31