Ultimate_Writer 3wk

Art Imaging Company was organized on April 1 of the current year. On April 2, Art Imaging Company prepaid $61,200 to the city for taxes (license fees) for the next 12 months and debited the prepaid taxes account. Art Imaging Company 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 (April 1 to December 31) is $29,100.

	Required:
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. Refer to the Chart of Accounts for exact wording of account titles.
B.	What is the amount of tax expense for the current year?
CHART OF ACCOUNTS
General Ledger
ASSETS 11 Cash 12 Accounts Receivable 13 Supplies 14 Prepaid Insurance 15 Land 16 Equipment 17 Accumulated Depreciation-Equipment 19 Accumulated Depreciation-Automobiles 20 Prepaid Taxes LIABILITIES 21 Accounts Payable 22 Unearned Fees 23 Salaries Payable 24 Taxes Payable EQUITY 31 John Doe, Capital 32 John Doe, Drawing	REVENUE 41 Fees Earned EXPENSES 51 Advertising Expense 52 Insurance Expense 53 Rent Expense 54 Salary Expense 55 Supplies Expense 56 Utilities Expense 57 Depreciation Expense 58 Taxes Expense 59 Miscellaneous Expense

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. Refer to the Chart of Accounts for exact wording of account titles.

PAGE 1

JOURNAL

	DATE	DESCRIPTION	POST. REF.	DEBIT	CREDIT
1		Adjusting Entries
2
3
4
5

B. What is the amount of tax expense for the current year?

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