Tony Tools Company has a December 31 year end. The company received its property tax bill for 2021 on March 1, 2021. According to the bill, taxes of $ 24,000 for the year ended December 31, 2021 are due by April 30, 2021. On March 1, Tony will record property tax expense of
A) $ 4,000.
B) $ 8,000.
C) $ 12,000.
D) $ 24,000.

Question

Quizplus · Accepted Answer

The property tax expense should be recognized evenly over the year. By March 1, two months of the year have passed, so the expense recorded should be for January and February, which is 2/12 of $24,000, equaling $4,000.

Tony Tools Company Has a December 31 Year End