Property Taxes
Response to the following problem:
The Rosen Corporation was formed on December 12, 2009. It plans to close its books annually each December 31. The corporation is located in Lanmark City and Apple County. The fiscal period of these two governmental units runs from July 1 to June 30. The property tax that they assess on property held on January 1 of each year becomes a lien against the property on July 1. The estimated property taxes for Rosen Corporation for the period July 1, 2010 to June 30, 2011, are $15,300. The tax bill is mailed in October with a requirement that the tax be paid before December 31. The tax bill received on October 30, 2010, for the Rosen Corporation revealed an actual tax of $15,680, and the corporation paid this amount on November 30, 2010. The corporation elects to record monthly property tax adjustments for interim statements required by management.
Required
1. Prepare all property-tax related entries for Rosen for the period July 1, 2010 to June 30, 2011.
2. Show how the preceding information would be reported on the December 31, 2010 balance sheet of Rosen Corporation.