Author Question: The City of Jonesboro allows discounts on taxes. Specifically, taxpayers get a 1 discount on the ... (Read 39 times)

Yolanda · **on:** Jul 6, 2018

The City of Jonesboro allows discounts on taxes. Specifically, taxpayers get a 1 discount on the total tax if it is paid within one month of the initial levy.

What would the journal entry be to record the levy of 700,000 if the government anticipates there will be a 2 uncollectible rate and it is anticipated that the discounts will be 5,000?

Debit Credit
A. Taxes Receivable
Allowance for Uncollectible Taxes
Allowance for Discounts
Revenues 700,000
14,000
5,000
681,000
B. Taxes Receivable
Revenues 700,000 700,000
C. Taxes Receivable
Expenditures
Allowance for Uncollectible Taxes
Revenues 695,000
5,000

14,000
686,000
D. Taxes Receivable
Allowance for Uncollectible Taxes
Revenues 700,000
14,000
686,000

Question 2

A net income will result if gross profit is greater than
a. purchases.
b. cost of goods available for sale.
c. cost of goods sold.
d. operating expenses.
e. ending inventory.