October 30, 2016 admin

Taxes—Real Estate

Expenses

TAXES—REAL ESTATE EXPENSE ACCOUNT
8400/8405/8406

ACCOUNT EXPLANATION
Expense of real estate taxes on property owned by the dealership and used in the automobile business.
TRANSACTIONS
  Jrnl. Dr. Cr.
  Monthly write-off of prepaid property taxes SE
    Taxes—Real Estate 8400
    Taxes—Real Estate—Service—QL/FL/QCSC 8405
    Taxes—Real Estate—Parts—QL/FL/QCSC 8406
      Prepaid Taxes—Other 1550
             
  Monthly accrual of real estate taxes SE
    Taxes—Real Estate 8400
    Taxes—Real Estate—Service—QL/FL/QCSC 8405
    Taxes—Real Estate—Parts—QL/FL/QCSC 8406
      Accrued Taxes—Real & Personal Property 2401
COMMENTS
  • Real and personal property taxes become liabilities on dates specified by the applicable government authority. Various accounting methods are permissible in recording these taxes. Accounting advice and tax counsel should be obtained as to the method adopted for book and/or tax purposes and it should be followed consistently from year to year.
  • Taxes on real estate not used in the automobile business should be recorded in Account 9450, Other Deductions.
  • For departmentalization purposes, taxes on real estate occupied by a specific operating department should be charged to that department. Taxes on an integrated dealership facility should be distributed to departments as provided in Departmentalization.