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Course: Government and Non Profit Accounting
Exercise 1
The Town of Hail had the following transactions.
Required:
Prepare the general journal entries necessary to record the budget and operating transactions 1- 5.
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Case Study Dammam is the capital of the Eastern Province of Saudi Arabia. Dammam is the largest city in the Eastern Province, and the sixth largest in Saudi Arabia, after Riyadh, Jeddah, Mecca, Medina and Taif . Dammam is a major administrative center for the Saudi oil industry. Together with the nearby cities of Dhahran and Al Khobar, Dammam forms part of the Dammam Metropolitan Area, which is commonly known as greater Dammam.
Dammam Municipal Corporation is preparing its budget for calendar year 2020. After estimating revenues from all different sources like property tax, the Dammam Municipality came to a conclusion that it will collect SAR 7,000,000 and also estimated uncollectible property taxes will be SAR 70,707. In addition, Dammam Municipality is having a total estimated property at the beginning of beginning of 2020 is SAR 65,000,000 and it is expected that there will be reduction in assessed value from appeals to an amount of SAR 200,000. The corporation Assessed value of property, not subject to tax is SAR 1,400,000, and Adjustments to assessed values for senior citizen exemptions is SAR 1,000,000
Required:
a. Compute the gross amount of property taxes required to be levied.
b. Compute the tax rate per SAR100 of net assessed valuation.
c. Determine the amount of property tax that a home owner whose property is assessed at SAR35,000 will have to pay.
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