Question

Sally is buying a home and the closing date is set for April 20th. The annual property taxes are $1,234.00 and have not been paid yet. How much will the buyer be credited and the seller be debited?

Answer 1

Therefore$360.572 as a credit to the buyer and debit to the seller

Step-by-step explanation:

Daily tax rate = annual property taxes / number of days in a year = $1234 / 365 = $3.3808

Daily tax rate = $3.3808 per day.

Number of days from beginning of the year to April 20th = January(31 days) + February (28 days) + March (31 days) + April (19 days) = 31 + 28 + 31 + 19 = 109 days.

Tax rate for 109 days = 109 days × $3.308 per day = $360.572

Therefore$360.572 as a credit to the buyer and debit to the seller