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What amount should be reported as an escrow liability

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Reference no: EM132786937

On the first day of each month, Bell Company received from Kaye Company an escrow deposit of P250,000 for real estate taxes. The entity recorded the P250,000 in an escrow account.

Kaye's 2020 real estate tax is P2,800,000, payable in equal installments on the first day of each calendar quarter.

On January 1, 2020, the balance in the escrow account was P300,000.

Problem 1: On September 30, 2020, what amount should be reported as an escrow liability?

a. 1,150,000

b. 450,000

c. 850,000

d. 150,000

Reference no: EM132786937

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