Final answer:
The buyer is responsible for the prorated portion of the real estate taxes from the closing date forward, which amounts to $1,933.20, while the seller owes $946.80 for their portion up to the closing date.
Step-by-step explanation:
When real estate taxes are prorated at closing, it means that the seller is responsible for the property taxes up until the day of closing, and the buyer is responsible from the closing date forward. In the case provided, the annual real estate taxes are $2,880. Since the sale closes on May 1st, we first calculate the seller's portion. The taxes for each day amount to $2,880 divided by 365 days, which equals $7.89 per day. By May 1st, 120 days have passed in the year, and thus the seller is responsible for 120 days' worth of taxes. Multiplying the daily tax rate by 120 days gives us $7.89 * 120 = $946.80. The balance of the annual tax is then the buyer's responsibility, which is $2,880 - $946.80 = $1,933.20.
Hence, the correct settlement sheet entry for the proration of the taxes would be that the buyer owes $1,933.20, and the seller owes $946.80. Answer options do not match this calculation; therefore, it's possible there might be a typo or calculation error in the options provided.