Accounting For Governmental & Nonprofit Entities
18th Edition
ISBN: 9781259917059
Author: RECK, Jacqueline L., Lowensohn, Suzanne L., NEELY, Daniel G.
Publisher: Mcgraw-hill Education,
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Textbook Question
Chapter 4, Problem 19EP
On July 1, 2020, the beginning of its fiscal year, Ridgedale County recorded gross property tax levies of $4,200,000. The county estimated that 2 percent of the taxes levied would be uncollectible. As of April 30, 2021, the due date for all property taxes, the county had collected $3,900,000 in taxes. During the current fiscal year, the county collected $53,000 in delinquent taxes and $4,800 in interest and penalties on the delinquent taxes. The county imposed penalties and interest in the amount of $14,500 but only expects to collect $12,800 of that amount. At the end of the fiscal year (June 30, 2021), uncollected taxes, interest, and penalties are reclassified. They are not expected to be collected within the first 60 days for the following fiscal year.
Required
- a. Prepare journal entries to record the tax levy on July 1, 2020, in the General Fund. (Ignore all entries in the governmental activities journal.)
- b. Prepare a summary
journal entry to record the collection of current taxes as of April 30. - c. Prepare a summary journal entry to record the collection of delinquent taxes, interest, and penalties. (You may assume that these amounts had been designated Deferred Inflows of Resources.)
- d. Prepare the journal entry necessary to reclassify the uncollected tax amounts as delinquent. Assume these taxes are not expected to be collected within 60 days of year-end.
- e. Prepare the journal entry necessary to record interest and penalties if they are not expected to be collected soon after year-end.
- f. Suppose that a portion of the delinquent taxes included in part d is collected within 60 days of year-end. Would this information affect the accounting treatment of the taxes?
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For fiscal 2022, Lake City levied a property tax of $270,000. The city estimated that 4% of the tax will not be collected. By fiscal year end, the city, based on the cash already collected, declares the uncollected amount of $10,200 as delinquent. Of the delinquent taxes, $5,700 is estimated to be collected within 60 days of year end and the rest is uncollectible. In fiscal 2023, Lake City collects $4,800 of the delinquent taxes and writes off the remaining delinquent taxes.
Prepare the journal entries to record all the property tax transactions in fiscal 2022.
Determine the amount of tax revenues reported for fiscal 2022.
Prepare the journal entries to record the collection and write-off of delinquent taxes in fiscal 2023.
On July 1, 2020, the beginning of its fiscal year, Ridgedale County recorded gross property tax levies of $4,400,000. The county estimated that 2 percent of the taxes levied would be uncollectible. As of April 30, 2021, the due date for all property taxes, the county had collected $4,090,000 in taxes. During the current fiscal year, the county collected $54,000 in delinquent taxes and $5,000 in interest and penalties on the delinquent taxes. The county imposed penalties and interest in the amount of $14,700 but only expects to collect $12,900 of that amount. At the end of the fiscal year (June 30, 2021), uncollected taxes, interest, and penalties are reclassified. They are not expected to be collected within the first 60 days for the following fiscal year.
Required
Record entries for the above transactions as stated in the individual statements below, and post corresponding information into the Revenues ledger as appropriate.
Prepare journal entries to record the tax levy on July 1,…
Morris County's general fund has the following balances as of the beginning of 2020, pertaining
to unpaid 2019 taxes:
Property taxes receivable
Allowance for uncollectible taxes
$5,000,000
(3,600,000)
During 2020, the County collects $1,300,000 related to 2019 taxes and writes off the rest.
Property tax bills for 2020 in the amount of $90.000,000 are sent out. The county estimates that
5% are uncollectible. The County collects $85,200,000 of 2020 taxes. Of the remaining $4,800,000
in uncollected taxes for 2020, the County estimates that $500,000 will be collected within 60 days
after the end of the year, and $100,000 are expected to be collected more than 60 days from
year-end. The remainder are uncollectible.
Required
Prepare the journal entries to record the above events
Chapter 4 Solutions
Accounting For Governmental & Nonprofit Entities
Ch. 4 - Last month a local government collected property...Ch. 4 - When preparing the statement or schedule of...Ch. 4 - Prob. 3QCh. 4 - Prob. 4QCh. 4 - If the General Fund of a certain city needs...Ch. 4 - Prob. 6QCh. 4 - Explain why some governments may account for...Ch. 4 - Prob. 8QCh. 4 - Prob. 9QCh. 4 - Prob. 10Q
Ch. 4 - A government reports Deferred Inflows of...Ch. 4 - Prob. 13CCh. 4 - Prob. 15CCh. 4 - Choose the best answer. When equipment is...Ch. 4 - Prob. 17.2EPCh. 4 - Goods for which a purchase order had been placed...Ch. 4 - Prob. 17.4EPCh. 4 - Garden City has calculated that General Fund...Ch. 4 - Prob. 17.6EPCh. 4 - Prob. 17.7EPCh. 4 - Prob. 17.8EPCh. 4 - Carroll City levies 200,000 of property taxes for...Ch. 4 - Prob. 17.10EPCh. 4 - During the current year, the City of Hickory Hills...Ch. 4 - On July 1, 2020, the beginning of its fiscal year,...Ch. 4 - Prob. 20EPCh. 4 - Prob. 21EPCh. 4 - At the end of the current fiscal year, the City of...Ch. 4 - The City of Waterville applied for a grant from...Ch. 4 - The following transactions occurred during the...Ch. 4 - The following transactions affected various funds...Ch. 4 - The following events and transactions relate to...Ch. 4 - The City of Castletons General Fund had the...Ch. 4 - Prob. 28EP
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