Question

The county collector of Suncoast County is responsible for collecting all property taxes levied by funds and governments within the boundaries of the county. To reimburse the county for estimated administrative expenses of operating the tax custodial fund, the custodial fund deducts 1.5 percent from the collections for the town, the school district, and the other towns. The total amount deducted is added to the collections for the county and remitted to the Suncoast County General Fund.

The following events occurred during the year:

1. Current-year tax levies to be collected by the custodial fund were

County General Fund	$	10,333,000
Town of Bayshore General Fund		4,840,000
Suncoast County Consolidated School District		6,550,000
Other towns		3,120,000
Total	$	24,843,000

2. $13,700,000 of current taxes was collected during the first half of the year.
3. Liabilities to all funds and governments as a result of the first half-year collections were recorded. (A schedule of amounts collected for each participant, showing the amount withheld for the county General Fund and net amounts due the participants, is recommended for determining amounts to be recorded for this transaction.)
4. All cash in the tax custodial fund was distributed.
5. All additions and deductions were recorded by the custodial fund. Additions and deductions are aggregated because resources are held less than three months.

Prepare journal entries for each of the foregoing transactions that affected the tax custodial fund.

(need help with #5)

Answer 1

a.

SUNCOAST COUNTY

TAX CUSTODIAL FUND

GENERAL JOURNAL

Debits   Credits

1. TAXES RECEIVABLE FOR OTHER FUNDS

AND GOVERNMENTS¾CURRENT 24,843,000

DUE TO OTHER FUNDS AND GOVERNMENTS 24,843,000

2. CASH 13,700,000

TAXES RECEIVABLE FOR OTHER FUNDS

AND GOVERNMENTS¾CURRENT 13,700,000

3. DUE TO OTHER FUNDS AND GOVERNMENTS 13,700,000

DUE TO COUNTY GENERAL FUND 5,818,294

DUE TO TOWN OF BAYSHORE 2,629,046

DUE TO SUNCOAST COUNTY CONSOLIDATED

SCHOOL DISTRICT 3,557,903

DUE TO VARIOUS TOWNS 1,694,757

Shares:	COMPUTATION	Taxes Collected	1.5% Fee	Agency's Liability
County	10,333,000/24,843,000 × 13,700,000	= 5,698,269	+ 120,025	5,818,294
Bayshore	4,840,000/24,843,000 × 13,700,000	= 2,669,082	− 40,036	2,629,046
School	6,550,000/24,843,000 × 13,700,000	= 3,612,084	− 54,181	3,557,903
Towns	3,120,000/24,843,000 × 13,700,000	= 1,720,565	− 25,808	1,694,757

Debits   Credits

4. DUE TO COUNTY GENERAL FUND 5,818,294

DUE TO TOWN OF BAYSHORE 2,629,046

DUE TO SUNCOAST COUNTY CONSOLIDATED

SCHOOL DISTRICT 3,557,903

DUE TO VARIOUS TOWNS 1,694,757

CASH 13,700,000

5. DEDUCTIONS—ADMINISTRATIVE FEE 120,025

DEDUCTIONS—PAYMENTS OF PROPERTY   

TAXES TO OTHER GOVERNMENTS 7,881,706

ADDITIONS—PROPERTY TAX COLLECTIONS

FOR OTHER GOVERNMENTS 8,001,731

b.

SUNCOAST COUNTY

GENERAL FUND

GENERAL JOURNAL

  

1. TAXES RECEIVABLE¾CURRENT 10,333,000

ESTIMATED UNCOLLECTIBLE CURRENT TAXES 413,320

REVENUES 9,919,680

4. CASH 5,818,294

TAXES RECEIVABLE¾CURRENT 5,698,269

REVENUES (COLLECTION FEES) 120,025

c.      

TOWN OF BAYSHORE

GENERAL FUND

GENERAL JOURNAL

   Debits   Credits

1. TAXES RECEIVABLE¾CURRENT 4,840,000

ESTIMATED UNCOLLECTIBLE CURRENT TAXES 96,800

REVENUES 4,743,200

4. CASH 2,629,046

EXPENDITURES (COLLECTION FEES) 40,036

TAXES RECEIVABLE¾CURRENT 2,669,082

d.   

The tax custodial fund would prepare a statement of tax custodial fund net position reflecting the asset and liability balances of the fund. It would also prepare a statement of changes in tax custodial net position to reflect the additions and deductions during the period. Since the fund holds the resources for less than three months it need only report the aggregate sources (property taxes) and types (payments and fees). Additionally, the fund would be combined with any other custodial funds that Suncoast County has and the total of the assets and liabilities, and the total of additions and deductions for the custodial funds would be shown in a single custodial fund column on the statement of fiduciary net position and the statement of changes in fiduciary net position, respectively.