Question

Using Governmental Accounting enter the effects of the Harvey City General Fund in the transactions columns of the worksheet. (A different solution approach may be used if desired by your professor.)

19. The city levied interest and penalties of $35,000 on the overdue taxes receivable. Interest and penalties of $5,600 are expected to prove uncollectible.

20. The city collected $216,000 of delinquent taxes receivable and $27,000 of interest and penalties receivable.

21. The city wrote off uncollectible taxes receivable of $23,000 and related interest and penalties of $4,800.

22. General government equipment with an original cost of $300,000 and accumulated depreciation of $187,000 was sold for $72,000, which was deposited in the General Fund.

23. The city formalized tax liens against properties that had claims against them for delinquent taxes of $12,000 and interest and penalties of $800. The estimated salable value of the properties was $14,000.

24. The following revenue-related information was available at year end:

    1. $144,000 of the December 31, 20X4, balance of delinquent taxes receivable and $34,400 of the December 31, 20X4, balance of interest and penalties receivable are not expected to be collected within the first 60 days of 20X5. (The January 1, 20X4, delinquent taxes receivable balance included $79,100 of taxes that were collected after the first 60 days of 20X4, and the January 1, 20X4, interest and penalties receivable balance included $20,900 of interest and penalties on taxes that were collected after the first 60 days of 20X4.) (Hint: Deferred Revenues must be adjusted.)

    2. Accrued interest receivable on investments at December 31, 20X4, totals $2,700.

    3. The fair value of General Fund investments at December 31, 20X4, is $800 more than their book value.

Answer 1

	Governmental accounting for Harvey General Fund
1)	Interest and Penalties Receivable	$       35,000.00
	Allowance for Uncollectible Interest and Penalties	$         5,600.00
	Revenues		$       29,400.00
	Recorded Entry for the Interest and Penalties receivable
2)	Cash	$    243,000.00
	Taxes Receivable - Deliquent		$    216,000.00
	Interest and Penalties Receivable		$       27,000.00
	Recorded the receipt of taxes , interest and penalties.
3)	Allowance for Uncollectible Taxes	$       23,000.00
	Allowance for Uncollectible Interest and Penalties	$         4,800.00
	Taxes Receivable		$       23,000.00
	Interest and Penalties Receivable		$         4,800.00
	Recorded entry for writing off uncollectibles .
4)	Sale of fixed assets	$       72,000.00
	Cash		$       72,000.00
	( Recorded deposit of sale proceeds of equipment)
5)	Tax Liens Receivable	$       12,800.00
	Taxes Receivable – Delinquent		$       12,000.00
	Interest & Penalties Receivable –   Delinquent Taxes	$             800.00

	No entry for sale as the sale has not been executed yet

6)	Unavailable Revenue	$    100,000.00
	Revenue		$    100,000.00
	(Adjustment of opening taxes and interest and penalties)
(	79100+20900 Revenues $ 178400 Unavailable revenue $178400 Unavailable revenue received post 6 months recorded 144000+34400)

7	Accrued Interest	$         2,700.00
	Revenues – Accrued interest		$         2,700.00
	Recorded accrued interest on investments
	Investments	$             800.00
	Revenues – Increase in Fair Value of Investments		$             800.00
	Recorded increase in fair value of investment