Question

On July 1, 2017, the beginning of its fiscal year, Ridgedale County recorded gross property tax levies of $3,700,000. The county estimated that 4 percent of the taxes levied would be uncollectible. As of April 30, 2018, the due date for all property taxes, the county had collected $3,425,000 in taxes. The county imposed penalties and interest in the amount of $14,000, but only expects to collect $12,550 of that amount. At the end of the fiscal year (June 30, 2018) the county had collected $50,500 in delinquent taxes and $4,300 in interest and penalties on the delinquent taxes.

Required
a-1.	Prepare journal entries to record the tax levy on July 1, 2017 in the General Fund. (If no entry is required for a transaction/event, select "No Journal Entry Required" in the first account field.)

Answer 1

Q a-1	Ridgedale County
	General Fund
Date	General Journal	Dr Amount $	Cr. Amount $
July 1 2017	Property Tax Receivable -Current	37,00,000
	To Allowance for Uncollectible                                                      Current Property Tax Revenue A/c		1,48,000
	To Property Tax Revenue A/c		35,52,000
	(Being the entry to record the allowance for uncollectible Property tax revenue at 4% of $ 37,00,000 to the Allowance for Uncollectible Property Tax Revenue A/c. The amount collectible is credited to the Property Tax Revenue A/c)

Note1 :

Computation of Allowance for Uncollectible Curren Property Tax

A. Total Property Tax Receivable as on July 1 2017 : $ 37,00,000

Less:

B. Estimate of Property Tax estimated to be uncollectible @ 4% * A = $ 148,000

C. Therefore, NET PROPERTY TAX REVENUE AS ON JULY 1, 2017 (A-B) = $ 35,52,000

In the Subsidiary Ledger, i.e., Revenue Ledger, Property Taxes will appear as Cr. 39,90,000

2. As the question a-1 has specifically asked only for the entry/(ies) for Tax Ley as on July 1, 2017 in the General Fund A/c, only one entry is applicable. The question has not asked for other entries dated April 30, 2018 and June 30, 2018. Hence, these entries have not been passed.