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On July 1, 2017, the beginning of its fiscal year, Ridgedale County recorded gross property tax...

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.)

Solutions

Expert Solution

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.

jeff jeffy answered 1 year ago
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