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In: Accounting

During the current year, the City of Plattsburgh recorded the following transactions related to its property...

During the current year, the City of Plattsburgh recorded the following transactions related to its property taxes:

  1. Levied property taxes of $6,600,000, of which 2 percent is estimated to be uncollectible.
  2. Collected current property taxes amounting to $5,975,000.
  3. Collected $53,000 in delinquent taxes and $4,800 in interest and penalties on the delinquent taxes. These amounts had been recorded as Deferred Inflows of Resources in the prior year.
  4. Imposed penalties and interest in the amount of $7,500 but only expects to collect $6,200 of that amount.
  5. Reclassified uncollected taxes and interest and penalties as delinquent. These amounts are not expected to be collected within the first 60 days of the following fiscal year.

Required

  1. Prepare journal entries to record the property tax transactions in the General Fund.
  2. Prepare journal entries to record the property tax transactions in the governmental activities journal.
  3. Determine the amount of property tax revenue recognized during the current year in the General Fund and at the government-wide level.

Solutions

Expert Solution

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Part 1 General Fund
Event Account Debit Credit
1 Tax Receivable-Current $6,600,000
     Allowance for uncollectible current taxes $       132,000
     Revenue $    6,468,000
2 Cash $5,975,000
     Tax Receivable-Current $    5,975,000
3a Cash $     57,800
     Tax Receivable-Delinquet $          53,000
     Interest and Penalities receivable on Tax $            4,800
3b Deferred inflows of resource-Unavailable revenue $     57,800
     Revenues $          57,800
4 Interest and Penalities receivable on Tax $        7,500
     Allowance for uncollectible Interst and Penalties $            1,300
     Revenue $            6,200
5a Tax Receivable-Delinquet $   625,000
Allowance for uncollectible current taxes $   132,000
     Tax Receivable-Current $       625,000
     Allowance for uncollectible Delinquent taxes $       132,000
5b Revenues $   499,200
     Deferred inflows of resource-Unavailable revenue $       499,200
Part b
Event Account Debit Credit
1 Tax Receivable-Current $6,600,000
     Allowance for uncollectible current taxes $       132,000
     General Revenue-Property Tax $    6,468,000
2 Cash $5,975,000
     Tax Receivable-Current $    5,975,000
3 Cash $     57,800
     Tax Receivable-Delinquet $          53,000
     Interest and Penalities receivable on Tax $            4,800
4 Interest and Penalities receivable on Tax $        7,500
     Allowance for uncollectible Interest and Penalties $            1,300
     General revenue-Interest and penalties on Delinquent taxes $            6,200
5 Tax Receivable-Delinquet $   625,000
Allowance for uncollectible current taxes $   132,000
     Tax Receivable-Current $       625,000
     Allowance for uncollectible Delinquent taxes $       132,000
Part c Entry No General Fund Government wide revenue
Tax Levy                   1 $    6,468,000 $                            6,468,000
Add: Delinquent Collection                   3 $          57,800
Less: Unavailbale Revenue                   5 $      -499,200
Current Year Revenue $    6,026,600 $                            6,468,000

ekkarill92 answered 1 year ago
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