Question

During the current year, Knoxx County levied property taxes of $2,000,000, of which 1% is expected to be uncollectible. The following amounts were collected during the current year:

Prior year taxes collected within the first 60 days of the current year	$     50,000
Prior year taxes collected between 60 and 90 days into the current year	120,000
Current year taxes collected in the current year	1,800,000
Current year taxes collected within the first 60 days of the subsequent year	80,000

What amount of property tax revenue should Knoxx County report in its government-wide statement of activities?

$2,000,000

$1,980,000

$1,800,000

$1,970,000

Answer 1

Answer : $1,980,000.

Explanation : As per GASB St. 33 , entity - wide or government - wide statements are to be presented and reported using full accrual basis. Thus the expected noncollectable amount ie $2,000 ($200,000 * 1 %) should be deducted from the revenue & the resultant adjusted revenue of $1,980,000 ($200,000 - $2,000) should be reported. The collection during the year is irrelevant for determining  property tax revenue