For fiscal 2019, Victor Town levied a property tax of $350,000 that was expected to be...

For fiscal 2019, Victor Town levied a property tax of $350,000 that was expected to be 95% collectible. By fiscal year end, cash collection is $318,000 and the town declares the uncollected amount as delinquent. Of the delinquent taxes, $8,700 is estimated to be collected within 60 days of year end and the rest is uncollectible. In fiscal 2020, Victor Town collects $9,200 of the delinquent taxes and writes off the remaining delinquent taxes.

a. Prepare the journal entries to record all the property tax transactions in fiscal 2019.

b. Determine the amount of tax revenue reported for fiscal 2019.

c. Prepare the journal entries to record the collection and write-off of delinquent taxes.

Solutions

Expert Solution

Solution (a)	Journal entries to record the property tax transactions in fiscal 2019

Date	Accounts	Debit	Credit

	Property taxes receivable	350000
	Property tax revenue – current year		332500
	Allowance for uncollectibles		17500
	(to record the property tax)

	Cash	318000
	Deferred inflow of resources	8700
	Allowance for uncollectibles	5800
	Property taxes receivable		332500
	(to record the amount collected, delinquent and uncollected)

Solution (b)	Amount of tax revenue reported for fiscal 2019
	=350000*95%
	=332500

Solution (c)	Journal entries to record the collection and write off of dlinqunent taxed.

Date	Accounts	Debit	Credit
2020	Cash	9200
	Deferred inflow of resources		8700
	Allowance for uncollectibles		500
	( to record the collection and reversal of delinquent taxes and written off taxes)

ekkarill92 answered 2 years ago

Next > < Previous

Related Solutions

During the current year, Knoxx County levied property taxes of $2,000,000, of which 1% is expected...

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...

A. Suppose a 10% tax is levied on the sale of sugary beverages. This tax is...

A. Suppose a 10% tax is levied on the sale of sugary beverages. This tax is collected from sellers of the drinks. A critic of the tax argues that sellers will shift the entire tax to buyers and therefore be no worse off. Evaluate this argument by explaining and illustrating (a graph) the market conditions that would have to prevail for the prediction to be correct. If the critic is correct, how successful will the tax be regarding decreasing obesity...

On July 1, 2019, the first day of its 2020 fiscal year, the Town of Bear...

On July 1, 2019, the first day of its 2020 fiscal year, the Town of Bear Creek issued at par $4,200,000 of 8 percent term bonds to renovate a historic wing of its main administrative building. The bonds mature in five years on July 1, 2024. Interest is payable semiannually on January 1 and July 1. As illustrated in the table below, a sinking fund is to be established with equal semiannual additions made on June 30 and December 31....

Determining of property tax rate The county legislature approved the budget for 2019. Revenues from property...

Determining of property tax rate The county legislature approved the budget for 2019. Revenues from property taxes are budgeted at $800,000. According to the county assessor, the assessed valuation of all of the property in the county is $50 million. Of this amount, property worth $10 million belongs to the federal government or to religious organizations and, therefore, is not subject to property taxes. In addition, certificates for the following exemptions have been filed: Homestead $2,500,000 Veterans 1,000,000 Old age,...

On January 1, 2019, the Town of Floyd issued $ 8,000,000 of 4% tax supported bonds....

On January 1, 2019, the Town of Floyd issued $ 8,000,000 of 4% tax supported bonds. The bonds are dated January 1, 2019 with interest payment dates of June December 31, 2019. The bonds were sold at a $78,000 premium that was transferred to the Debt Service Fund from the capital projects fund to be used to fund the first payment. Cash sufficient to cover interest and principal payments for the year less the premium is transferred from the General...

Suppose there is a $1.50 per unit tax levied on sellers

Consider the market below a. Suppose there is a $1.50 per unit tax levied on sellers. Draw the after-tax supply curve. Instructions: Use the tool provided (S2) to draw the after-tax supply curve. Be sure your endpoints are at Q = 0 and Q = 100 b. Plot the after-tax price paid by consumers and the after-tax price paid by sellers. Instructions: Use the tools provided to draw the after-tax price paid by consumers (After-tax Pc) and the after-tax price paid by...

If a tax is levied on the buyers of dog food, then buyers will bear the...

If a tax is levied on the buyers of dog food, then buyers will bear the entire burden of the tax. sellers will bear the entire burden of the tax. buyers and sellers will share the burden of the tax. the government will bear the entire burden of the tax.

“When a tax is levied on a good, a share of it is paid by both...

“When a tax is levied on a good, a share of it is paid by both the consumer and producer. In the case of cigarettes however much more of the burden of the tax is paid by consumers, even though the tax is levied on the suppliers of cigarettes.” Why might this be the case? In your answer explain both parts (sentences) of this statement. If the price of a packet of cigarettes increased by 10%, and in light of...

“When a tax is levied on a good, a share of it is paid by both...

“When a tax is levied on a good, a share of it is paid by both the consumer and producer. In the case of cigarettes, however much more of the burden of the tax is paid by consumers, even though the tax is levied on the suppliers of cigarettes.”Why might this be the case? In your answer explain both parts (sentences) of this statement. If the price of a packet of cigarettes increased by 10%, and in light of your...

The City of Roanoke adopted the following budget for fiscal year 2019: Anticipated Revenues: Property...

The City of Roanoke adopted the following budget for fiscal year 2019: Anticipated Revenues: Property Taxes Licenses and Permits Fines and Forfeits Total - $6,060,000 402,000 308,000 $6,770,000 Approved spending levels: General Government Public Safety Public Works Total - $1,860,000 2,500,000 1,785,000 $6,145,000 In addition, the City reported the following actual amounts for the same fiscal year. Revenues: Property Taxes Licenses and Permits Fines and Forfeits Total - $5,862,000 391,000 311,000 $6,564,000 Expenditures –...

Subjects