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K TON CNG

GENERAL FUND JOURNAL ENTRIES

(PROPERTY TAXES)
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THNH VIN:

Nguyn Hng Giang


Nguyn Th Qunh Hoa
Nguyn Th Ngc Oanh
Nguyn Th Kim Phc
Nguyn Th Thy Phng
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Nguyn Th Thanh Hoa
La Ngc Minh Thun
Trn Th Hoi Thng
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General fund journal entries (property taxes)


The following events and transactions relate to the levy and
collection of propefi taxes for ledville Township:
March 21, 2014-Property tax bills for $2,500,000 are sent to
property owners. An estimated 2% of the property tax levies are
uncollectible. The taxes are due on May 1.
May 4, 2014-$1,900,000 in taxes have been collected. The
remaining receivables are reclassified as delinquent.
May 5 to December 31, 2014-An additional $150,000 of taxes are
collected.
November 1,2014-A$5,000 tax receivable account is determined to
be uncollectible and is written off.
January 1, 2015, to February 28, 2015-An additional $87,750 of
2014 taxes are collected.

General fund journal entries (property taxes)


REQUIRED
1. Prepare summary journal entries for the events and
transactions described for the Jedville general fund.
2. How will property taxes be presented in the
December 31, 2014, balance sheet?
3. What amount of property tax revenues should be
reported for 2014?

March 21, 2014-Property tax bills for $2,500,000 are


sent to property owners. An estimated 2% of the
property tax levies are uncollectible. The taxes are due
on May 1.
March 21, 2014
Taxes receivable current

2,500,000

Allowance for uncollectible current taxes


Revenue

50,000

2,450,000

This entry assumes that 2% of property tax levies are not collectible and
that the rest of the taxes will be collected either during the current year or
within not more than 60 days thereafter it recognizes revenue for 98% of
the amount billed.
Uncollectible taxes are revenue adjustments

May 4, 2014 - $1,900,000 in taxes have been collected.


The remaining receivables are reclassified as
delinquent.
May 4, 2014

Cash 1,900,000
Taxes receivable current

1,900,000

To record collection of current property taxes


Taxes receivable delinquent

600,000

Allowance for uncollectible current taxes 50,000


Taxes receivable current

600,000

Allowance for uncollectible delinquent taxes


To reclassify uncollected taxes as delinquent.

50,000

May 5 to December 31, 2014 - An additional $150,000


of taxes are collected.

May 5-December 31, 2014


Cash

150,000

Taxes receivable delinquent


To record collection of past due taxes

150,000

November 1,2014 A $5,000 tax receivable account is


determined to be uncollectible and is written off.

November 1, 2014
Allowance for uncollectible taxes delinquent 5,000
Taxes receivable delinquent

5,000

To write off tax receivable determined to be uncollectible

January 1, 2015 to February 28, 2015 - An additional


$87,750 of 2014 taxes are collected.
January 1, 2015 February 28, 2015
Cash

87,750

Taxes reveivable - delinquent


To record collection of 2014 taxes

87,750

Adjustment procedures
Governments must record a liability, instead of revenue for taxes not
collected by year-end or within 60 days thereafter. Therefore taxes
became legally available to finance expenditures as deferred taxes

Revenue

312,250

Deferred revenue

312,250

(= $400,000 $87,750)

How will property taxes be presented in the


December 31, 2014, balance sheet?
Jedville Township
Partial Balance Sheet
December 31, 2014
Assets
Taxes receivable delinquent

$ 400,000

(net of $45,000 estimated uncollectible taxes)


( = 600,000 150,000 5,000 45,000)

How will property taxes be presented in the


December 31, 2014, balance sheet?
Jedville Township
Partial Balance Sheet
December 31, 2014

Assets$2,450,000
Cash $2,050,000
Taxes receivable delinquent (net)

$400,000

Liabilities and fund balance $2,450,000


Liabilities
Deferred revenue
Fund balance

$312,250

$2,137,500

What amount of property tax revenues should be


reported for 2014?
Revenue would equal collectible amounts plus amounts
collected within 60 day period.
($1,900,000 + $150,000 + $87,750 = $2,137,750)

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