• November 1,2014-A$5,000 tax receivable account is determined to be uncollectible and is written off.. General fund journal entries property taxes... Prepare summary journal entries for
Trang 1KẾ TOÁN CÔNG
Trang 2The following events and transactions relate to the levy and collection of property taxes for Jedville 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)
Trang 3• 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?
General fund journal entries (property taxes)
Trang 4March 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
Allowance for uncollectible current taxes 50,000
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.
Allowance for uncollectible taxes is the contra account for taxes receivable account.
Trang 5• May 4, 2014
To record collection of current property taxes
Taxes receivable – current 600,000
Allowance for uncollectible current taxes 50,000
Allowance for uncollectible delinquent taxes 50,000
To reclassify uncollected taxes as delinquent
May 4, 2014 - $1,900,000 in taxes have been collected The remaining receivables are reclassified as delinquent.
Trang 6• May 5-December 31, 2014
Taxes receivable – delinquent 150,000
To record collection of past – due taxes
May 5 to December 31, 2014 - An additional $150,000 of taxes are collected.
Trang 7• November 1, 2014
Allowance for uncollectible taxes — delinquent 5,000
Taxes receivable – delinquent 5,000
To write off tax receivable determined to be uncollectible
November 1,2014 – A $5,000 tax receivable account is determined to be uncollectible and is written off.
Trang 8• January 1, 2015 — February 28, 2015
To record collection of 2014 taxes
January 1, 2015 to February 28, 2015 - An additional $87,750 of 2014 taxes are collected.
Trang 9Governments 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)
Adjustment procedures
Trang 10How will property taxes be presented in the December 31, 2014, balance sheet?
Jedville Township
Partial Balance Sheet December 31, 2014
Assets
Taxes receivable — delinquent $ 445,000
Less: Estimated uncollectible delinquent taxes 45,000 $400,000
(600,000 – 150,000- 5,000 = $445,000)
Trang 11How will property taxes be presented in the December 31, 2014, balance sheet?
Jedville Township
Partial Balance Sheet December 31, 2014
Assets
Less: Estimated uncollectible delinquent taxes 45,000 400,000
Liabilities and fund balances
Liabilities:
Fund balances:
Trang 12What amount of property tax revenues should be reported for 2014?
Revenue would equals collected amounts plus amounts collected within 60 day period
($1,900,000 + $150,000 + $87,750 = $2,137,750)
Trang 1414