KẾ TOÁN CÔNG
GENERAL FUND JOURNAL ENTRIES (PROPERTY
TAXES)
General fund journal entries (property taxes)
The 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)
• 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.
Allowance for uncollectible taxes is the contra account for taxes receivable account.
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
Taxes receivable – current
600,000
600,000
Allowance for uncollectible current taxes
Allowance for uncollectible delinquent taxes
To reclassify uncollected taxes as delinquent.
50,000
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 receivable - 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
Deferred revenue
312,250
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
Less: Estimated uncollectible delinquent taxes
(600,000 – 150,000- 5,000 = $445,000)
$ 445,000
45,000 $400,000
How will property taxes be presented in the December 31, 2014, balance sheet?
Jedville Township
Partial Balance Sheet
December 31, 2014
Assets
Cash
$2,050,000
Taxes receivable - delinquent
$450,000
Less: Estimated uncollectible delinquent taxes
Total Asset
45,000
400,000
$2,450,000
Liabilities and fund balances
Liabilities:
Deferred revenue
$312,250
Fund balances:
Fund balance
Total Liabilities and fund balance
2,137,500
$2,450,000
What 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)
14