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 • May 4, 2014-$1,900,000 in taxes have been collected The remaining receivables are reclassified as delinquent • May 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 Prepare summary journal entries for the events and transactions described for the Jedville general fund How will property taxes be presented in the December 31, 2014, balance sheet? 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 • 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 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