A city that has property taxes of $720,000 (of which 10 percent are estimated to be uncollectible) which are levied in October 2016 to finance the activities of the fiscal year 2017. During 2017, cash collections related to property taxes levied in October 2016 were $600,000. In 2018 the following amounts related to the property taxes levied in October 2016 were collected: January $30,000; March $6,000. For the fiscal year ended 12/31/17, what amount should be recognized as property tax revenues related to the 2016 levy on the government-wide financial statements?
A) $720,000.
B) $648,000.
C) $630,000.
D) $600,000.

Question

Quizplus · Accepted Answer

The correct amount to be recognized as property tax revenues related to the 2016 levy on the government-wide financial statements for the fiscal year ended 12/31/17 is $648,000. This is because the total levy is $720,000, and 10 percent is estimated to be uncollectible, leaving 90 percent or $648,000 as the amount expected to be collected and recognized as revenue.

A City That Has Property Taxes of $720,000 (Of Which