The general fund of the Town of Dean levied property taxes of $3,000,000 for the fiscal year beginning on January 1,20X8.It was estimated that 1% of the levy would be uncollectible.During the period January 1,20X8,through December 31,20X8,$2,960,000 of the property tax levy was collected.At December 31,20X8,Dean estimated that $10,000 of property taxes levied in 20X8 would be collected during the first 60 days of 20X9.What amount of property tax revenue should be reported by the general fund for the year ended December 31,20X8?
A)$2,960,000
B)$3,000,000
C)$2,970,000
D)$2,990,000

Question

Quizplus · Accepted Answer

The estimated uncollectible amount is 1% of the levy, which is $30,000 ($3,000,000 x 1%). Therefore, the total amount of property tax revenue that should be recognized for the year ended December 31, 20X8 is the levy of $3,000,000 minus the estimated uncollectible amount of $30,000, which is $2,970,000. Since $2,960,000 of the levy was collected during the year and an additional $10,000 is expected to be collected in the first 60 days of the following year, the total revenue recognized for the year ended December 31, 20X8 is $2,970,000.

The General Fund of the Town of Dean Levied Property