Advanced Accounting 11th Edition by Paul Fischer,William Tayler, Rita Cheng

Exercise 18

Agency fund, effect on various funds/groups. In compliance with a newly enacted state law, Tilburg County assumed the responsibility of collecting all property taxes levied within its boundaries as of July 1, 2018. The following composite property tax rate per $100 of net assessed valuation was developed for the fiscal year ending June 30, 2019:
All property taxes are due in quarterly installments and, after being collected, are distributed to the governmental units represented in the composite rate. To administer the collection and distribution of such taxes, Tilburg County has established a tax agency fund. Additional information:
a. To reimburse itself for estimated administrative expenses of operating the tax agency fund, the county is to deduct 2% from the tax collections for Reed City and Newport Township. The total amount deducted is to be remitted to the Tilburg County General Fund.
b. Current-year tax levies to be collected by the tax agency fund are as follows:
c. In its original computation of the gross levy, Newport Township made an error that will reduce both the gross and estimated amounts to be collected by $10,000.
d. As of September 30, 2018, the tax agency fund has received $1,440,000 in first-quarter payments. On October 1, the agency fund made a distribution to the three governmental units on the basis of the composite property tax rate.