Ledford County levied property taxes of $10,000,000, 2% of which is expected to be uncollectible. Prior to this new levy, the county still had $ 350,000 of uncollected taxes from previous years. How much should be reported as Taxes Receivable after the new levy has been recorded?

Question

Quizplus · Accepted Answer

The correct amount to be reported as Taxes Receivable after the new levy is $10,350,000. This is calculated by subtracting the expected uncollectible amount (2% of $10,000,000 = $200,000) from the new levy ($10,000,000 - $200,000 = $9,800,000) and then adding the uncollected taxes from previous years ($350,000) to this amount ($9,800,000 + $350,000 = $10,150,000). However, the correct calculation should actually include the full amount of the new levy plus the outstanding amount from previous years, which is $10,000,000 + $350,000 = $10,350,000, because the expected uncollectible portion does not reduce the amount reported as receivable.

Ledford County Levied Property Taxes of $10,000,000, 2% of Which