During 2017, the city issued $300 in fines for failure to keep real property in 'acceptable' condition. During that period the city spent $200 to mow and clean up the unoccupied properties for which the fines were assessed. The city estimates that $30 of the fines issued in 2017 will be uncollectible. During 2017 the city collected $230 related to 2017 fines and $20 related to 2016 fines. The amount of revenue that the city should recognize in its 2017 governmental fund financial statements related to fines is
A) $230.
B) $250.
C) $270.
D) $300.

Question

Quizplus · Accepted Answer

The city should recognize $250 in revenue for 2017. This is calculated by taking the total fines issued ($300), subtracting the estimated uncollectible fines ($30), and ignoring the $20 collected from 2016 fines as it pertains to a different fiscal year. The costs incurred by the city for cleanup do not affect the revenue recognized from fines.

During 2017, the City Issued $300 in Fines for Failure