In its General Fund balance sheet at December 31, 2019, Marathon City reported Property taxes receivable of $40,000, deferred property tax revenues of $15,000, and an allowance for uncollectible taxes of $0. At the start of the year 2020, Marathon City made the following journal entry to record its property tax levy:
$\begin{array}{lr}
\text { Property taxes receivable } & 950,000 \
\text { Allowance for refunds and uncollectible taxes } && 10,000 \
\text { Revenues - property taxes } && 940,000
\end{array}$
During the year 2020, the city collected all the property taxes receivable outstanding at December 31, 2019. It also collected $920,000 of the receivables recognized at the beginning of 2020 and wrote off $6,000 of receivables against the allowance account. On December 31, 2020, the Marathon City finance director made the following determinations regarding the property taxes outstanding at that date:
a. All outstanding property taxes would be collected, so there was no need for the allowance for uncollectible property taxes.
b. The City would collect about $15,000 of the outstanding property taxes receivable during the first 60 days of 2021 and the remainder during the latter part of 2021.
Required: Calculate how much property tax revenues Marathon City should recognize in 2020.

Question

In its General Fund balance sheet at December 31, 2019, Marathon City reported Property taxes receivable of $40,000, deferred property tax revenues of $15,000, and an allowance for uncollectible taxes of $0. At the start of the year 2020, Marathon City made the following journal entry to record its property tax levy:
 $\begin{array}{lr}
\text { Property taxes receivable } & 950,000 \
\text { Allowance for refunds and uncollectible taxes } && 10,000 \
\text { Revenues - property taxes } && 940,000
\end{array}$
 During the year 2020, the city collected all the property taxes receivable outstanding at December 31, 2019. It also collected $920,000 of the receivables recognized at the beginning of 2020 and wrote off $6,000 of receivables against the allowance account. On December 31, 2020, the Marathon City finance director made the following determinations regarding the property taxes outstanding at that date: 
a. All outstanding property taxes would be collected, so there was no need for the allowance for uncollectible property taxes.
b. The City would collect about $15,000 of the outstanding property taxes receivable during the first 60 days of 2021 and the remainder during the latter part of 2021.
Required: Calculate how much property tax revenues Marathon City should recognize in 2020.

Quizplus · Accepted Answer

The Answer of In its General Fund balance sheet at December 31, 2019, Marathon City reported Property taxes receivable of $40,000, deferred property tax revenues of $15,000, and an allowance for uncollectible taxes of $0. At the start of the year 2020, Marathon City made the following journal entry to record its property tax levy:
 $\begin{array}{lr}
\text { Property taxes receivable } & 950,000 \
\text { Allowance for refunds and uncollectible taxes } && 10,000 \
\text { Revenues - property taxes } && 940,000
\end{array}$
 During the year 2020, the city collected all the property taxes receivable outstanding at December 31, 2019. It also collected $920,000 of the receivables recognized at the beginning of 2020 and wrote off $6,000 of receivables against the allowance account. On December 31, 2020, the Marathon City finance director made the following determinations regarding the property taxes outstanding at that date: 
a. All outstanding property taxes would be collected, so there was no need for the allowance for uncollectible property taxes.
b. The City would collect about $15,000 of the outstanding property taxes receivable during the first 60 days of 2021 and the remainder during the latter part of 2021.
Required: Calculate how much property tax revenues Marathon City should recognize in 2020.

In Its General Fund Balance Sheet at December 31, 2019