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At the beginning of 2020, the balance sheet of a county general fund reports $500,000 in property taxes receivable from 2019, of which $350,000 are considered uncollectible. During 2020 the county sends out tax bills in the amount of $10,000,000, of which $600,000 are expected to be uncollectible. Cash collections on 2019 taxes are $140,000, and the remaining uncollected taxes are written off. Cash collections on 2020 taxes are $9,500,000. Of the $500,000 uncollected at the end of 2020, $100,000 are expected to be collected within 60 days, $65,000 are expected to be collected more than 60 days after year-end, and the rest are uncollectible.
-How does activity in 2020 related to 2019 taxes affect 2020 property tax revenue?

Question

Quizplus · Accepted Answer

Expected revenues already accrued in 2019 were $150,000 (= $500,000 - $350,000). Actual collections in 2020 were $140,000. Therefore, 2020 property tax revenue is reduced by $10,000 (= $150,000 - $140,000).

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