The following data applies to the next three questions:
The City of Charlestown levied property taxes in the amount of $10,000,000. It is estimated that 2% will not be collected. The taxes were levied July 1, 2014 for the fiscal year ended June 30, 2015. During the year ended June 30, 2015, $8,900,000 in property taxes were collected from this levy. It is estimated that $620,000 will be collected during the next 60 days, $300,000 will be collected more than 60 days after June 30, 2015, and $180,000 will never be collected.
-When preparing the government-wide financial statements,how much property tax revenue should be recognized for the year ended June 30,2015?

Question

Quizplus · Accepted Answer

The property taxes levied were $10,000,000, but it is estimated that 2% will not be collected, which is $200,000. Therefore, the amount expected to be collected is $9,800,000 ($10,000,000 - $200,000). Of this, $8,900,000 was collected during the fiscal year and $620,000 is estimated to be collected in the next 60 days, totaling $9,520,000. However, there is an additional $480,000 ($300,000 more than 60 days + $180,000 never to be collected) that is not expected to be collected within the next fiscal year. Therefore, the recognized revenue for the year ended June 30, 2015 should be $9,800,000 - $480,000 = $9,320,000.

The Following Data Applies to the Next Three Questions