The City of Smithfield levied property taxes in and for 2012 in the amount of $200 million.It is estimated that 1% will be uncollectible.During 2012,$180 million was collected,and $12 million was collected during the next 60 days.Smithfield recognizes the maximum possible property taxes in its governmental funds.The adjustment,when moving from the governmental funds changes in fund balances to the governmental activities change in net assets would be:

Question

Quizplus · Accepted Answer

Smithfield recognizes the maximum possible property taxes in its governmental funds, which means they recognize the full $200 million minus the 1% estimated uncollectible amount ($2 million), resulting in $198 million. Since $192 million was collected within the availability period ($180 million in 2012 and $12 million in the next 60 days), the adjustment needed is a $6 million increase to account for the difference between the recognized amount and the collected amount.

The City of Smithfield Levied Property Taxes in and for 2012