Question

On July 1, 2020, the beginning of its fiscal year, Ridgedale County recorded gross property tax levies of $3,200,000. The county estimated that 2 percent of the taxes levied would be uncollectible. As of April 30, 2021, the due date for all property taxes, the county had collected $2,950,000 in taxes. During the current fiscal year, the county collected $48,000 in delinquent taxes and $3,800 in interest and penalties on the delinquent taxes. The county imposed penalties and interest in the amount of $13,500 but only expects to collect $12,300 of that amount. At the end of the fiscal year (June 30, 2021), uncollected taxes, interest, and penalties are reclassified. They are not expected to be collected within the first 60 days for the following fiscal year.

Required

Record entries for the above transactions as stated in the individual statements below, and post corresponding information into the Revenues ledger as appropriate.

1. Prepare journal entries to record the tax levy on July 1, 2020, in the General Fund. (Ignore all entries in the governmental activities journal.)
2. Prepare a summary journal entry to record the collection of current taxes as of April 30.
3. Prepare a summary journal entry to record the collection of delinquent taxes, interest, and penalties. (You may assume that these amounts had been designated Deferred Inflows of Resources.)
4. Prepare the journal entry necessary to reclassify the uncollected tax amounts as delinquent. Assume these taxes are not expected to be collected within 60 days of year-end.
5. Prepare the journal entry necessary to record interest and penalties if they are not expected to be collected soon after year-end.

View transaction list Journal entry worksheet TO @ @ @ @ 0 0 Record the entry to reclassify the net receivable as deferred inflow of resources. Note: Enter debits before credits. Event Debit Credit d(2) General Journal Revenues Deferred Inflows of Resources—Unavailable Revenues Record entry Clear entry View general journal Reg A to E Journal Entries Req A to E Subsidiary Ledger >

Answer 1

Ridgedale County Journal Enteries Debit in $ Credit in $ Particulars Event Taxes Receivable Current a/c Dr. 3200000 а. To Allowance for Uncollectible Current Taxes 64000 To Revenues 3136000 3200000 x 2% 64000 Cash a/c b. Dr. 2950000 To Taxes Receivable Current 2950000 Cash a/c с. 1 Dr. 51800 To Taxes Receivable Delinquent 48000 To Interest Penalties Receivable on Taxes 3800 Deferred Inflows of Resource Unavailable Revenues c.2 51800 51800 To Revenues Taxes Receivable Delinquent a/c d.1 Dr. 250000 Allowance for Uncollectible Current Taxes a/c Dr. 64000 To Taxes Receivable Current 250000 To Allowance for Uncollectible Delinquent Taxes 64000 d.2 Revenues a/c 186000 Dr. To Deferred Inflows of Resource Unavailable Revenues 186000 250000 -64000 186000 Interest and Penalties Receivable on Taxes a/c Dr. 13500 To Allowance for Uncollectible Interest and Penalties 1200 To Deferred Inflows of Resource - Unavailable Revenues 12300