Question

The city of Watson reported $8,000 of deferred property tax revenues in its General Fund at the end of its 2018 fiscal year. The 2018 deferred property tax revenues were collected during the last 10 months of the 2019 fiscal year. What worksheet journal entry should be made to prepare the city of Watson’s 2019 government-wide financial statements?

A) Revenues-Property taxes $8,000
Net position 8,000
B) Revenues- property tax 8,000
Deferred revenues-property taxes 8,000
C) Deferred revenues-property taxes 8,000
Revenues-property taxes 8,000
D) No entry is required

Answer 1

Journal entry should be calculated as Revenues-Property taxes $8,000

Net position 8,000

Answer: Option A

Step-by-step explanation:

The property taxes which are deferral in nature are the taxes related to the property where the government and it's officials makes no longer any efforts to collect the tax from that particular property.

That is because that particular property belongs to a person who is either above the age of sixty five years or is disabled. Therefore that property is not qualified for paying any taxes. So the entry in the journal will be revenue from property tax to net position.