Question

On January 2, 2020, real property taxes were levied for the year in the amount of $1,878,700. It was estimated that 2 percent of the levy would be uncollectible. Required: Record this transaction in both the General Fund and governmental activities journal. (Note: Type 4-a-1 as the paragraph number in the [Add description] field for this entry; 4-a-2 for the next transaction, etc. Careful referencing by paragraph number is very helpful should you need to determine where you may have omitted a required journal entry or made an error.) For the General Fund you will be directed to the Detail Journal. Select "Accrued Revenue" in the drop down [Description] menu in the Detail Journal related to the General Fund entry.

Answer 1

The Journal entries are as follows:

(i) General fund

Property taxes receivable current A/c Dr. $1,878,700

To Allowance for uncollectible current taxes $37,574

To Revenue $1,841,126

(To record general fund)

(ii) Governmental activities

Property taxes receivable current A/c Dr. $1,878,700

To Allowance for uncollectible current taxes $37,574

To Revenue $1,841,126

(To record governmental activities)

Workings:

Allowance for uncollectible current taxes:

= Real property taxes × percent of levy uncollectible

= $1,878,700 × 2%

= $37,574