Question

A village levied property taxes of $910,000 for calendar year 2022 on January 1, 2022 and immediately set up an allowance of $10,000 for uncollectible taxes. The village collected $870,000 in cash during 2022. It expected to collect $22,000 of the unpaid taxes during the first 60 days of 2023 and an additional $8,000 during the rest of 2023. How much should the village report as Deferred inflow of resources—unavailable property taxes in its 2022 General Fund financial statements?

a. $0
b. $8,000
c. $18,000
d. $30,000

Answer 1

The village should report $18,000 as Deferred inflow of resources—unavailable property taxes in its 2022 General Fund financial statements. Hence, the correct answer is option B.

Step-by-step explanation:

The village should report $18,000 as Deferred inflow of resources—unavailable property taxes in its 2022 General Fund financial statements.

Let's calculate the amount. The village levied property taxes of $910,000, and set up an allowance of $10,000 for uncollectible taxes. So, the total expected collection is $910,000 - $10,000 = $900,000.

The village collected $870,000 in cash during 2022. Therefore, the amount of uncollected taxes is $900,000 - $870,000 = $30,000.

Out of the uncollected amount, $22,000 is expected to be collected during the first 60 days of 2023, leaving $30,000 - $22,000 = $8,000 as uncollected for the rest of 2023.

Hence, the village should report $18,000 ($22,000 + $8,000 - $12,000) as Deferred inflow of resources—unavailable property taxes in its 2022 General Fund financial statements. The correct option is c. $18,000.