Question

A city levies $200,000 of property taxes for its current fiscal year. One percent of the tax levy is expected to be uncollectible. The city collects $170,000 of its taxes during the year and another $25,000 during the first two months of the following year. What amount of property tax revenues should the city report in the General Fund financial statements for the current fiscal year? $200,000 $198,000 $195,000 $170,000

Answer 1

$195,000

Step-by-step explanation:

In this question, we are asked to calculate the value of the property tax revenue that a city which levies a certain amount should report in the General Fund financial statements for a particular fiscal year.

Firstly, we identify the following from the question;

Deferred tax value( this is the amount in tax which is not collected at present) = $25,000

Amount of cash collected = $170,000

The total property tax revenue = Deferred tax value + amount of cash collected = $170,000 + $25,000 = $195,000

$195,000 is the property tax revenue the city should report in the general fund financial statements for the current fiscal year