Question

On July 1, 2020, the beginning of its fiscal year, Ridgedale County recorded gross property tax levies of $4,200,000. 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 $3,900,000 in taxes. During the current fiscal year, the county collected $53,000 in delinquent taxes and $4,800 in interest and penalties on the delinquent taxes. The county imposed penalties and interest in the amount of $14,500 but only expects to collect $12,800 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. a. Prepare journal entries to record the tax levy on July 1, 2020, in the General Fund. (Ignore all entries in the governmental activities journal.) b. Prepare a summary journal entry to record the collection of current taxes as of April 30. c. 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.) d. 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. e. Prepare the journal entry necessary to record interest and penalties if they are not expected to be collected soon after year-end.

Answer 1

	On July 1 2020, The beginning , Ridgedale County
	recorded Gorss property Tax levied$ 4200,000
	The County estimate tat 2% of the tax levied as
	Uncollectable
	Journal Entries to record the Tax levy in The General Fund
Sl No a	General Fund		General Ledger			Subsidiary Ledger
	Details		Debit($)	Credit($)			Debit($)	Credit($)
	Current Tax Receivable		42,00,000
	Unallocated Tax Collected Allowance @2%			84,000	(2% * $4200000)	Revenue- Ledger
	Revenue ( balaing Figure)			41,16,000		Property tax		41,16,000
	( recognised)
Sl No b	Cash		41,16,000
	Current Tax Receivable			41,16,000
Sl No c	Cash		57,800
	DelinQuent Tax Receivable			53,000
	Tax Receivable -Interest and Penalties			4,800
	( Accounted Delinquent tax + Interest and Penalties
Sl No d	Tax Rceivable - Delinquent		3,00,000
	( $4200000-$ 3900000)
	UnCollected Current Tax Allowance ( as above)-		84,000
	TaxReceivable - Current Tax			3,00,000
	UnCollected Current Tax Allowance Delinquent			84,000
Sl No e	Interest & Penalties- Receivbale		14,500
	Allowance forUncollectable Interest & penalty			1,700
	Revenue
	( expect to collect)			12,800