Question

UV L i g.cuu TV Tavci ulan January 24, 2020 al 10mgill. 1. Higgins City levied $5,000,000 of General Fund property taxes for the calendar year ending December 31, 2019, with an estimated uncollectible amount of $300,000. During 2019 and the first two months of 2020, $4,500,000 of the levy is expected to be collected; however, $200,000 of the levy is not expected to be collected until after February 2020. Record the property tax revenue that should be recognized for the calendar year end December 2019 in two ways: first, from the perspective of the governmental activities on the government-wide statement of activities, and second, from the perspective of the General Fund on the statement of revenues, expenditures, and changes in fund balance. Show your calculations. Explain why property tax revenue is treated differently in those two statements. For governmental activities: Date Account Name Debit Credit Calculations: For the General Fund: Date Account Name Debit Credit Calculations:

can you please post the journal entries and how you got them. please and thank you

Answer 1

Journal entries from Governmental point of view:

Governmental Activities: Dr. Cr.

Taxes Receivable—Current 5,000,000

Est. Un-collectible Current Taxes 300,000

General Revenues— Property Taxes 4,700,000

Journal entries from General Fund point of view:

General Fund Dr. Cr.

Taxes Receivable—Current 5,000,000

Est. Uncollectible Current Taxes 300,000

Revenues 4,700,000

Explanation:

Under the GASB financial reporting model, governmental activities are reported on along-term perspective at the government-wide level using the economic resources measurement focus and the accrual basis of accounting, similar to business accounting. This means that both current and non-current assets and liabilities, as well as deferred inflows and outflows of resources, are reported on the statement of net position. Revenues, expenses, and other financing sources and uses recognized on the accrual basis, are reported on the statement of activities.

The General Fund reports on a short-term perspective using the current financial resources measurement focus and the modified accrual basis of accounting. Therefore, the General Fund reports only current assets, current liabilities, and deferred inflows and outflows of resources. Revenues and expenditures and other financing sources and uses, recognized on the modified accrual basis, are reported on the statement of revenues, expenditures, and changes in fund balances.

Therefore the taxes collected under Governmental activities are credited to General revue of property taxes while under General fund it is directly posted to Revenue account.