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.

1. Prepare journal entries to record the tax levy on July 1, 2020, in the General Fund. (Ignore all entries in the governmental activities journal.)
2. Prepare a summary journal entry to record the collection of current taxes as of April 30.
3. 1. 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.
   2. record the reversal of deferred inflows
4. 1. 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.
   2. Record the entry to reclassify the net receivable as deferred inflow of resources
5. Prepare the journal entry necessary to record interest and penalties if they are not expected to be collected soon after year-end.

Part 2: show subsidiary detail for the Revenues ledger

RIDGEDALE COUNTY Revenues Ledger Account / Description Est. Revenues Dr(Cr) Revenues Cr(Dr) Balance Dr(Cr) Taxes Property Tax Interest and Penalties Delinquent Taxes Property Tax Interest and Penalties Deferred Inflows of Resources Property Tax Interest and Penalties

Answer 1

Ridgedale County Part 1 Journal Enteries Event Particulars a. Taxes Receivable - Current a/c Dr. To Allowance for Uncollectible Current Taxes To Revenues 4200000 x 2% = 84000 Debit in $ Credit in $ 4200000 84000 4116000 b. Dr. 3900000 Cash a/c To Taxes Receivable - Current 3900000 c1. 57800 Cash a/c Dr. To Taxes Receivable - delinquent To Interest and penalties Receivable on Taxes 53000 4800 c2. 57800 Deferred inflows of Resources - Unavailable Revenue a/c Dr. To Revenues 57800 dl. 300000 84000 Dr. Taxes Receivable - delinquent a/c Dr. Allowance for Uncollectible Current Taxes a/c To Taxes Receivable - Current To Allowance for Uncollectible delinquent Taxes 4200000 - 3900000 = 300000 300000 84000 d2. Dr. 216000 Revenues a/c To Deferred inflows of Resources - Unavailable Revenue 4116000 - 3900000 = 216000 216000 e. 14500 Interest and Penalties Receivable on Taxes a/c Dr. To Allowance for Uncollectible Interest and Penalties To Deferred inflows of Resources - Unavailable Revenue 1700 12800

Part 2 Revenues Ledger Est. Revenues Revenues Balance Account / Description Taxes Property Tax Interest and Penalties 4116000 -4116000 Delinquent Taxes Property Tax Interest and Penalties 53000 4800 -53000 -57800 Deferred Inflows of Resources Property Tax Interest and Penalties 216000 216000