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tangare [24]
3 years ago
5

At the beginning of 2020, the balance sheet of a county general fund reports $500,000 in property taxes receivable from 2019, of

which $350,000 are considered uncollectible. During 2020 the county sends out tax bills in the amount of $10,000,000, of which $600,000 are expected to be uncollectible. Cash collections on 2019 taxes are $140,000, and the remaining uncollected taxes are written off. Cash collections on 2020 taxes are $9,500,000. Of the $500,000 uncollected at the end of 2020, $100,000 are expected to be collected within 60 days, $65,000 are expected to be collected more than 60 days after year-end, and the rest are uncollectible.What are total property tax revenues for 2020, related to 2020 tax bills?A. $ 9,600,000B. $ 9,500,000C. $10,000,000D. $ 9,400,000
Business
1 answer:
horrorfan [7]3 years ago
6 0

Answer: A. $ 9,600,000

Explanation:

According to GAAP Principles on Financial Accounting for Property taxes, taxes which are Government revenue, can be accounted for in the period they are to be accrued for (the period incurred) provided that they do not exceed 60 days after the period elapses for it is assumed that they can still be used to pay off expenses in that period.

The total property tax revenues for 2020, related to 2020 tax bills should therefore the sum of the collected amount and the amount to be collected within 60 days after.

= 9,500,000 + 100,000

= $9,600,000

The total property tax revenues for 2020, related to 2020 tax bills is $9,600,000 which is Option A.

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