(Property Taxes) Prepare general journal entries to record the following transac
ID: 2435530 • Letter: #
Question
(Property Taxes) Prepare general journal entries to record the following transactions in Allendale City's General Ledger and make adjusting entries if needed:1. Allendale City levied property taxes of $12,000,000 for 20X6. The taxes were levied on January 1, 20X6. Allendale expects $80,000 to be uncollectible. Three-fourths of the taxes receivable are expected to be collected within the 2% discount period. Another $1,000,000 taxes receivable should be collected before year end but after the discount period. The balance of the collectible taxes are expected to be collected at a uniform rate over the first 10 months of 20X7.
2. Allendale collected $9,100,000 (before discounts) of its taxes receivable prior to the end of the discount period. The balance of the taxes receivable are past due.
3. Allendale wrote off taxes receivable of $30,000 as uncollectible.
4. Allendale collected another $900,000 of its taxes receivable after the discount period but before year end.
Thanks for your help in this matter.
Explanation / Answer
1 Property Taxes Receivable- Current 12,000,000.00 Estimated Uncollectibles-Current 80,000.00 Revenue-Current 11,920,000.00 Revenue-Current 2,000,000.00 Revenue- Deferred 2,000,000.00 (To record revenue deferred ) (Revenue Deferred : Taxes Receivable - 12,000,000 Less:3/4th within Disc period - (9,000,000 ) Receivable within year - (1,000,000) after Disc period Deferred Revenue - 2,000,000) 2 Cash 9,100,000.00 Discount 182,000.00 Property Taxes Receivable- Current 9,282,000.00 ( To recored taxes rceived within discount period) 3 Estimated Uncollectibles-Current 30,000.00 Property Taxes Receivable- Current 30,000.00 (To write of taxes uncollectible ) 4 Cash 900,000.00 Property Taxes Receivable- Current 900,000.00 (To record receipt of taxes receivable after discount period . ) Estimated Uncollectibles-Current 50,000.00 Estimated Uncollectibles- Delinquent 50,000.00 ( To record the transfer of balance in estimated uncollectbles to related delinquent account )
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