1. Property Taxes
Assuming that the City maintains the books and record in a manner that facilitates the preparation of the fund financial statements, prepare all necessary journal entries to record the following events related to property tax revenues for the year ended 12/31/2011. The city has adopted the 60-day rule for all revenue recognition for which it is appropriate.
a. On January 3, the City Council levied property taxes of $2 million to support general government operations, due in two equal installments on June 20th and December 20th. The property taxes were levied to finance the 2011 budget, which had been adopted on November 3, 2010. Historically 2% of property taxes are uncollectible.
b. The City collected the following amounts related to property taxes
Delinquent 2010 taxes collected in January, 2011 $ 22,000
Delinquent 2010 taxes collected in March 2011 $ 25,000
2011 taxes collected in June 2011 $ 1,080
2011 taxes collected in December 2011 $ 800,000
Delinquent 2011 taxes collected in January 2012 $ 20,000
Delinquent 2011 taxes collected in March 2012 $ 30,000
c. Delinquent 2011 property taxes were reclassified as delinquent after the June payment date.
d. $4,000 of 2009 taxes were written off during 2011.