Property taxes are not necessarily recognized as revenue in the year collected. The fiscal year of Duchess County ends
Property taxes are not necessarily recognized as revenue in the year collected. The fiscal year of Duchess County ends on December 31. Property taxes are due March 31 of the year in which they are levied.
1. Prepare journal entries (excluding budgetary and closing entries) to record the following property tax related transactions in which the county engaged in 2017 and 2018.
a. On January 15, 2017, the county council levied property taxes of $170 million for the year ending December 31, 2017. Officials estimated that 1 percent would be uncollectible.
b. During 2017 it collected $120 million.
c. In January and February 2018, prior to preparing its 2017 financial statements, it collected an additional $45 million in 2017 taxes. It reclassified as delinquent the $5 million of 2017 taxes not yet collected.
d. In January 2018, the county levied property taxes of $190 million, of which officials estimated 1.1 percent would be uncollectible.
e. During the remainder of 2018 the county collected $2.5 million more in taxes relating to 2017,
$160 million relating to 2018, and $1.9 million (in advance) applicable to 2019.
f. In December 2018 it wrote off $1 million of 2017 taxes that it determined would be uncollectible.
2. Suppose the county were to prepare government-wide statements and account for property taxes on a full accrual.