A change to the full accrual basis may have little impact upon reported revenues.

A city levies property taxes of $4 billion in June 2013 for its fiscal year beginning July 1, 2013. The taxes are due by January 31, 2014. The following (in millions) indicates actual and anticipated cash collections relating to the levy:

June 2013.............................................. $ 100

July 2013€“June 2014............................ 3,600

July 2014€“August 2014....................... 80

September 2014€“June 2015................. 150

The city estimates that $30 will eventually have to be refunded, owing to taxpayer appeals as to the assessed valuation of their property, and $70 will be uncollectible.

1. Prepare a journal entry for a governmental fund that summarizes the city€™s property tax activity for the fiscal year ending June 30, 2014.

2. Indicate the differences in the amounts to be reported on the government-wide statement of net assets and the statement of activities.

3. Suppose that, in the following year, the tax levy And pattern of collections are identical to those of the previous year. What are the differences now in the amounts reported on the government wide statements?

Transcribed Image Text:

Transactions during the year Beginning Balance Ending Balance Fair Value $100 540 240 Purchase Sales Cost S100 520 200 Cost $100 520 Fair Value $120 510 $250 0 $330 S330 330 $950 315 $945 $820 $880 $250