In auditing the City of Pippa Passes General Fund, a staff member asks whether the following items should be reported as calendar year 20X4 revenues:
1. Property taxes—which are levied in December and due the following April 30
a. Taxes for 20X4 levied in 20X3 and collected in April 20X4, $800,000
b. Taxes for 20X5 levied in 20X4 and collected in May 20X5, $850,000
c. Taxes for 20X3 levied in 20X2 and collected in January 20X4, $8,000
d. Taxes for 20X4 levied in 20X3 and collected in January 20X5, $137,000
e. Taxes for 20X5 levied and collected in 20X4, $22,000
f. Taxes for 20X4 levied in 20X3, not expected to be collected until late 20X5 or 20X6, $12,000
2. Proceeds of a 6%, 10-year general obligation bond issued December 28, 20X4, $540,000
3. Sales taxes
a. Returns filed (for 20X4 sales) and taxes collected in 20X4, $42,000
b. Returns filed in 20X3 and taxes collected in June 20X4, $7,400
c. Returns filed in 20X4 and taxes collected in the first week of 20X5, $6,200
4. Proceeds of a 10% note payable, dated November 1, 20X4, and due March 1, 20X5, $15,000
5. Grant awarded in 20X4—received in full in mid-20X4 (portion not used for designated purposes by 20X7 must be refunded)
a. Total amount of award, $250,000
b. Qualifying expenditures made in 20X4, $172,000
6. 20X4 payment from a Special Revenue Fund to finance street improvements, $12,000
7. Interest and penalties
a. Accruing and collected during 20X4, $2,200
b. Accruing, but not recorded in the accounts, during 20X0–X3 and collected in mid-20X4, $7,800
c. Accruing during 20X4 and expected to be collected in early 20X5, $3,400
d. Accruing during 20X4 and expected to be collected in 20X6 and later, $1,200

a. What is your recommendation for each of the preceding items? (Indicate how each item not reported as 20X4 revenue should be reported.) Explain your recommendations using this format:
Item Recommendation(s) 20X4 Revenues Reason(s)
b. What total revenue amount should Pippa Passes report for 20X4?

  • CreatedOctober 25, 2014
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