Wakefield Village levies $6,255,000 in property taxes at the beginning of its fiscal year. Two percent is
Question:
Wakefield Village levies $6,255,000 in property taxes at the beginning of its fiscal year. Two percent is deemed to be uncollectible. The proper general ledger journal entry that would be made when the taxes are levied would be
a. debit Taxes Receivable $6,255,000; credit Tax Revenues $6,255,000.
b. debit Taxes Receivable $6,255,000; credit Tax Revenues $6,129,900; credit Allowance for Uncollectible Taxes $125,100.
c. debit Taxes Receivable $6,129,900; credit Tax Revenues $6,129,900.
d. Either a or c are allowed by GAAP-Taxes Receivable may be recorded at the levy amount or only at the expected collection amount.
Step by Step Answer:
Governmental And Nonprofit Accounting Theory And Practice
ISBN: 9780132552721
9th Edition
Authors: Robert J Freeman, Craig D Shoulders, Gregory S Allison, Terry K Patton, Robert Smith,