The Jackson independent School District began the year with the following accounts on its Balance Sheet related
Question:
The Jackson independent School District began the year with the following accounts on its Balance Sheet related to property taxes (all amounts are in thousands of dollars). All accounts have normal balances:
Taxes Receivable ? Delinquent????????????.................$2,000
Allowance for Uncollectable Taxes ? Delinquent???..........??..400
Penalties and Interest Receivable???????????....................200
Allowance for Uncollectable Penalties and Interest????.....?..?15
Deferred Revenues ($300 Taxes, $55 Penalties and Interest)??.355
Prepare the necessary journal entries. Dates and explanations should bet omitted.
Part 1
1. On January 1, the school district levied property taxes of $8,000. The due date for the taxes is March 31. Taxes are considered delinquent after that date. The school district expects to collect all but 4% of the levy. In addition the district offers a 2% discount if the taxes are paid by February 28. The district expects 40% of the tax to qualify for the discount.
2. Between January 2 and February 28, the district collected $4,800 of the taxed due. Of this amount, $1,300 was due in the preceding fiscal year. The district also collected $130 of penalties and interest during the same time period.
3. During March, an additional $3,500 of receivables were collected. Of this amount, $200 were for the preceding fiscal year. Also during March, $7 of penalties and interest were collected.
4. On April 1, the balance of the current year taxes is past due. A 10% penalty and 2% in interest was immediately assessed on the delinquent debt. It is estimated that $30 of the total interest and penalties will prove uncollectible.
5. On June 12, the school district wrote off $100 property taxes, $10 in penalties, and $2 in interest as uncollectible.
6. From March 31 to January 20 of the next year, the school district collected $300 of the property taxes that were levied on January 1, $86 in penalties, and $20 in interest. Also, the school district collected $200 of property taxes prepaid for the following year.
Part 2
Compute total revenue reportable in current year
Intermediate Accounting
ISBN: 978-0132162302
1st edition
Authors: Elizabeth A. Gordon, Jana S. Raedy, Alexander J. Sannella