50.1K

Verified Solution

Link Copied!

E10.7 On July 10, the town of Salt Flats levied property taxes of $30,000,000 Property Tax Transactions Based on past experience, town management estimated that the town will not collect 4 percent of the taxes. Taxes were due September 30, but $9,009,000 was received before that date from taxpayers taking advantage of the 1 percent discount for early payment. Salt Flats treats discounts given as a re duction of revenues. On January 1, the outstanding taxes due of $2,000,000 were declared delinquent Salt Flats estimates that $200,000 of delinquent taxes will be collected early next year. By the end of the fiscal year, $300,000 of the delinquent taxes were collected and the rest were written off. No taxes receivable, either current or delinquent, existed at the beginning of the fiscal year. Actual expenditures of $25,000,000 equaled appropriations. All expenditures were cash transactions. The budget entry included $29,000,000 of estimated revenues. After the budget entry, the fund balance for the general fund was $5,200,000 LO 3 Required a. Prepare the journal entries to record the property tax transactions and the expenditures b. State the balance sheet accounts and their respective balances relating to the property tax levy and collections as of the end of the fiscal year. Assume an $850,000 cash balance at the beginning of the fiscal vear

Answer & Explanation Solved by verified expert

See Answer