Custodial Fund

In compliance with a newly enacted state law, Dial County assumed the responsibility of collecting all property taxes for the county, as well as Eton City and Bart Township within the county, as of July 1, 2023. A composite property tax rate per $1,000 of assessed valuation was developed for the fiscal year ending June 30, 2024:

Dial County general fund	$ 60
Eton City general fund	30
Bart Township general fund	10
Composite tax rate	$ 100

When collected, the property taxes are distributed to the governmental units. Dial County established a tax custodial fund to administer collection and distribution of taxes.

Additional information:

1. To reimburse Dial County for administrative costs of operating the custodial fund, 2 percent of all tax collections are remitted to the Dial County general fund.
2. Tax bills sent out on July 1, 2023, for fiscal 2024, and estimated amounts to be collected are:

3. As of September 30, 2023, the tax custodial fund received $14,400,000 in tax payments. On October 1, the tax custodial fund distributed the payments to the three governmental units.

For all answers below, enter answers using all zeros (do not abbreviate to millions or thousands).

a. Prepare the journal entries made in the tax custodial fund and in each of the three general funds to record the tax bills sent out July 1, 2023.

Tax Custodial Fund
Description	Debit	Credit
AnswerAdditionsDeductionsTaxes receivableDue to other governmental unitsProperty tax revenueAllowance for uncollectible taxes	Answer	Answer
AnswerAdditionsDeductionsTaxes receivableDue to other governmental unitsProperty tax revenueAllowance for uncollectible taxes	Answer	Answer
AnswerAdditionsDeductionsTaxes receivableDue to other governmental unitsProperty tax revenueAllowance for uncollectible taxes	Answer	Answer
AnswerAdditionsDeductionsTaxes receivableDue to other governmental unitsProperty tax revenueAllowance for uncollectible taxes	Answer	Answer

Dial County - General Fund
Description	Debit	Credit
AnswerAdditionsDeductionsTaxes receivableDue to other governmental unitsProperty tax revenueAllowance for uncollectible taxes	Answer	Answer
AnswerAdditionsDeductionsTaxes receivableDue to other governmental unitsProperty tax revenueAllowance for uncollectible taxes	Answer	Answer
Allowance for uncollectibletaxes	Answer	Answer

Eton City - General Fund
Description	Debit	Credit
AnswerAdditionsDeductionsTaxes receivableDue to other governmental unitsProperty tax revenueAllowance for uncollectible taxes	Answer	Answer
AnswerAdditionsDeductionsTaxes receivableDue to other governmental unitsProperty tax revenueAllowance for uncollectible taxes	Answer	Answer
Allowance for uncollectible taxes	Answer	Answer

Bart Township - General Fund
Description	Debit	Credit
AnswerAdditionsDeductionsTaxes receivableDue to other governmental unitsProperty tax revenueAllowance for uncollectible taxes	Answer	Answer
AnswerAdditionsDeductionsTaxes receivableDue to other governmental unitsProperty tax revenueAllowance for uncollectible taxes	Answer	Answer
Allowance for uncollectible taxes	Answer	Answer

b. Calculate the amounts to be distributed to each of the three general funds on October 1, 2023. And then,

c. Prepare the journal entries made in the tax custodial fund to record the tax collection. Prepare the journal entries made to record the distribution made by the tax custodial fund and by each of the three general funds to record receipt of payment on October 1, 2023.

Tax Custodial Fund
Description	Debit	Credit
AnswerAdditionsDeductionsCashTaxes receivableDue to other governmental unitsProperty tax revenueAllowance for uncollectible taxes	Answer	Answer
AnswerAdditionsDeductionsCashTaxes receivableDue to other governmental unitsProperty tax revenueAllowance for uncollectible taxes	Answer	Answer
AnswerAdditionsDeductionsCashTaxes receivableDue to other governmental unitsProperty tax revenueAllowance for uncollectible taxes	Answer	Answer
Due to Dial County	Answer	Answer
Due to Eton City	Answer	Answer
Due to Bart Township	Answer	Answer
To record collection of taxes.
Due to Dial County	Answer	Answer
Due to Eton City	Answer	Answer
Due to Bart Township	Answer	Answer
AnswerAdditionsDeductionsCashTaxes receivableDue to other governmental unitsProperty tax revenueAllowance for uncollectible taxes	Answer	Answer
To record distribution of taxes.

Record receipt of taxes from the Tax Custodial Fund.

Dial County-General Fund
Description	Debit	Credit
AnswerAdditionsDeductionsDue to other governmental unitsCashTaxes receivableRevenuesExpenditures	Answer	Answer
Taxes receivable	Answer	Answer
AnswerAdditionsDeductionsDue to other governmental unitsCashTaxes receivableRevenuesExpenditures	Answer	Answer

Eton City - General Fund
Description	Debit	Credit
Cash	Answer	Answer
AnswerAdditionsDeductionsDue to other governmental unitsCashTaxes receivableRevenuesExpenditures	Answer	Answer
AnswerAdditionsDeductionsDue to other governmental unitsCashTaxes receivableRevenuesExpenditures	Answer	Answer

Bart Township - General Fund
Description	Debit	Credit
Cash	Answer	Answer
AnswerAdditionsDeductionsDue to other governmental unitsCashTaxes receivableRevenuesExpenditures	Answer	Answer
AnswerAdditionsDeductionsDue to other governmental unitsCashTaxes receivableRevenuesExpenditures	Answer	Answer