Problem #2: Revenue Recognition (60 points)

Part #1: Property Tax Revenue (40 points)

a. On May 1, 2022, the tax assessor for the City of Gasby levied property taxes totaling $84,600,000 for fiscal year 2023. The assessor mailed the tax bills immediately. The city estimated that 5% of all property taxes would become uncollectible. (2 points for the fund plus 6 points for the entry = 6 points)

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DATE	ACCOUNT NAMES		DEBIT	CREDIT

b. During June 2022, the City of Gasby collected $3,852,000 of fiscal year 2023 property taxes.

(2 points for the fund plus 2 points for the entry = 4 points)

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DATE	ACCOUNT NAMES		DEBIT	CREDIT

c. On July 1, 2022, the City of Gasby recognized the revenue from the fiscal year 2023 property taxes. (2 points for the fund plus 2 points for the entry = 4 points)

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DATE	ACCOUNT NAMES		DEBIT	CREDIT

d. During fiscal year 2023, the City of Gasby collected $72,676,000 of cash on the fiscal year 2023 property taxes. (2 points for the fund plus 2 points for the entry = 4 points)

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DATE	ACCOUNT NAMES		DEBIT	CREDIT

e. Compute the following amounts at June 30, 2023 relating to the 2023 property taxes prior to any necessary adjustments. (2 points each = 6 points)

Property Taxes Receivable - Current
Allowance for Uncollectible Property Taxes - Current
Revenues Property Taxes 2023

Supporting Calculations Required:

f. On June 30, 2023, the City of Gasby determined that it must increase its allowance for uncollectible taxes by $537,000 for properties with an owner that had recently declared bankruptcy. (2 points for the fund plus 2 points for the entry = 4 points)

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DATE	ACCOUNT NAMES		DEBIT	CREDIT

g. On June 30, 2023, the City of Gasby reclassified the remaining property taxes receivable and related allowance as delinquent. The city does not expect to collect any of the delinquent taxes until at least 90 days after year-end. (2 points for the fund plus 4 points for the entry = 6 points)

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DATE	ACCOUNT NAMES		DEBIT	CREDIT

h. Compute the following amounts at June 30, 2023 relating to the 2023 property taxes after the necessary adjustments. (2 points each = 6 points)

Property Taxes Receivable - Delinquent
Allowance for Uncollectible Property Taxes - Delinquent
Revenues Property Taxes 2023

Supporting Calculations Required: