Property Tax Transactions

On March 15, the town of Endicott levied property taxes of $28,000,000 . Based on past experience, town management estimated that the town will not collect 3 percent of the taxes. Taxes were due September 30, but $7,920,000 was received before that date from taxpayers taking advantage of a 1 percent discount for early payment. Endicott treats discounts given as a reduction of revenues. On December 31, the town's year-end, outstanding taxes totaled $1,600,000 of which $400,000 is expected to be collected during the first 60 days of the new year. Actual expenditures for the year of $26,400,000, paid in cash, equaled appropriations. The budget entry included estimated revenues of $25,600,000. Before the budget entry, the fund balance for the general fund was $4,000,000.00. No taxes receivable existed prior to the current year.

Required

a. Prepare the journal entries to record the property tax transactions, including any adjusting entries at December 31.

b. Calculate the general fund's fund balance at December 31. $Answer

Required a. Prepare the journal entries to record the property tax transactions, including any adjusting entries at December 31. b. Calculate the general fund's fund balance at December 31. $