The City of Huntsville, Alabama uses the cash basis of accounting to record all transactions that come into the General Fund.

You are auditing the city$$s year end books and have proposed to the City of Huntsville that they should have used Modified Accrual Accounting to record transactions in the General Fund.

A recent transaction consisted of the following: The City was due property tax of $$50,000$ as of December $31,2022.$ The City received cash of $$8,000$ on December $31,2022$; $$2,000$ in cash on January $15,2023$; and $$3,000$ in cash on March $5,2023.$ The rest of the property tax will be collected in April $2023.$ From this information do three things:

Record the journal entry that the City made, on the cash basis, as of December $31,2022.$

Record the journal entry AS IF the City had used the modified accrual basis to record this same entry as of December $31,2022.$

Record the journal entry AS IF the City had used the full accrual basis to record this same entry as of December $31,2022.$

From the choices below, select the DEBIT and CREDIT needed to record these transactions as of December $31,2022.$ Treat each Situation independently. You should have two, three or four letters for each answer.

Situation One: The City prepares its financial statements on the CASH Basis of accounting.

Situation Two: The City prepares its financial statements on the MODIFIED ACCRUAL Basis of accounting.

Situation Three: The City prepares its financial statements on the ACCRUAL Basis of Accounting.

Task Based Simulation #$6($Continued$)$

Choices:

A$)$ DEBIT CASH $$8,000$

B$)$ DEBIT CASH $$13,000$

C$)$ DEBIT PROPERTY TAXES RECEIVABLE $$5,000$

D$)$ DEBIT PROPERTY TAXES RECEIVABLE $$8,000$

E$)$ DEBIT PROPERTY TAXES RECEIVABLE $$42,000$

F$)$ CREDIT DEFERRED TAX REVENUE $$3,000$

G$)$ CREDIT DEFERRED TAX REVENUE $$8,000$

H$)$ CREDIT DEFERRED TAX REVENUE $$10,000$

I$)$ CREDIT DEFERRED TAX REVENUE $$40,000$

J$)$ CREDIT DEFERRED TAX REVENUE $$42,000$

K$)$ CREDIT PROPERTY TAX REVENUE $$8,000$

L$)$ CREDIT PROPERTY TAX REVENUE $$10,000$

M$)$ CREDIT PROPERTY TAX REVENUE $$13,000$

N$)$ CREDIT PROPERTY TAX REVENUE $$50,000$