A City That Has a 12/31 Fiscal Year End Has

question 28

Multiple Choice

A city that has a 12/31 fiscal year end has adopted a policy of recognizing property tax revenue consistent with the 60-day rule allowable period under GAAP.Property taxes of $600,000 of which none are estimated to be uncollectible are levied in October 2010 to finance the activities of fiscal year 2011.Property taxes are due in two installments June 20 and December 20.Cash collections related to property taxes are as follows: $$\begin{array} { r l l } 1 / 15 / 11 & \text { for property taxes levied in 2009, due in } 2010 & \$ 25,000 \\2 / 15 / 11 & \text { for property taxes levied in 2009, due in } 2010 & \$ 15,000 \\3 / 15 / 11 & \text { for property taxes levied in 2009, due in } 2010 & \$ 10,000 \\6 / 20 / 11 & \text { First install ment of taxes levied in 2010, due } 6 / 20 / 11 & \$ 350,000 \\12 / 20 / 11 & \text { Second installment of taxes levied in } 2010 \text {, due } 12 / 20 / 11 & \$ 150,000 \\1 / 15 / 12 & \text { for property taxes levied in 2010, due in } 2011 & \$ 15,000 \\2 / 15 / 12 & \text { for property taxes levied in 2010, due in } 2011 & \$ 10,000 \\3 / 15 / 12 & \text { for property taxes levied in 2010, due in } 2011 & \$5 , 000\end{array}$$ The total amount of property tax revenue that should be recognized in the governmental fund financial statements in 2011 is:

• A)$600,000.
• B)$575,000.
• C)$535,000.
• D)$525,000.

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Definitions:

Vertical Keiretsu

Vertical keiretsu refers to a type of business arrangement in Japan where a group of companies, primarily suppliers, are linked through cross-shareholdings and share a major manufacturer or assembler at the top.

Supplier Firms

Companies that provide goods or services to other businesses or customers within a supply chain.

Distributor Firms

Distributor firms are companies specialized in distributing products from manufacturers to retailers or directly to consumers.

Mass Production

The manufacture of large quantities of standardized products, often using assembly lines or automated technology.