The Following Data Applies to the Next Three Questions

question 136

Multiple Choice

The following data applies to the next three questions:
The City of Charlestown levied property taxes in the amount of $9,000,000. It is estimated that 2% will not be collected. The taxes were levied July 1, 2013 for the fiscal year ended June 30, 2014. During the year ended June 30, 2014, $7,900,000 in property taxes were collected from this levy. It is estimated that $620,000 will be collected during the next 60 days, $300,000 will be collected more than 60 days after June 30, 2014, and $180,000 will never be collected.
-When preparing the General Fund financial statements,how much property tax revenue should be recognized from this levy for the year ended June 30,2014?

• A) $7,900,000.
• B) $8,520,000.
• C) $8,820,000.
• D) $9,000,000.

Comprehend the concept of cash realizable value and its calculation.

Distinguish between different methods of accounting for uncollectible accounts.

Recognize the impact of credit card sales on receivables.

Understand the significance of formal instruments of credit, such as notes receivable.

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Definitions:

Indirect Approach

A method of communication where the main point or message is not presented directly at the beginning.

Negative News Message

A type of communication that delivers bad or unwelcome news, often requiring careful wording to mitigate negative reactions.

Approach

A method or strategy used to tackle a problem, task, or project, often implying a particular way of thinking or viewpoint.

Negative Organizational News

Information or developments within a company that are unfavorable, distressing, or detrimental to its stakeholders.