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Use the Following to Answer the Next Two Questions

question 11

Multiple Choice

Use the following to answer the next two questions:
The City of Kale levied property taxes in the amount of $10,000,000 for the fiscal year ended December 31, 2012. It is estimated that 3% will not be collected. During the year ended December 31, 2012, $8,900,000 in property taxes were collected. It is estimated that $500,000 would be collected during the next 60 days, $200,000 would be collected during the remainder of 2013, $100,000 would be collected in 2014, and $300,000 would not be collected. Kale has a policy of recognizing the maximum possible in property taxes.
-What amount would be reported in the government-wide Statement of Activities for the year ended December 31,2012? (ignore the effect of collection of any taxes levied prior to 2012)

Definitions:

Controlling Account

A general ledger account that summarizes and controls the balance of all subsidiary accounts related to it, typically used for accounts receivable and accounts payable.

Subsidiary Ledger

A detailed ledger containing individual accounts that support figures on the general ledger, often used for accounts receivable, accounts payable, etc.

Merchandise Inventory

Goods that a company owns and intends to sell as part of its primary business operations, valued either at cost or market value on the balance sheet.

Accounts Payable

Liabilities representing money owed by a company to suppliers or creditors for goods and services received.