[Eiman.kuwait]

Oak City for the calendar year 2012:
Collections during 2012 $500,000
Expected collections during the first sixty days
of 2013 100,000
Expected collections during the balance of 2013 60,000
Expected collections during January 2014 30,000
Estimated to be uncollectible 10,000
Total levy $700,000
83. What amount should Oak City report for 2012
property tax revenues in the Statement of Revenues,
Expenditures, and Changes in Fund Balances prepared for
governmental funds?
a. $700,000
b. $690,000
c. $600,000
d. $500,000
answer: 600,000

84. What amount should Oak City report for 2012 property
tax revenues in the government-wide Statement of Activities?
a. $700,000
b. $690,000
c. $600,000
d. $500,000
answer:690

what is the difference between them ? both are asking for prperty tax revenues revenues !!

[S6]

i think i have the answer, but if im wrong please chime in…

the first question uses Modified Accrual, so you record the collections.
Which is the 500k in 2012 plus the 100k in 2013 since its within the 60 day limit, so prop tax is 600k

the second question uses Full Accrual (Government Wide Stmnts) so its the 700k Levied amount less the 10k estimated uncollectible amount.

i hope this is right and if not, i have a lot more studying to do ..

[Eiman.kuwait]

youre right dont worry,, however the same question is written differently on Gleim test bank

Study Unit 18: Governmental Accounting – Modified Accrual | Subunit 2: Funding Sources

Question: 7 The following information pertains to property taxes levied by Oak City for calendar Year 6:
Collections during Year 6
$500,000
Expected collections during the first 60 days of Year 7
100,000
Expected collections during the balance of Year 7
60,000
Expected collections during January Year 8
30,000
Estimated to be uncollectible
10,000
Total levy
$700,000
What amount should Oak report for Year 6 net property tax revenues?
A. $600,000
B. $690,000
C. $700,000
D. $500,000

the answer is A.. see the question they only asked for the net property tax revenue without determining whether its for gov wide F/s(accrual) or for fund F/s(modified)..
please help!

[Eiman.kuwait]

I think I found the answer,
recognizing revenues depends on the type of the revenue, and when determining what type the revenue is: imposed, derived, mandated, vonluntarly,
then determine what type of accounting: modified or accrual
for property tax revenue, it is a Imposed nonexchange revenues: to recognize the Revenue related to it: the property tax must be levied in the current period — Accrual
for modified accrual: taxes are levied PLUS apply the 60 days availability.

why assume property tax is using modified ? because its usually recognized in governmental funds(general fund) so there should be two conditions: taxes are levied and 60 days availability
pay attention this only works to imposed nonexchange PROPERTY revenue, excluding fine.

please reply if you read this and tell me what you think @S6

[Author]

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