Question

This uses the same facts as the prior problem. The city of Troy has a July 1 to June 30 fiscal year. It assesses property taxes on this same fiscal year basis. Assume that on June 1, 2020, it mails out property tax bills that apply to the fiscal year ending June 30, 2021. It collects the following: 100,000 in June, 2020; $3,000,000 between July 1, 2020, and June 30th, 2021; $200,000 in July 2021, $80,000 in August, 2021; $70,000 in September 2021, and expects to eventually collect another $50,000. Under full accrual, what are the property tax revenues for the fiscal year ended June 30, 2021? $3,000,000

$3,100,000

$3,380,000

$3,450,000

$3,500,000

Answer 1

Property taxes are recognised in the period for which they are levied, regardless of when they are due and collected.

It should be accrued on the date on which government has a legal enforceable claim to the resources or in the beginning of the period for which they are levied, whichever is sooner.

In accordance with the above provisions,, property taxes revenue for the fiscal year ending 30th June,2021 :-

=100,000 + 3,000,000 + 200,000 + 80,000 + 70,000 + 50,000

=$3,500,000