Question

For the fiscal year ended 6/30/2016, what amount should be recognized as property tax revenues related to the 2016 levy on the governmental fund financial statements? A city levies property taxes of $4 billion in June 2015 for its fiscal year beginning July 1, 2015. The taxes are due by January 31, 2016. The following (in millions) indicates actual and anticipated cash collections relating to the levy:

June 2015 - $100

July 2015 through June 2016 - $3,600

July 2016 through August 2016 - $80

September 2016 through June 2017 - $150

The city estimates that $30 million will eventually have to be refunded, owing to taxpayer appeals of the assessed valuation of their property, and that $70 million will be uncollectible.

A- $3600

B - $3750

C - $3780

D - $3900

Answer 1

Under Governmental fund financial statements , only property tax revenues that are both measurable & available (to meet the obligations of the period)are recognised--ie. tax that pertains to/ are /or that can be collected within that fiscal or collected within a reasonable time period, ie.say 60 days from the end of the fiscal period---net of estimated refunds & uncollectible amounts -- are recognised as revenues for that fiscal period.

Accordingly, the answer for the above will be

4000-150-30-70=

B- $ 3750