Problem
On January 3, 2017, the city council of Ben City levied property taxes of $2 million to support general government operations. The property taxes were levied to finance the 2017 budget, which had been adopted on November 3, 2016.
It has been determined that historically 2 percent of property taxes are uncollectible. Ben City accounts for property taxes in its General Fund using GASB revenue recognition guidelines (e.g. the city has adopted the 60-day rule for property tax revenue recognition).
Subsequent to the January 3rd levy, the following additional events and transactions transpired in 2017 and 2018:
1. The city collected the following amounts related to property taxes
Delinquent 2016 taxes collected in January 2017 $ 22,000
Delinquent 2016 taxes collected in March 2017 $ 25,000
2017 taxes collected in June 2017 $ 1,080
2017 taxes collected in December 2017 $ 800,000
Delinquent 2017 taxes collected in January 2018 $ 20,000
Delinquent 2017 taxes collected in March 2018 $ 30,000
2. Property taxes due in 2017 but uncollected by the December due date were reclassified as delinquent.
A) Prepare all necessary journal entries to record the events related to property tax revenues for the year ended December 31, 2017
B) As stated, Ben City follows GASB recommendations related to the recognition of revenues related to property taxes.
What amounts for 2017 Property Tax Revenue should Ben City properly recognize in the:
1- the General Fund;
2- the Government-wide Consolidated financial statement