On Jan. 1st the City of Orleans billed property owners in a special assessment f
ID: 2466826 • Letter: O
Question
On Jan. 1st the City of Orleans billed property owners in a special assessment for a major
drainage project that will result in the construction of a water reservoir that will allow boat-
ing and fishing. This reservoir will connect to Lake Champlain and then into the Gulf of
Mexico. The assessment billings sent out by the city totals $10,000,000. The city expects
to receive 95% of all billings. (b) By June 1st, any amount not received will be classified
as delinquent. The city has received 85% of the billed assessments by June 1st. Record the
Jan. 1st billing , the collection received on June 1st, and any other entries that are
deemed necessary.
Explanation / Answer
Journal Entries
Date
Description
Debit
Credit
Jan 1
Billings receivable
10,000,000
To Estimated uncollectible
500,000
To Revenues
9,500,000
June 1
Cash
8,500,000
To Billings receivable
8,500,000
Billings receivable – delinquent
1,500,000
Estimated uncollectible
500,000
To Billings receivable
1,500,000
To Estimated uncollectible delinquent billings
500,000
Date
Description
Debit
Credit
Jan 1
Billings receivable
10,000,000
To Estimated uncollectible
500,000
To Revenues
9,500,000
June 1
Cash
8,500,000
To Billings receivable
8,500,000
Billings receivable – delinquent
1,500,000
Estimated uncollectible
500,000
To Billings receivable
1,500,000
To Estimated uncollectible delinquent billings
500,000
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