70. The General Fund of the City of Lexington approved a tax levy for the calend

Question

70. The General Fund of the City of Lexington approved a tax levy for the calendar year 2015 in the amount of $2,000,000. Of that amount, $30,000 is expected to be uncollectible. During 2015, $1,750,000 was collected. During 2016, $100,000 was collected during the first 30 days, $50,000 was collected during days 31-60, and $70,000 was collected during the days 61-90. During the post-audit, you discovered that the City showed $2,000,000 in revenues. How much revenue should the City recognize in 2015 from this tax levy?

A) $ 1,850,000

B) $ 1,900,000

C) $ 1,920,000

D) $ 2,000,000

please show how you got answer.

Explanation / Answer

Total expected revenue for the year 2015 $ 2,000,000

Less: Provision for uncollectible amounts (30,000)

Less: Provision for the amounts remains uncollectible (70,000)

after 60 days from the end of year

( 2,000,000-30,000-1,750,000-100,000-50,000)

Revenue shall be recognised $ 1,900,000

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