Record the following property tax transactions for the town of Smithtown: Januar

Question

Record the following property tax transactions for the town of Smithtown:
January 15t h : Levied property taxes of $12,000,000. Smithtown estimates 4% of property taxes

uncollectible.

February 15t h : Collects $8,500,000 in property taxes.

February20th Re-assesses Taylor’s property and reduces the tax bill from $50,000

March 15t h Re-classifies outstanding property taxes from current to delinquent.

May 10t h : Pleasantville places a lien on Jones property for $200,000 in outstanding property taxes.

June30th: Pleasantville sells Jones property at auction for $250,000.

Explanation / Answer

Date Account Titles and Explanation Debit Credit Jan 15 Property taxes receivable - current $        12,000,000 Allowance for uncollectible property taxes - current (12M x 4%) $        480,000 Revenues - property taxes $ 11,520,000 Feb 15 Cash $          8,500,000 Property taxes receivable - current $    8,500,000 Feb 20 Allowance for uncollectible property taxes - current $                50,000 Property taxes receivable - current $          50,000 Mar 15 Property taxes receivable - delinquent (12000000-8500000-50000) $          3,450,000 Property taxes receivable - current $    3,450,000 May 10 Property tax lien receivable $              200,000 Property taxes receivable - delinquent $        200,000 Jun 30 Cash $              250,000 Property tax lien receivable $        200,000 Vouchers payable $          50,000

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