The Town of Colonie sent $8,400,000 of real-estate tax bills to its residents on the first day of its fiscal year
It expects to collect the $2,000,000 in each of the four quarters of the year and $200,000 of the remainder within 60 days after the end of the fiscal year. The remaining $100,000 represents uncollectible taxes. All revenue is recorded in the Town's General Fund.
a. How would that revenue be recorded on the Colonie's government-wide financial statements?
b. How would it be recorded in Colonie's General Fund?
c. Are the numbers different? Why?
Government-wide financial statements – accrual accounting
Taxes receivable $8,300,000 tax revenue $8,300,000
General Fund - modified accrual accounting
Taxes receivable $8,000,000 + 300,000 = $8,300,000
Revenue $8,300,000
Remaining $100,000 is not "measurable and available"
The numbers are the same because all collectible revenues will be collected within the fiscal year or 60 days thereafter.
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