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Subject Topic: governmental-property tax (Topic Closed Topic Closed) Post ReplyPost New Topic
  
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sanju06
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Posted: 25 May 2009 at 12:20 | IP Logged  

This is question CPA-04529. it requires the calculation of property tax collected for the year.
I find two items in this question similar and can't figure out the difference.
One is property tax estimated to be uncollectible $100,000
and the other property tax delinquent at the end of the year.$150,000

can someone explain the difference?
Thanks in advance
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cpa2bsoon
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Posted: 25 May 2009 at 12:46 | IP Logged  

Sanju...Property Tax estimated to be uncollectible is the tax that is expected to be uncollectible at the time of levy of tax.

However the property tax delinquent is the actual uncollectible amount at year end (12/2006)

So for 2006, the Property Tax collected is

Propert Tax levied $ 9500,000

less Delinq Tax        (150,000)

                            $ 9350,000

If the question had asked for Propert Tax Receivable it would have been $ 9400,000 (assuming the delinq amount was not provided)



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sanju06
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Posted: 25 May 2009 at 12:51 | IP Logged  

Got it!thanks
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jay_usa
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Posted: 25 May 2009 at 12:57 | IP Logged  

The only difference I can think of is Time difference in recording them and whether it is Actual or Estimate ?

Property tax estimated to be uncollectible may have been recorded at beginning of year or during the year when property tax levied recorded ( definitely not the end of year ) and which is an estimate. So You have 9,500,000 - 100,000

Property taxes delinquent ( uncollectible ) at end of year is specifically given which is Actual uncollectibles.

To find out the cash collected, we are interested in actual amount at YE and not estimated amount. The actual uncolletibles were higher than you estimated. In other words, they collected less amount And that is why they have subtracted the 150,000 from the property tax levied amount. 9,500,000-150,000

Hope that helps.

Anyone, please correct me if I am wrong.

Thanks








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cpa2bsoon
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Posted: 25 May 2009 at 13:25 | IP Logged  

jay_usa...that's right!

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