|Posted: 03 May 2010 at 21:54 | IP Logged
Hi. I was first confused by the answer and explanation when I came across this question. But then I read the question again and here is what I think.
The key sentence in the question is "one-half of the levy is due in May and one-half is due in Oct." So that's why it is 50% of year 5 and year 6 revenue.
The $$$ collected in the months were distractor. But If you analyze closly, you can still come up with the same answer by using the info.
Because the city's year end is June 30. So 2 steps for the June 30, yr 6 revenue.
1. Revenue recorded from July--Dec for year 5 =All Oct Installments= $ collected in Oct+Dec=920,000+80,000=1,000,000 (note that 1/2 of the levy is due in May and one-half is due in Oct. so the $50,000 collected in July is excluded here because it is the May year 5 installment rev.)
2. Rev. recorded from Jan-June 30 for year 6 =all May installments=$ collected in May+in July +$40,000 balance due in Aug. (within 60 daysfrom June 30. to Aug)=1100,000+60,000+40,000=1,200,000.
I hope this makes sense..
Where there is a will, there is a way...