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During the current year, Star County levied $3,000,000 in property taxes, 1.5% of which is expected to be uncollectible. During the year, the county collected $2,700,000 and wrote off $25,000 as uncollectible. What amount should Star County report as property tax revenue in its government-wide statement of activities for the current year? Multiple Choice

1. $2,700,000
2. $2,955,000
3. $2,975,000
4. $3,000,000

Respuesta :

Answer:

Option (2) $2,955,000

Explanation:

Data provided in the question:

Amount levied Property taxes = $3,000,000

Percentage of uncollectible = 1.5%

Amount collected during the year =  $2,700,000

Amount wrote off as uncollectible = $25,000

Now,

Amount that should be reported as property tax revenue

= Amount levied Property taxes - Amount uncollectible

= $3,000,000 - [ 1.5% of $3,000,000 ]

= $3,000,000 - $45,000

= $2,955,000

Hence,

Option (2) $2,955,000

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