Mile-High City\'s year-end is June 30. Mile-High levies property taxes in Januar

Question

Mile-High City's year-end is June 30. Mile-High levies property taxes in January of each year for the calendar year. One-half of the levy is due in May, and one-half is due in October. Property tax revenue is budgeted for the period in which payment is due. The following information pertains to Mile-High's property taxes for the period from July 1, 2018, to June 30, 2019:

The $70,000 balance due for the May 2019 installments was expected to be collected in August 2019.

What amount should Mile-High recognize for property tax revenue for the year ended June 30, 2019?

$2,100,000

$2,200,000

$2,360,000

$2,400,000

Calendar Year 2018 2019 Levy $2,0000,000 $2,2000,000 Collected in: May 950,000 1,000,000 July 50,000 30,000 October 920,000 December 80,000

Explanation / Answer

Given data,

Property taxes levied in 2018 = 20000000$

Property taxes levied in 2019 = 22000000$

Accounting cycle = july to june

Property taxes to be recognised for the year ending june 30 2019 = (20000000*6/12) + (22000000*6/12) = 21000000$

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