Chapter 5, Problem 7E

Prepare general journal entries to record the following transactions in the town of Menefee’s General Ledger and make adjusting entries, if needed:

1. 1. Menefee levied property taxes of $12,000,000 for 20X6. The taxes were levied on January 20X6. The town expects $80,000 to be uncollectible. Three-fourths of the taxes receivable are expected to be collected within the 2% discount period. Another $1,000,000 of taxes receivable should be collected before year end but after the discount period. The balance of the collectible taxes is expected to be collected at a uniform rate over the first 10 months of 20X7.
2. 2. Menefee collected $9,100,000 (before discounts) of its taxes receivable prior to the end of the discount period. The balance of the taxes receivable is past due.
3. 3. Menefee wrote off taxes receivable of $30,000 as uncollectible.
4. 4. Menefee collected another $900,000 of its taxes receivable after the discount period but before year end.