A city uses a Property Tax Collection Custodial Fund to account for the collection of property taxes for itself, a county, and a school district.
Prepare journal entries to record the following transactions and events for city’s Custodial Fund during calendar year 2023.
a. During 2023, property taxes were levied for the city ($7,000,000), the county ($2,500,000) and school district ($9,300,000). Assume taxes collected by the Custodial Fund for the city will be paid to the city’s General Fund.
b. Property taxes in the amount of $15,600,000 are collected. The percentage collected for each entity is in the same proportion as the original levy.
c. The amounts owed to the county and the school district are recognized.
d. The Custodial Fund distributes the amount owed to the three governments.