A City Which Has a 12/31 Fiscal Year End Has

Multiple Choice

A city which has a 12/31 fiscal year end has adopted a policy of recognizing the maximum amount of property tax revenue allowable under GAAP.Property taxes of $600,000 (of which 10% are estimated to be uncollectible) are levied in October 1999 to finance the activities of the fiscal year 2000.During 2000, cash collections related to property taxes levied in October 1999 were $500,000.In 2001 the following amounts related to the property taxes levied in October 1999 were collected: January $25,000; March, $5,000.For the fiscal year ended 12/31/00, what amount should be recognized as property tax revenues related to the 1999 levy on the fund financial statements?

A) $600,000.
B) $540,000.
C) $525,000.
D) $500,000.