Question

10. [Para. 4-a-10] Interest and penalties receivable on delinquent taxes was increased by $40,500; $3,248 of this was estimated as uncollectible and $8,910 was considered unavailable for use in the current fiscal year. Required: Record this transaction in the General Fund and governmental activities journals as a revenue transaction. The $8,910 classified as unavailable for use is recorded as deferred inflows of resources in the General Fund journal and as revenue in the governmental activities journal. Post all journal entries to the ledgers: After reviewing all entries for accuracy, including year and paragraph numbers, post all entries to the general ledger accounts and to all subsidiary ledger accounts, by clicking on [Post entries] button. Also post all entries in the governmental activities journal.

Answer 1

Particulars	LF	Debit	Credit
Receivable account		31590	-
To General fund account		-	31590
(Being amount transferred to general fund account)
Bad debts account		3248	-
To receivable account		-	3248
(Being unexpected bad debts received)
Bank account		28342	-
To receivable account		-	28342
(Being amount received)

Balance sheet:

Liabilities	Amount	Assets	Amount
Equity share	XXX	Fixed Assets	XXX
General fund	31590
Net current liability	XXX	Current Assets
		Bank Account	28342
Current liability	XXX	(Increased)

NOTE: Bad debts effect the profit and loss account there by decreasing Net profit. Therefore the effect is shown in balance sheet accordingly.