Question

1. Examine the following 2019 transactions for Dwelling Township's General Fund. On July 1, 2009, the city council approves the budget for the General Fund. Included in this budget is $4.900,000 in anticipated property taxes. $32.000.000 in anticipated sales tax revenues, $3,000,000 for utilities, si 2,000,000 for salaries and wages, $1,400,000 for rent, 3,600,000 for administrative expenses, and $14,900,000 for capital improvements. be On July 5, the purchasing office orders $42,000 of office supplies. On July 7, a cash transfer of $300,000 is made to the Public School Superintendent's office for a new roof on the town high school. The project will begin on August 1. On July 12, 5600,000 of computer equipment is purchased with payment due in 30 days. The computers will have an estimated useful life of 3 years. On July 15, the office supplies ordered on July 7 arrive. The bill is for $43,700 and it is due in 30 days. The supplies are not considered assets, but are treated just the same as utilities On July 20, property tax bills totaling $5,200,000 are mailed to city residents. . On July 25, $78,000 in property tax payments are received by the city tax assessor's office. On July 30, the city receives a payment from the state revenue office for June's sales taxes collections. The check is for $3,400,000. Required: Assume you are going to prepare fund-based financial statements. Prepare all the journal entries for the above transactions and events.

Answer 1

Let us understand incase of event no need to pass journal entry.. We should pass journal entries only when there is a financial transaction.

Let come to Answers of the above questions:

a) Approval of budget is just an event and not of a transaction. Therefore we need not to pass journal entries in the books. how ever it has to keep in mind whenever we are start earning or incurring expenses.

b) On 5th July ,made an purchase order only. It is an event as neither we made any payment nor we have received goods or services yet. so no journal entries in books of accounts.

c) 7th July, Donation to Public School A/C ....DR 300000

To Cash A/c 300000

d) 12th July

Computer (Asset) A/c ...... DR 600000

To Account Payable A/c 600000

(being computer purchased on credit )

e) 15th July

Purchase of Utilities A/c ... Dr 43700

To Account payable A/c 43700

(Being utilities purchased with credit period of 30 days)

f) 20th July:

Property tax bill receivable (current Assets) A/C..... Dr 5200000

To Property Tax Income A/C 5200000

g) 25th july

Cash A/c ........Dr 78000

To Property tax bil receivable(current Assets) A/c 78000

h) 30th July

Cash A/c ...............DR 3400000

To Corpus A/C 3400000