Question

a. Record journal entries for the following transactions for FY 2017. Make any computations to the nearest dollar. Journal entry explanations are not required. Use control accounts for revenues, expenditures and budgetary accounts. It is not necessary to reflect subsidiary ledger entries.

(1) Encumbrances of $ 17,000 for purchase orders outstanding at the end of 2016 were re-established.

(2) The January 1, 2017, balance in Deferred Inflows – Property Taxes relates to the amount of the 2016 levy that was expected to be collected more than 60 days after December 31. This amount should be recognized as 2017 revenues.

(3) A general tax levy in the amount of $6,800,000 was made. It is estimated that 2¼ percent (.0225) of the tax will be uncollectible.

(4) Tax anticipation notes in the amount of $500,000 were issued.

(5) Goods and supplies related to all encumbrances outstanding as of December 31, 2016 were received, along with invoices amounting to $16,600; the invoices were approved for payment. The City maintains immaterial amounts in supply inventories and it is the practice of the City to charge supplies to expenditure when received.

(6) All accounts payable and the amount due other funds were paid.

(7) The General Fund collected the following ($ 10,811,500) in cash:

• prior year taxes, $158,000;
• interest and penalties receivable on prior year taxes, $3,500;
• current taxes, $6,400,000;
• $210,000 previously recorded as due from the state government;
• licenses and permits, $800,000;
• sales taxes, $2,890,000; and
• miscellaneous revenues, $350,000.

(8) Purchase orders and contracts were issued in the amount of $3,465,000.

(9) Payrolls for the General Fund totaled $5,070,000. Of that amount, $498,000 were withheld for employees’ federal income taxes and $357,000 were withheld for employees’ FICA and Medicare tax liability; the balance was paid in cash. The encumbrance system is not used for payrolls.

(10) The liability for the city’s share of FICA and Medicare taxes, $357,000, was recorded as was the liability for state unemployment taxes in the amount of $28,000.

(11) Invoices for most of the supplies and services ordered in transaction 8 were received in the amount of $3,375,300 and approved for payment. The related encumbrance amounted to $3,407,000.

(12) Tax anticipation notes were paid at maturity, along with interest in the amount of $18,000.

(13) Notification was received that an unrestricted state grant in the amount of $332,000 would be received during the first month of the next year.

(14) The General Fund recorded a liability to the Water and Sewer Fund for services in the amount of $37,000 and to the Stores and Services Fund for supplies in the amount of $313,200; $310,000 of the amount due the Stores and Services Fund was paid.

(15) The General Fund recorded an amount due of $52,000 from the state government, representing sales taxes to be collected from retail sales taking place during the last week of the year.

(16) The General Fund paid accounts payable in the amount of $3,175,000 and paid the amounts due the federal and state governments. The General Fund also transferred to the debt service funds cash in the amount of $1,662,000 for the recurring payment of principal and interest.

(17) All required legal steps were accomplished to increase appropriations by the net amount of $109,000. Estimated revenues were increased by $73,000.

(18) The City Council authorized a write-off of $51,000 in delinquent property taxes and corresponding interest and penalties amounting to $1,600.

(19) Interest and penalties receivable on taxes were accrued in the amount of $17,200; $1,100 of this amount is expected to be uncollectible.

(20) It is estimated that $10,500 of the outstanding taxes receivable will be collected more than 60 days beyond the fiscal year-end.

a) prepare and post the closing entries for the General Fund. Outstanding encumbrances at year end are classifies as assigned fund balance and all remaining net resources are classified as unassigned fund balance

b)prepare a statement of revenues, expenditures and changes in fund balance for the year ended December 31, 2017. confirm that the revenue and expenditure control accounts agree with the following detail and use this information in the statement:

Revenues Expenditures $6,657,50 General Government .. $1,646,9 Property Taxes ...... 00 Public Safety ........ 3,026,90 Sales Taxes 2,942,000 Interest and Penalties on 1,441,40 Highways and Streets .. Taxes ........... 16,100 Sanitation .......... Licenses and Permits. 800,000 591,400 Intergovernmental Revenue .......... Health ..... I L I . . . . . . . . . . . . . 332,000 724,100 W Show downloads Miscellaneous Revenue 350,000 374,300 Culture and Recreation $11,097,6 00 Total ...... 917,300 Capital Outlay ....... 492,800 $9,215,1 00 Total ............ e. Prepare in good form a Balance Sheet for the General Fund as of the end of fiscal year, December 31, 2017.

Answer 1

Date Debit 12.000 21.000 3. Partleulass Credit 1.000 Endumbrances. Reserve to entumbrances (To record se established on Cumartes) Deffered inftaos property taxes Revenue to record prov period take revenue 1.000 Property for recewable 68,00.000 Un Colicellable for 136000 Revenue 66 64 000 to record pror period taxes as reaenue Cash 5100, 000 Tax anticipation notes payable 5.001000 Ho record issue of tax anticipation notes of amount 5100.000 Expenditure 16.600 Accounts payable Іь. Боо supply invetorios ac charged to Expenditwo when received Reserves får encumbrances 16 600 Encumbrances 16600 Encumbrances account is adjusted. Accounts payable (99000 + 16600) 15600 other fund payable 27000 in Cash TO Record the payment of accounts payable and other fund which wer 1,142,600 I due

Particulous Debit credit Date to 8\\SOO cash 1.58.000 3.16.000 Property tax receivable (p.) Due from state Goverment Property fox receivable (current Inar) interest and penalities receivable ontores Licenses and permits Sales tax miscellonous revenue. Genral fund collected cash from these sources 64.00.000 3500 8:00.000 98.90.000 35.00.000 Encumbrances 34. 65.000 34. 65.ooo Reserve for Encumbrances To record purchase orders and contracts under Encumbrances. 38.500 Payroll for Genral fund 50.70,000 Federal income fox with held for 44.98.000 Employees FICA contribution 3157,000 carh. 49,151000 Payroll Expenses FICA contribution (city share) 357 000 State unemployment tax revenue. 28.000 To record liability of fifca, and medical tances and unemployment taxa 33,75,300 Accounts payable. 33.75 300 To record issue of tax. anticipation notes Amount 5.000.000 Reverse of Encurmbrances 34,07,000 34.0 7.000 34,07,000 Encumbrannen nccount is adjusted. Expenditure. Encumbrances.

Debit Credit Date 5.00000 Particulars Tax anticipation noles payable intrest Expenses Cash tax anticipation payment and 18,000 To record interest 5, 18,000 Expenses 3,32.000 3, so, 200 Estimated lund (state grant) 3,32,000 unreserved fund balance To record estimated cunrestricted grant Expenditure. water and sewer fund stores and service fund To record re-established encumbrances stores and services. fund 3,10,000 cath To record stores and Service tund. Sales tax receivable 52.000 Revenue 37,000 3,13,200 3.10 000 S2000 16. 30.150oo Accounts payable. 30,15,000 cash Debt service fund. 16,62,000 Cash cash transford to debt service fund. 16,62,000

Date 73.000 51.00 51 000 Particulat Estimated Revenue und balance 1,39.000 Apporations 2.12, 600 to adjust estimated revenue and increase in apporations Property taxes receivables intrest and percilites 1boo Property and taxes receivabre Too intrest and penalites To record deliquent property taxes and intrest and penalities. intrest and pensilites on tares 17,000 estimated ubcollectiable taves Revenue To record accuured intrest and penalites on - taxes Estimated revenue (deffered) 27.500 Tax receivable 97.500 To record estimated deffered tax revenue receivable 1100 16 100