Question

Check my Problem 17-34 (LO 17-4) The County of Maxnell decides to create a sanitation department and offer its services to the public for a fee. As a result, county officials plan to account for this activity within the enterprise funds. Prepare journal entries for this operation for the following 2017 transactions as well as necessary adjusting entries at the end of the year. Assume the information is being gathered to prepare fund financial statements. Only entries for the sanitation department are required here: January 1 Received unrestricted funds of $162,000 from the general fund as permanent financing February 1 Borrowed an additional $120,000 from a local bank at a 12 percent annual interest rate. March 1 Ordered a truck at an expected cost of $114,500. April 1 Received the truck and made full payment. The actual cost amounted to $115,000. The truck has a 10-year life and no salvage value. Straight-line depreciation is to be used. May 1 Received a $23,800 cash grant from the state to help supplement the pay of the sanitation workers. The money must be used for that purpose. June 1 Rented a garage for the truck at a cost of $1,300 per month and paid 12 months of rent in advance. July 1 Charged citizens $16,300 for services. Of this amount, $12,400 has been collected. August 1 Made a $12,000 cash payment on the 12 percent note of February 1. This payment covers both interest and principal September 1 Paid salaries of $20,200 using the grant received on May 1. October 1 Paid truck maintenance costs of $2,200. November 1 Paid additional salaries of $18,700, first using the rest of the grant money received May 1. December 31 Sent invoices totaling $24,489 to customers for services over the past six months. Collected $5,500 cash immediately. December 31 A new landfill was opened this year. It is 12 percent filled as of the end of the year. The estimated current cost for years. the eventual closure of this facility is 52.7 million although no payments will be made for approximately Make journal entries for this operation for the above 2017 transactions as well as necessary adjusting entries at the end of the year (l no entry is required for a transaction/event, select "No journal entry required in the first account field. Enter your answers in whole dollars and not in millions.)

Answer 1

	The County of maxwell decides to create a sanitation Deptt
	We need to pass following Journal Entries
Date	Details	Debit($)	Credit($)
Jan 1	Cash	1,62,000
	Capital Investment - Unrestricted Fund		1,62,000
	( received unrestricted funds
	of $ 162000 from the genral fund
Feb 1	Cash	1,20,000
	Note Payable		1,20,000
	( Borowed fund $120000 from Local Bank with 12% Interest
March 1	Ordered a truck at expected	No Journal Entries
	( Just placed an order)
April 1	Truck - Asset	1,15,000
	Cash		1,15,000
	( Received Truck - With No Salvage Value - staright Line Depreciation
May 1	Cash	23,000
	Unearned revenue		23,000
	( Received cash grant from the State to help Suppliment )
Jun 1	prepaid Rent	15,600
	Cash		15,600
	( rented Garage for the truck $1300 per month = $ 1300*12
July 1	Account Receivable	16,300
	Revenue		16,300
	Cash	12,400
	Account Receivable		12,400
Aug 1	Interest	7,200
	Note Payable ( balacing Amount)	4,800
	Cash		12,000
	Interest 12% on Note Payable 01st Feb - 31st July
	Interest 6 Months - 12%*6/12*$ 120000
Sep 1	Salaries	20,200
	Cash		20,200
	Unearned revenue	20,200
	Revenue		20,200
Oct 1	Truck Maintenance Expenses	2,200
	Cash		2,200
Nov 1	Salaries ( additional Salaries)	18,700
	Cash		18,700
	Unearned revenue	2,800
	Revenue		2,800
	( balance amount of Unearned revenue ( $ 23000-$20200)
	Transfer to revenue
Dec 31	Account Receivable	24,400
	Revenue		24,400
	Cash	5,500
	Account Receivable		5,500
Dec 31	Adjustement of prepaid rent to Rent
	Rent ( June 1 to Dec 31) 7 Months * $ 1300	9,100
	prepaid Rent		9,100
Dec 31	Adjustment of Depreciation Entry
	Asset Purchased on April 1 = Depreciation = April 1 to Dec 31 9 Month , no Salvage value , Straight Line depreciation =10 year- Asset cost $115000
	Depreciation Expenses	8,625
	Accumulated Depreciation		8,625
	(115000*9/12*1/10)=$ 8625
Dec 31	Interest cost Adjustment
	Interest calculate on balance Note payable
	(Feb Note Payable = $120000 Less Interest calculate on
	6 Months as on 31st July and Note payable amount $ 4800
	So Now Balance Note Payable ( $120000-$4800) * Interest rate 12% for Aug - Dec = 5 Month
	Interest 5 Months - 12%*5/12*$ 115200
	Interest Expenses	5,760
	Interest Payable		5,760