Question

The following transactions relate to the General Fund of the City of Buffalo Falls for the year ended December 31, 2020:

1. Beginning balances were: Cash, $105,000; Taxes Receivable, $207,500; Accounts Payable, $61,250; and Fund Balance, $251,250.
2. The budget was passed. Estimated revenues amounted to $1,350,000 and appropriations totaled $1,345,000. All expenditures are classified as General Government.
3. Property taxes were levied in the amount of $975,000. All of the taxes are expected to be collected before February 2021.
4. Cash receipts totaled $945,000 for property taxes and $327,500 from other revenue.
5. Contracts were issued for contracted services in the amount of $116,250.
6. Contracted services were performed relating to $103,500 of the contracts with invoices amounting to $99,500.
7. Other expenditures amounted to $1,017,500.
8. Accounts payable were paid in the amount of $1,172,000.
9. The books were closed.

Required:
a. Prepare journal entries for the above transactions.
b. Prepare a Statement of Revenues, Expenditures, and Changes in Fund Balance for the General Fund.

Answer 1

a)

No	Account Title and Explanation	Debit	Credit
1	No Journal Entry is Required
2	Estimated Revenue Control	$1,350,000
	Appropriation		$1,345,000
	Budgetary Fund		$5,000
3	Taxes Receivable	$975,000
	Revenue Control		$975,000
4	Cash	$1,272,500
	Taxes Receivable		$945,000
	Revenue Control		$327,500
5	Encumbrance Control	$116,250
	Budgetary Fund		$116,250
6	Budgetary Fund	$103,500
	Encumbrance Control		$103,500
	Expenditure Control	$99,500
	Accounts Payable		$99,500
7	Expenditure Control	$1,017,500
	Accounts Payable		$1,017,500
8	Accounts Payable	$1,172,000
	Cash		$1,172,000
9	Appropriation Control	$1,345,000
	Budgetary Fund	$5,000
	Estimated Revenue Control		$1,350,000
	Budgetary Fund -Reserve for Encumbrance (116,250 - 103,500)	$12,750
	Encumbrance		$12,750
	Revenue Control ($975,000 + $327,500)	$1,302,500
	Expenditure Control ($99,500+$1,017,500)		$1,117,000
	Fund Balance		$185,500

b)

Revenue;
Property Taxes	$975,000
Other Revenue	$327,500
Total Revenue		$1,302,500
General Government : Contracted Service	$99,500
Others	$1,017,500
Total Expenditure		$1,117,000
Access of Revenue Over Expenditure		$185,500
Fund Balance, January 1,2020		$251,250
Fund Balance, December 31,2020		$436,750

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