Question

Part IV. Basic Set of Budgetary Entries Prepare entries to record the following transactions for Benton City for the year 2013. Do not use encumbrance accounting in this problem. The city adopted a budget with appropriations of $250,000. The estimated revenues (all property taxes) were $240,000 b. The city sent property tax bills, at the time of levy, amounting to $230,000 to property owners C The city collected property tax bills, from (b) above, of $225,000. The remainder will be collected in January of 2014. d. A purchase order of $35,000 was sent to a vendor of supplies.

Answer 1

40 Debit Credit In the Books of Benton City Account Title & Explanation Estimated Revenues Budgetary Fund Balance Appropriations (To record Budget) 240,000 10,000 41 42 a) 43 44 45 46 47 b) 48 49 250,000 230,000 Property Taxes Receivable Revenues (To record property taxes bill sent) 230,000 50 225,000 51 C) 52 Cash Property Taxes Receivable (To record collection of Property taxes) 225,000 53 54 35,000 55 d) 56 Encumbrances Fund Balance Reserve for Encumbrances (To record purchase orders) 35,000 57 58

59 ) 60 61 35,000 37,000 Fund Balance Reserve for Encumbrances Expenditures Encumbrances Voucher Payable (To record invoice received) 35,000 37,000 62 63 64 37,000 65 66 Voucher Payable Cash (To record payment of invoice) 37,000 67 68 69 ) 150000 70 Expenditures Cash (To record payment of salaries and wages) 150000 71 72 73 g) 74 10000 Cash Notes Payable (To record signing of notes payable) 10000 75 76 77 h) 78 250,000 Appropriations Estimated Revenues Budgetary Fund Balance (To record closing of Budget) 240,000 10,000 79 80

230,000 82 i) 83 84 Revenues Expenditures Fund Balance (To record closing of actual Budget) 187,000 43,000 85 86 87