Question

Required 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 S 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 S6,800,000 was made. It is estimated that 24 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 tor 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 (S 10,811,500) in cash: o prior year taxes, $158,000; o interest and penalties receivable on prior year taxes, S3,500 o current taxes, S6,400,000; o S210,000 previously recorded as due from the state government o licenses and permits, $800,000 o sales taxes, $2,890,000; and o miscellaneous revenues, $350,000

Answer 1

Date	Account Title and Explanation	Debit	Credit
1	Encumbrances	$17,000
	Reserve for encumbrances		$17,000
	(To record re-established encumbrances)
2	Deferred inflows property taxes	$21,000
	Revenue		$21,000
	(To record deferred Inflows property taxes as revenue)
3	Property tax receivable	$6,800,000
	Uncollectible tax		$136,000
	Revenue		$6,664,000
	(To record prior period taxes as revenue)
4	Cash	$500,000
	Tax anticipation notes payable		$500,000
	(To record issue of tax anticipation notes of amount $500,000)
5	Expenditure	$16,600
	Accounts Payable		$16,600
	(Supply inventories are charged to expenditures when received)
	Reserve for encumbrances	$16,600
	Encumbrances		$16,600
	(Encumbrances account is adjusted)
6	Account Payable	$115,600
	Other fund payable	$27,000
	Cash		$142,600
	(To record the payment of accounts payables and other fund which were due)
7	Cash	$10,811,500
	Property tax receivable (previous year)		$158,000
	Due from state government		$210,000
	Property tax receivable (current year)		$6,400,000
	Interest and penalties receivable on taxes (previous year)		$3,500
	Licenses and permits		$800,000
	Sales tax		$2,890,000
	Miscellaneous revenues		$350,000
	(General fund collected cash from these sources)
8	Encumbrances	$3,465,000
	Reserve for Encumbrances		$3,465,000
	(To record purchase orders and contracts under encumbrances)
9	Payroll for general fund	$5,070,000
	Federal income tax withheld for employees		$498,000
	FICA Contribution		$357,000
	Cash		$4,215,000
	(To record payrolls)
10	Payroll Expense	$385,000
	FICA contribution (city's share)		$357,000
	State unemployment tax revenue		$28,000
	(To record liability of FICA and medical taxes, and state unemployment taxes)
11	Expenditure	$3,375,300
	Accounts Payable		$3,375,300
	(To record issue of tax anticipation notes of amount $500,000)
	Reserve for emcumbrances	$3,407,000
	Encumbrances		$3,407,000
	(Encumbrances account is adjusted)
12	Tax anticipation notes payable	$500,000
	Interest Expense	$18,000
	Cash		$518,000
	(To record tax anticipation payment and interest expense)
13	Estimated fund (State grant)	$332,000
	Unreserved fund balance		$332,000
	(To record estimated unrestricted state grant)
14	Expenditure	$350,200
	Water and Sewer Fund		$37,000
	Stores and Services Fund		$313,200
	(To record re-established encumbrances)
	Stores and Services Fund	$310,000
	Cash		$310,000
	(To record payment to stores and service fund)
15	Sales tax receivable	$52,000
	Revenue		$52,000
	(To record prior sales taxes receivable)
16	Accounts Payable	$3,015,000
	Cash		$3,015,000
	(General fund paid amount to account payable)
	Debt service fund	$1,662,000
	Cash		$1,662,000
	(Cash transferred to Debt service fund)
17	Estimated Revenues	$73,000
	Fund Balance	$139,000
	Appropriations		$212,000
	(To adjust estimated revenues and increase in appropriations)
18	Property taxes receivable (Delinquent)	$51,000
	Interest and penalties	$1,600
	Property taxes receivable		$51,000
	Interest and penalties		$1,600
	(To record delinquent property taxes, and interest and penalties)
19	Interest and penalties on taxes	$17,200
	Estimated uncollectible taxes		$1,100
	Revenue		$16,100
	(To record accrued interest and penalties on taxes)
20	Estimated Revenue (Deferred)	$27,500
	Tax receivable		$27,500
	(To record estimated deferred tax revenue receivable)