Question

The Balance Sheet of the General Fund of the City of Monroe as of December 31, 2019 , follow.

3.C. This portion of the continuous problem continues the General Fund example by requiring the recording and posting of the budgetary entries. To reduce clerical effort required for the solution use control accounts for the budgetary accounts, revenues. expenditures and encumbrances. Subsidiary accounts are not required. Budget information for the City includes:

(1) As of January 1, 2020 , the City Council approved and the mayor signed a budget calling for \(\$ 11,150,000\) in property tax and other revenue, \(\$ 9,380,000\) in appropriations for expenditures, and \(\$ 1,700,000\) to be transferred to two debt service funds for the payment of principal and interest. Record the budget for the General Fund and post to the ledger.

4-C. Part 1. General Fund Transections

Requlred:

a. Record journal entries for the following transactions for FY \(2020 .\) Journal entry explanations are not required. Use control accounts for revenues, expenditures and budgetary accounts. It is not necessary to reflect subsidiary ledger entries.

(2) Encumbrances of \(\$ 19,000\) for purchase orders outstanding at the end of 2019 were re-established.

(3) The January 1, 2020, balance in Deferred Inflows - Property Taxes relates to the amount of the 2019 levy that was expected to be collected more than 60 days after December 31 . This amount should be recognized as 2020 revenues.

(4) A general tax levy in the amount of \(\$ 7,000,000\) was made. It is estimated that \(21 / 4\) percent \((0.0225)\) of the tax will be uncollectible.

(5) Tax anticipation notes in the amount of \(\$ 500.000\) were issued.

(6) Goods and supplies related to all encumbrances outstanding as of December 31, 2019 were received, along with invoices amounting to \(\$ 18,700\). 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.

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

(8) The General Fund collected the following in cash:

- prior year taxes, \(\$ 158,000\) :

- interest and penalties receivable on prior year taxes, \(\$ 3,500\) :

o current taxes, \(\$ 6,400,000\) :

- \(\$ 204,000\) previously recorded as due from the state government:

- licenses and permits, \(\$ 800,000\) :

- sales taxes, \(\$ 2,890,000\); and

- Miscellaneous revenues, \(\$ 350.000\).

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

(10) Payrolls for the General Fund totaled \(\$ 5,110,000 .\) Of that amount, \(\$ 498,000\) were withheld for employees" federal income taxes and \(\$ 390,915\) were withheld for employees" FICA and Medicare tax liability; the balance was paid in cash. The encumbrance system is not used for payrolls.

(11) The liability for the city's share of FICA and Medicare taxes, \(\$ 390,915\), was recorded as was the liability for state unemployment taxes in the amount of \(\$ 28,000\).

(12) 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 \(\$ 3.407,000 .\)

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

(14) 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.

(15) 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 a mount due the Stores and Services Fund was paid.

(16) The General Fund recorded an amount due of \(\$ 48,000\) from the state government, representing sales taxes to be collected from retail sales taking place during the last week of the year.

(17) The General Fund paid accounts payable in the amount of \(\$ 3,175,000\) and paid the amounts due to 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.

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

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

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

\((21)\) it is estimated that \(\$ 17,500\) of the outstanding taxes receivable will be collected more than 60 days beyond the fiscal year-end.

Answer 1