Record journal entries for the following transactions for FY

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 $ 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 $6,800,000 was made. It is estimated that 2¼ 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 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.

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

(7) The General Fund collected the following ($ 10,811,500) in cash:

prior year taxes, $158,000;

interest and penalties receivable on prior year taxes, $3,500;

current taxes, $6,400,000;

$210,000 previously recorded as due from the state government;

licenses and permits, $800,000;

sales taxes, $2,890,000; and

miscellaneous revenues, $350,000.

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

(9) Payrolls for the General Fund totaled $5,070,000. Of that amount, $498,000 were withheld for employees’ federal income taxes and $357,000 were withheld for employees’ FICA and Medicare tax liability; the balance was paid in cash. The encumbrance system is not used for payrolls.

(10) The liability for the city’s share of FICA and Medicare taxes, $357,000, was recorded as was the liability for state unemployment taxes in the amount of $28,000.

(11) 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.

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

(13) 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.

(14) 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 amount due the Stores and Services Fund was paid.

(15) The General Fund recorded an amount due of $52,000 from the state government, representing sales taxes to be collected from retail sales taking place during the last week of the year.

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

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

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

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

(20) It is estimated that $10,500 of the outstanding taxes receivable will be collected more than 60 days beyond the fiscal year-end.

b. Post the entries to the general ledger.

c. Prepare and post the closing entries for the General Fund.   Outstanding encumbrances at year end are classified as Assigned Fund Balance and all remaining net resources are classified as Unassigned Fund Balance.

d. Prepare a Statement of Revenues, Expenditures, and Changes in Fund Balance for the year ended December 31, 2017. Confirm that the revenue and expenditure control accounts agree with the following detail and use this information in the Statement:

Revenues

Expenditures

Property Taxes . . . . . .

$6,657,500

General Government . . .

$1,646,900

Sales Taxes

2,942,000

Public Safety . . . . . . . . .

3,026,900

Interest and Penalties on Taxes . . . . . . . . . . .

16,100

Highways and Streets . .

1,441,400

Licenses and Permits .

800,000

Sanitation . . . . . . . . . . . .

591,400

Intergovernmental Revenue . . . . . . . . . . .

332,000

Health . . . . . . . . . . . . . .

724,100

Miscellaneous Revenue

350,000

Welfare . . . . . . . . . . . . .

374,300

Total . . . . . . . . . . . .

$11,097,600

Culture and Recreation .

917,300

Capital Outlay . . . . . . . .

492,800

Total . . . . . . . . . . . . .

$9,215,100

e. Prepare in good form a Balance Sheet for the General Fund as of the end of fiscal year, December 31, 2017.

Revenues		Expenditures
Property Taxes . . . . . .	$6,657,500		General Government . . .	$1,646,900
Sales Taxes	2,942,000		Public Safety . . . . . . . . .	3,026,900
Interest and Penalties on Taxes . . . . . . . . . . .	16,100		Highways and Streets . .	1,441,400
Licenses and Permits .	800,000		Sanitation . . . . . . . . . . . .	591,400
Intergovernmental Revenue . . . . . . . . . . .	332,000		Health . . . . . . . . . . . . . .	724,100
Miscellaneous Revenue	350,000		Welfare . . . . . . . . . . . . .	374,300
Total . . . . . . . . . . . .	$11,097,600		Culture and Recreation .	917,300
			Capital Outlay . . . . . . . .	492,800
			Total . . . . . . . . . . . . .	$9,215,100

Solution

b) Post the entries to the general ledger. 1) Debit Credit Encumbrances a/c              17,000.00 General Fund a/c              17,000.00 2) Deferred Inflows Fund Balance a/c      10,811,500.00 Income Statement      10,811,500.00 3) General tax levy Fund Balance a/c         6,647,000.00 Income Statement         6,647,000.00 4) Tax anticipation notes Fund Balance a/c            500,000.00 Tax anticipation notes payable            500,000.00 5) supply inventories Income Statement 16,600 Accounts payable              16,600.00 6) All accounts payable and the amount due other funds were paid Accounts payable              16,600.00 Fund Balance a/c              16,600.00 7) Recorded under J/L 02 8) Contingent Liability-Purchase Order (No need General Ledger entry) 9) Payrolls Payroll a/c 5,070,000 employees’ federal income taxes payable 498,000 FICA and Medicare tax liability 357,000 Fund Balance a/c         4,215,000.00 10) FICA and Medicare taxes (Error Entry) 11) supplies and services supplies and services a/c 3,375,300 Accounts payable 3,375,300 encumbrance a/c         3,407,000.00 Accounts payable         3,407,000.00 12) Tax anticipation notes payment Tax anticipation notes payable            500,000.00 Interest charge              18,000.00 Fund Balance a/c            518,000.00 13) otification was received that an unrestricted state grant -Contingent Asset (No need General Ledger entry) 14) he General Fund recorded a liability to the Water and Sewer Fund for services Water and Sewer Fund for services a/c (Income Statement) 37,000 Stores and Services Fund for supplies a/c (Income Statement) 313,200 Stores and Services Fund (Income Statement) 310,000 Accounts payable            660,200.00 15) sales taxes to be collected from retail sales Sales tax collectable(Receivable a/c)              52,000.00 Income Statement              52,000.00 16) General Fund paid accounts payable accounts payable a/c 3,175,000 Fund Balance a/c 3,175,000 debt service funds a/c 1,662,000 Fund Balance a/c 1,662,000 17) Revenue estimate no impact on ledgers 18) City Council authorized a write-off Writeoff a/c              51,000.00 delinquent property taxes receivable a/c              51,000.00 interest and penalties receivable                1,600.00 Income Statement                1,600.00 19) Interest and penalties receivable on taxes Interest and penalties receivable on taxes a/c 17,200 Income Statement              17,200.00 Income Statement                1,100.00 Provision on Interest and penalties receivable                1,100.00 20) outstanding taxes receivable will be collected outstanding taxes receivable              10,500.00 Income Statement              10,500.00 D )Statement of Revenue & Expenditure Description Expense Income Income Statement      10,811,500.00 Income Statement         6,647,000.00 Income Statement 16,600 Income Statement              52,000.00 Income Statement                1,600.00 Income Statement              17,200.00 Income Statement                1,100.00 Income Statement              10,500.00 interest and penalties receivable                1,600.00 Interest charge              18,000.00 Payroll a/c 5,070,000 Provision on Interest and penalties receivable                1,100.00 Stores and Services Fund (Income Statement) 310,000 Stores and Services Fund for supplies a/c (Income Statement) 313,200 supplies and services a/c 3,375,300 Water and Sewer Fund for services a/c (Income Statement) 37,000 Writeoff a/c              51,000.00         9,193,800.00      17,540,900.00 Income over expenses        8,347,100.00 Fund Balance a/c Debit Credit Fund Balance a/c      10,811,500.00 Fund Balance a/c         6,647,000.00 Fund Balance a/c            500,000.00 Fund Balance a/c              16,600.00 Fund Balance a/c         6,630,400.00 Fund Balance a/c            518,000.00 Fund Balance a/c 3,175,000 Fund Balance a/c 1,662,000      17,958,500.00      12,002,000.00 Remaining Cash Balance         5,956,500.00