EADCCHAPTER 4 ACCT 3...Saved to my Mac Sear out References Mailings Review View
ID: 2340530 • Letter: E
Question
EADCCHAPTER 4 ACCT 3...Saved to my Mac Sear out References Mailings Review View cture Format 1) Selected transactions of the City of Miser Station G for the 20X1 fiscal year are presente d on the following page. All amounts are in thousands of dollars General nstructions a. Dates and formal explanations may be omitted, but rumber your entries appropriately b. All interest rates are annual percentage rates (APRs). c. When recording Reverues, classify them as Revenwes-Property Taxes or Revenues-Ofher. When recording y them as E Outluy. d. Show all work for any amount raqw tred in aon mtry that is notgiven in the exam (except when recording the amount nece ssary to balance the joumal entry) Requirements 1. Prepare the General Fund general ledger joumal entries for the transactions If no entry is required, do not leave it blank State "No Entry Repired and briefly explain why 2. For any transaction affecting the General Capital Assets or General Long-Term Liablities accounts ndicate the amount of effect on each element of the accounting equation for those accounts. If a transaction has no effect on a particular element use "NE. 1. The City Council approved the follovwing budget for the fiscal year 520,000 18900 Estimated Revenues Of these amounts, $15,000 is for operating expenditures and $12,000 is for property tax revenues. 2. The property tax levy was recorded $12,000 of which $600 will probably prove uncollectible. 3. Purchase orders were approved and issued for the following 5150 20 Police vehide All of the non-inventory supplies on order from entry 3 were received. The actual cost was $1.55 and payment will be made at a later date. 5. Cash mceipts were (see entry 2 Taxes $10,500 License and Permits Fines and Forfeits Investment E Total Receipts 25 6. Current taxes recelvable (entries 2 and 5) and the related allowance (entry 2) were reclassified as de linquent after the due date. 7. A loan of $50 was made from the General Fund to the City Gasoline Tax Fund (CGTF) which is accounted for as a Spedal Revenue Fund. The loan will be repaid infive years 8. The $10 of remaining assets (cash) from a terminated Capital Projects Fund (CPF) were received ish (United States)Explanation / Answer
The journal entries can be as follows:
Property tax- Bad Debts A/c Dr.600.00
To Revenue- Property Tax A/c Cr.12,000.00
(Being property tax revenue recorded)
3. No entry required as it is just purchase orders, actual entries are based on actual purchases.
4.Credit Purchase- Non inventory supplies A/c Dr. 155
To Non inventory supplies creditors- Cr.155
(Being credit purchases made)
5. Cash A/c Dr. 10,600.00
To Property tax- Debtors A/c – Cr.10,500.00
To Revenue-Others A/c -Cr.100.00
(Being revenue received)
6. Property Tax-Bad debts A/c Dr. 900.00
To Property tax- Debtors A/c- Cr.900.00
(Being property tax considered as delinquent)
7. Loan to CGTF A/c- Dr. 50.00
To CGT Fund A/c - Cr.50.00
(Being Loan paid to CGTF )
CGT Fund A/c – Dr.50.00
To Cash A/c – Cr.50.00
(Being amount transferred to CGT Fund)
8. Cash A/c – Dr. 10.00
To Revenue- others A/c – Cr. 10.00
(Being amount received from CP Fund)
9. Cash A/c – Dr. 5.00
Loss on sale of Asset A/c –Dr.4.00
To Gen Fund Asset-Truck A/c –Cr. 9.00
(Being truck sold at a loss of $4)
Working:
Original Cost of truck = $30
Salvage value = $0
Life of the truck 10 years
Therefore, per y ear depreciation of the truck = ($30-$0)/10 = $3 per year
Book value of the truck at the end of 7th year = $30 - $3*7 = $9
Sale value of the truck = $5
Loss on sale of truck = $9 - $5 = $4
10. Expense-Operating - City employee expense A/c Dr. $25.00
To Cash A/c – Cr.$25.00
(Being cash paid to city employees)
11. Cash A/c- Dr. 300.00
To Gen fund Asset- Land A/c – Cr.140.00
To gain on sale of asset A/c – Cr. 160.00
(Being land sold at profit)
Working: Since there is zero depreciation on land the book value of land will remain same over the years.
12. Expense- Capital outlay-Capital projects fund expense A/c – Dr. 250.00
To Cash A/c – Cr.250.00
(Being amount paid to capital projects fund)
13. Finance expense-Long term debt fund A/c – Dr. 140.00
To Cash A/c – Cr. 140.00
(Being money transferred to long term debt fund)
14. General fund asset-Police vehicle – Dr A/c 19.00
To Cash A/c- Cr.19.00
(Being police vehicle purchased)
15. Finance expense-Long term debt fund A/c – Dr. 500.00
To Cash A/c – Cr. 500.00
(Being paid for upcoming interest and principle)
16. Expenditure capital outlay- Airport A/c Dr. 2000.00
Loan to CAE Fund A/c Dr.3000.00
To CAE Fund A/c Cr.5000.00
(Being amount expensed for expansion project)
CAE Fund A/c – Dr.5000.00
To Cash A/c – Cr.5000.00
(Being amount paid to CAE Fund)
17. Loan to capital projects fund A/c- Dr. 320.00
To Cash A/c- Cr.320.00
(Being loan paid to capital projects fund for 90 days)
18. Operating expense-Salaries A/c Dr. 12.00
To Cash A/c – Cr. 12.00
(Being amount paid to general fund for salaries)
19. Operating Expense- Electricity A/c Dr. 300.00
To Electricity expense payable A/c-Cr.300.00
(Being amount recorded as electricity expense)
20. No entry required. To be entered when money is received.
21. Cash A/c- Dr. 25.00
To Library Fund A/c- Cr. 25.00
(Being Money received for electricity bill)
22. Bad Debts Written off A/c - Dr. 100.00
To Property Tax-Band debts A/c - Cr. 100.00
(Being bad debts written off)
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