Journal Entries, Closing Entries, and Trial Balance LO8 The general ledger trial

Question

Journal Entries, Closing Entries, and Trial Balance LO8 The general ledger trial balance of the General Fund of the City of Bedford on January 1, 2015, shows the EM 17-1 $100,000 Taxes Receivable Allowance for Uncollectible Taxes Fund Balance-Assigned (encumbrances from 2014) S 35,000 110,000 Total A summary of activities and transactions for the General Fund during 2015 is presented here: 1·The City Council adopted a budget for the General Fund with estimated revenues of $1,560,000 and autho- rization fr appropriated expenditures of $1,400,000. The budget authorized the transfer of $50,000 from] the Water Fund to the General Fund for operating expenses as a payment in lieu of taxes. Cash for the payment of interest due for the year on the $1,000,000, 8% bond issue for the Civic Center is approved for transfer from the General Fund to the Debt Service Fund. 2. The annual property tax levy of 10% on assessed valuation ($11,000,000) is billed to property owners. Two percent is estimated to be uncollectible. 3. Goods and services amounting to S1,150,000 were ordered during the year 4. Invoices for all goods ordered in 2014 amounting to $29,000 were approved for payment. 5. Funds for bond interest on Civic Center bonds were transferred to the Debt Service Fund 6. Invoices for goods and services received during the year totaling $1,155,000 were recorded. These were encumbered previously [see (3) above]. 7. Transfer of funds from the Water Company was received in lieu of taxes. 8. Taxes were collected from property owners in the amount of $1,050,000 . Past-due tax bills of $17,000 were charged off as uncollectible 10. Checks in payment of invoices for goods and services ordered in 2014 and 2015 were issued [see items (4) and (6) above). 11. Revenues received from miscellaneous sources, other than property taxes, of S$455,000 were recorded. 12. Purchase order for two trash collection vehicle systems complete with residence trash containers for automatic pickup of trash was issued. Bid price per system was $120,000.

Explanation / Answer

Part A)

The journal entries are provided as below:

_____

Part B)

The preclosing trial balance is prepared as follows:

_____

Part C)

The closing entries are provided as follows:

_____

Part D)

The postclosing trial balance is prepared as below:

Event Account Titles Debit Credit 1 Estimated Revenue $1,560,000 Appropriations $1,400,000 Unreserved Fund Balance $160,000 Due from Water Fund $50,000 Transfer from Water Fund $50,000 Transfer to Debt Service Fund $80,000 Due to Debt Service Fund $80,000 2 Property Tax Receivable (11,000,000* .10) $1,100,000 Revenue $1,078,000 Allowance for Uncollectible Taxes $22,000 3 Encumbrances $1,150,000 Reserve for Encumbrances $1,150,000 4 Expenditures - 2014 $29,000 Vouchers Payable $29,000 5 Due to Debt Service Fund $80,000 Cash $80,000 6 Expenditures $1,155,000 Vouchers Payable $1,155,000 Reserve for Encumbrances $1,150,000 Encumbrances $1,150,000 7 Cash $50,000 Due from Water Fund $50,000 8 Cash $1,050,000 Property Tax Receivable $1,050,000 9 Allowance for Uncollectible Taxes $17,000 Property Tax Receivable $17,000 10 Vouchers Payable (29,000 + 1,155,000) $1,184,000 Cash $1,184,000 11 Cash $455,000 Revenue $455,000 12 Encumbrances (120,000*2) $240,000 Reserve for Encumbrances $240,000

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