loader  Loading... Please wait...

Question(s) / Instruction(s):

43.          (Journal entries - comprehensive problem)

The Town of Elderville accounts for its revenues and day-to-day operating expenditures in its General Fund. The Town uses encumbrance accounting to keep budgetary control over the appropriation for "other expenditures." Prepare journal entries to record these transactions in the General Fund for the calendar year 2009.
          a.     The following budget is adopted at the beginning of the year:
               Estimated revenues:
                    Property taxes               $315,000
                    Sales taxes                85,000
               Appropriations:
                    Personal services                250,000
                    Supplies               43,000
                    Interest expenditures               3,000
                    Other financing uses               85,000
          b.     To raise the required $315,000 in property taxes, property owners are billed for a total of $317,000. This will allow $2,000 for estimated uncollectible property taxes.
          c.     To provide cash at the start of the year, the Town borrows $100,000 on a tax anticipation note. The note will be repaid in six months with interest at 4% per annum.
          d.     The Town sends a purchase order for $4,000 to a vendor for supplies.
          e.     The General Fund pays $85,000 to the Debt Service Fund (DSF) to enable the DSF to pay interest and principal on Town debt.
          f.     The vendor in d., above, delivers the supplies ordered by the Town, and bills the Town for $4,200. The Town accepts delivery and prepares a voucher for the full amount of the bill.
          g.     Property owners pay property taxes in the amount of $300,000.
          h.     The Town repays the $100,000 borrowed in c., above, together with interest.
          i.     The voucher in f., above, is paid.

     
          j.     The Town receives $80,000 for sales taxes collected by the state on behalf of the Town.
          k.     S. Sparrow, a long-time resident, is unable to pay his $3,000 property tax bill in full. He pays $1,000, and the Town writes off the remaining $2,000 as uncollectible.
          l.     The Town declares all remaining unpaid property taxes to be delinquent. It also notifies delinquent property owners that they owe penalties of $2,000 on the delinquent taxes.
          m.     The Town Council approves a budgetary interchange of $5,000 from the supplies appropriation to the personal services appropriation to meet unforeseen overtime costs.
          n.     The General Fund receives a bill from the Water Utility Fund for $6,000. (Note: Charge this to supplies expenditures. No encumbrance is necessary.)
          o.     The Town pays personal services in the amount of $253,000.
          p.     The Town is notified by the state that it collected an additional $3,000 in December 2009 sales taxes that it will remit to the Town on January 20, 2010.

Find Similar Answers by Subject


Student Reviews

Rate and review your solution! (Please rate on a Scale of 1 - 5. Top Rating is 5.)


Expert's Answer
Download Solution:
$2.00

This solution includes:

  • Plain text
  • Cited sources when necessary
  • Attached file(s)
  • Solution Document(s)

You Recently Viewed...



Reach Us

408-538-8534

20-3582-4059

39-008-4233

+1-408-904-6494