Question

Listed below (in alphabetical order) are the general ledger and budgetary accounts for the City of Walland. All balances are year-end, unless otherwise noted. All accounts have a normal balance. At the end of the year, the City Council passed an ordinance that all outstanding orders would be honored in the following fiscal year. Also, the Finance Officer set aside $40 for equipment replacement. City of Walland Preclosing Trial Balance For the Year Ended June 30, 20X9 Advance to Enterprise Fund 1,000 Allowance for Uncollectible Taxes 300 Appropriations 8,850 Budgetary Fund Balance 150 Cash $5,000 Due from Special Revenue Fund 100 Encumbrances Outstanding 60 Encumbrances 60 Estimated Revenues 9,000 Expenditures – Capital Outlay 2,500 Expenditures – Operating 6,340 Fund Balance (July 1, 20X3) 9,505 Investments 2,500 OFS – Proceeds from Sale of Vehicle 50 OFS – Transfer from Capital Projects Fund 60 OFU – Transfer to Debt Service Fund 100 OFU – Transfer to Enterprise Fund 200 Revenues – Other 1,250 Revenues – Property Taxes 7,500 Salaries Payable 50 Special Item – Proceeds from Sale of Land 350 Supplies 175 Taxes Receivable 1,500 Vouchers Payable 350 Requirements: 1. Prepare the closing entries.

Answer 1

Closing entries revenue expense and capital withdrawal accounts are considered to be temporary accounts that are reset at the end of the given accounting period so that in the coming financial year they start with a zero balance.