Question

The trial balance for the General Fund of the City of Topeka as of December 31, 2017 is presented below:     

CITY OF TOPEKA
The General Fund
Adjusted Trial Balance - December 31, 2017
	Debit	Credit
Cash	216,000
Property Tax Receivable	31,000
Estimated Uncollectible Taxes		8,000
Due from Trust Fund	41,000
Vouchers Payable		55,000
Reserve for Encumbrances		20,000
Unassigned Fund Balance		205,000
	288,000	288,000

Transactions for the year ended December 31, 2018 are summarized as follows:

1. The City Council adopted a budget for the year with estimated revenue of $750,000 and appropriations of $710,000.

2. Property taxes in the amount of $475,000 were levied for the current year.  It is estimated that $20,000 of the taxes levied will prove to be uncollectible.

3. Proceeds from the sale of equipment in the amount of $32,000 were received by the General Fund.  The equipment was purchased four years ago with resources of the General Fund at a cost of $200,000.  On the date it was purchased, it was estimated that the equipment had a useful life of six years.

4. Licenses and fees in the amount of $90,000 were collected.

5. The total amount of encumbrances against fund resources for the year was $595,000.

6. Vouchers in the amount of $435,000 were authorized for payment. This was $11,000 less than the amount originally encumbered for these purchases.

7. An invoice in the amount of $19,000 was received for goods ordered in 2017.  The invoice was approved for payment.

8. Property taxes in the amount of $425,000 were collected.

9. Vouchers in the amount of $385,000 were paid.

10. Forty-one thousand dollars was transferred to the General Fund from the Trust Fund.

11. The City Council authorized the write-off of $15,000 in uncollected property taxes.   

Required:

a. Prepare entries, in general journal form, to record the transactions for the year ended December 31, 2018.

b. Prepare the necessary closing entries for the year ending December 31, 2018.

Answer 1

Answer a	Journal Entries	Dr	Cr
1	No Entry required
2	Property Tax Receivable	455000
	Estimated Uncollectible Taxes	20000
	Income		475000
3	Cash	32,000
	Loss on Sale of Equipment	34,667
	Equipment		66,667
4	Cash	90000
	Income		90000
5	Unassigned Fund Balance	575000
	Reserve for Encumbrances		575000
6	Expenses	435000
	Vouchers Payble		435000
7	Expenses	19000
	Vouchers Payble		19000
8	Cash	425000
	Property Tax Receivable		425000
9	Vouchers Payble	385000
	Cash		385000
10	Cash	41000
	Due from Trust Fund		41000
11	Property Tax Write off	15000
	Estimated Uncollectible Taxes		15000
Answer b	Closing Entries	Debit	Credit
1	Income	565,000
	Loss on Sale of Equipment		34,667
	Expenses		454,000
	Property Tax Write off		15,000
	Unassigned Fund Balance		61,333
2	Cash	203,000
	Property Tax Receivable	30,000
	Estimated Uncollectible Taxes	5,000
	Due from Trust Fund		41,000
	Vouchers Payable		69,000
	Reserve for Encumbrances		575,000
	Unassigned Fund Balance	575,000
	Unassigned Fund Balance		61,333
	Equipment		66,667