Question

Accounting

1. Because of a change in a state law, Romulus County has been informed that it will receive $100,000 less in state revenue than was budgeted.

2. Purchase orders and other commitment documents in the amount of $1,032,000 were issued during the six months ended April 30, 2005.

3. Property taxes of $6,500 and interest and penalties receivable of $1,340, which had been written off in prior years, were collected. Additional interest of $270 that had accrued since the write-off was collected at the same time.

4. Personnel costs, excluding the employer's share of the FICA tax, totaled $338,420 for the second six months. Withholdings amounted to $25,890 for FICA, $42,510 for employees' federal income tax liability, and $14,400 for state withholding tax. The balance was paid to employees in cash.

5. The employer's FICA tax of $25,890 was recorded as a liability.

6. The County Board of Review discovered unassessed properties of a total taxable value of $500,000 located within the county. The owners of these properties were charged taxes at the County's General Fund rate of $5 per hundred dollars of assessed value. (You need not adjust the Estimated Uncollectible Current Taxes account.)

7. The following were collected in cash: Current taxes of $927,000, delinquent taxes of $43,270, interest and penalties of $7,330, and revenues of $593,700 from a number of sources. (No part of any of these amounts is included in any other transaction given.)

8. Accrued interest and penalties, estimated to be 30 percent uncollectible, was recorded in the amount of $23,200.

9. All unpaid current year's taxes became delinquent. The balances of current tax receivables and related estimated uncollectibles were transferred to the delinquent classification.

10. All amounts due to the federal government and state government were vouchered.

11. Invoices and bills for goods and services that had been encumbered at $1,097,240 were received.

12. Personal property taxes of $39,940 and interest and penalties of $4,180 were written off because of the inability to locate the property owners.

13. A physical inventory of materials and supplies at April 30, 2005, showed a total of $19,100. Inventory is recorded using the consumption method.

14. Payments made on vouchers during the second half-year totaled $1,202,600.

Required

a. Record in general journal form the effect on the General Fund and governmental activities for the second half of fiscal year 2005.

b. Record in general journal form entries to close the budgetary accounts and operating statement accounts.

c.Prepare a General Fund Balance Sheet as of April, 2005

d. Prepare a statement of revenues, expenditures and changes in fund balance for the fiscal year ended April 30,2005. Do not prepare the government-wide financial statement

Answer 1

Journal Entries Event-Wise:

1. Fund Balance A/c Dr. $100,000

To Estimated Revenues A/c $100,000

2. Unreserved Fund Balance A/c Dr. $1,032,000

To Reserve for Encumbrances $1,032,000

3. Cash A/c Dr. $8,110

To Allowance for Uncollectible Accounts Receivable $7,840

To Revenues $270

4 & 5.. Expenditure- Salaries A/c Dr. $364,310

To Payables A/c $25,890

To Cash a/c $255,620

To Witholding Taxes A/c $82,800

6. Cash A/c Dr. $25,000

To Revenues A/c $25,000

7. Cash A/c Dr. $1,571,300

To Taxes Receivable- Current $927,000

To Taxes Receivable-Delinquent $43,270

To Revenues $601,030

8. Allowance for Uncollectible Accounts Dr.6,960

To Account Receivable 6,960

9.Taxes Receivable- Delinquent A/c Dr

To Taxes Receivable- Current

Estimated Revenues-Delinquent A/c Dr.

To Estimated Revenues A/c

11. Reserve for Encumbrance A/c Dr.$1,097,240

To Encumbrances $1,097,240

Expenditures- General Management A/c Dr. $1,097,240

To Payables A/c $1,097,240

12. Allowance for Uncollectible Accounts Dr.44,120

To Taxes Receivable- Current 44,120

13. Inevntory A/c Dr.$19,100

To Revenue A/c $19,100

14. Payables A/c Dr. $1,202,600

To Cash A/c $1,202,600

CLOSING JOURNAL ENTRIES
Revenues Dr.	$     645,400.00
Other Financing Sources Dr.	$ 1,032,000.00
To Expenditures		$ 1,461,550.00
To Unreserved Fund Balance Dr.		$     215,850.00
(All revenue and expenditure accounts closed and balance transferred to unreserved/unassigned fund balance)