Question

The beginning balances as of 1/1/2017 for the City of Monroe's General Fund are listed below. The City follows the modified accrual accounting method for its general fund journal entries and financial statements. The following steps are required for this project.

Beginning balances: Cash $711,250; Delinquent Property Taxes Receivable $210,000; Allowance for Uncollectible Property Taxes $37,000; Accounts Payable $99,000; Due to Other Funds $27,000; Deferred Inflows of Resources $210,000; Total Fund Balance $548,250

Step 1) Record journal entries for the following transactions for FY2017 in Tab #1.

Step 2) Create a trial balance as of 12/31/2017 in Tab #1. Exclude any budgetary accounts from the trial balance.

Step 3) Record the appropriate closing entries in Tab #2. Outstanding encumbrances at year end are classified as Assigned Fund Balance and all remaining net resources are classified as Unassigned Fund Balance. The Supplies Inventory on hand at yearend was deemed immaterial and not classified as nonspendable. Based on this information, complete the Fund Balance Table in Tab #2.

Step 4) Prepare the Statement of Revenue, Expenditures and Changes in Fund Balance (Tab #3) and the Balance Sheet (Tab #4) for the General Fund as of 12/31/2017.

JE 1. As of January 1, 2017, the City Council approved and the mayor signed a budget calling for $11,150,000 in property tax and other revenue, $9,350,000 in appropriations for expenditures, and $1,700,000 to be transferred to the debt service funds for the payment of principal and interest.

2.Encumbrances of $170,000 for purchase orders outstanding at the end of 2016 were re-established.

3.The January 1, 2017, balance in Deferred Inflows – Property Taxes relates to the amount of the 2016 levy that was expected to be collected more than 60 days after December 31. This amount was also reclassified into delinquent receivables at the end of 2016. The full amount was collected in 2017.

4.A general tax levy in the amount of $6,800,000 was made for 2017 property taxes. It is estimated that 2.25% of the tax will be uncollectible.

5.Bonds in the amount of $500,000 were issued.

6.Goods and supplies related to all encumbrances outstanding as of December 31, 2016 were received, along with invoices amounting to $166,600. The City uses the Purchases Method to account for supplies inventory.

7.The amount due to other funds was paid. This went to the Proprietary Fund.

8.The General Fund collected the following in cash: o current year property taxes, $6,400,000; o sales taxes, $2,890,000.

9.Purchase orders for equipment were issued in the amount of $3,465,000.

10.Invoices for most of the equipment ordered in transaction 9 were received in the amount of $3,375,300 and paid. The related encumbrance amounted to $3,407,000.

11.The General Fund also transferred to the debt service funds cash in the amount of $1,662,000 for the recurring payment of principal and interest.

12.It is estimated that $10,500 of the outstanding taxes receivable will be collected more than 60 days beyond the fiscal year-end. The remaining balance in property tax receivable was transferred to delinquent property tax receivable.

13.The General Fund received supplies from the City's Internal Service Fund (proprietary fund) in the amount of $313,200. It still owes payment to the fund at yearend. The Purchase Method is used

Answer 1

Deferred Inflows of Revenue Dr		210000
to Revenue			210000
Property Tax Receivables		6800000
to Revenue			6800000
Bad Debts Dr		153000
to Property Tax Receivables			153000
Cash Balance Dr		500000
to Bonds			500000
Inventory Dr		166600
To Accounts Payable			166600
Other Funds Dr		27000
to Cash Balance			27000
Cash Accounts Dr		6400000
To property Tax Receivables			6400000
Cash Accounts Dr		2890000
To Sles Tax Receivables			2890000
Equipment Dr		3375300
to Cash Balance			3375300
General Fund Dr		1662000
To Debt Service Fund			1662000
Debt Service Fund Dr		1662000
To Cash			1662000
Property Tax Recevable Dr		10500
to Revenue			10500
Cash Account Dr		313200
To Total Fund Balance ( Equity )			313200
	Particulars			DR		CR	Accumulated Dr	Accumulated Cr	Dr	Cr
BS	Cash Balance			711250			10560300	3402300	7869250	0
BS	Property Tax Receivables			210000			6810500	7010000	10500	0
BS	Allowance for uncollectible property tax					37000			0	37000
BS	Accounts Payable					99000		166600	0	265600
BS	Other Funds					27000	27000		0	0
BS	Deferred Inflows of Revenue					210000	210000		0	0
BS	Total Fund Balance ( Equity )					548250		313300	0	861550
PL	Revenue							7020500	0	7020500
PL	Bad Debts						153000		153000	0
BS	Bonds							500000	0	500000
BS	Inventory						166600		166600	0
PL	Sales Tax Receivable							2890000	0	2890000
BS	Equipment						3375300		3375300	0
									0	0
				921250		921250	21302700	21302700	11574650	11574650