The Village of Margaret reported the following balance sheet at June 30, 20X5:

Budget and transaction information for the fiscal year ended June 30, 20X6, are presented below.
1. The city council of Margaret passed the following operating budget for fiscal 20X6:

2. Margaret uses the lapsing method of accounting for encumbrances. Appropriations for fiscal 20X6 include \(\$ 16,000\) for encumbrances related to fiscal \(20 \times 5\).
3. The property tax levy was \(\$ 220,000\) of which 4 percent was estimated to be uncollectible.
4. Cash was received from the following sources during fiscal \(20 \mathrm{X} 6\)

The remaining property taxes from fiscal \(20 \times 5\) were written off, and those remaining from fiscal 20X6 were reclassified to delinquent. The allowance for uncollectible taxes was reduced to \(\$ 6.000\).

5. Margaret ordered \(\$ 65,000\) of goods during the year, including the \(\$ 16,000\) of goods for which the encumbrances lapsed at the end of fiscal 20X5. All goods ordered during fiscal 20X6 were received by June 30, 20X6, except for an \(\$ 8,000\) order that was placed on June 15, 20X6. The actual cost of the goods acquired was \(\$ 58.000\). All but \(\$ 8,500\) of the invoices were paid at June \(30,20 \mathrm{X} 6\).
6. Expenditures incurred during fiscal \(20 \mathrm{X} 6\) that were not encumbered amounted to \(\$ 215,000\). All but \(\$ 12,000\) of these expenditures were paid during fiscal 20X6.
7. On July \(12,20 \times 5\). Margaret transferred \(\$ 8,000\) to the internal service fund to pay for services that were billed and recorded during June of 20X5. In addition, all of the vouchers payable at June 30. 20X5, were paid during July 20X5.
8. On February 24, 20X6, Margaret recorded the transfer out to the debt service fund. Margaret transferred the cash from the general fund to the debt service fund on March 1, 20X6.
9. Margaret uses the purchase method when it acquires supplies. At June 30, 20X6, Margaret had \(\$ 7,500\) of supplies that were not used.
\section*{Required}

a. Prepare entries to summarize the general fund budget and the transactions for fiscal 20X6, including adjusting and closing entries.

b. Prepare a balance sheet at June 30, 20X6.

Transcribed Image Text:

Village of Margaret Balance Sheet General Fund June 30, 20X5 Assets Cash $35,000 Property Taxes Receivable-Delinquent $22,000 Less: Allowance for Uncollectible Taxes-Delinquent (7,000) 15.000 Due from Enterprise Fund 10,000 Inventory of Supplies 5,000 Total Assets $65,000