The town of Duluth uses a general fund. The trial balance for December 31 of the current year is recorded on a work sheet in the Working Papers. The following adjustment information is available.

An estimated 20% oft he interest revenue due will not be collected.
The reserve for encumbrances for the current year is reclassified to prior year status.

Instructions:

1. Analyze the adjustment information and record the adjustments on the work sheet.

2. Complete the work sheet.
Duluth’s general fund operating budget for the current fiscal year is as follows.

3. Prepare a statement of revenues, expenditures, and changes in fund balance—budget and actual for the year ended December 31 of the current year. The unreserved fund balance on January 1 was \($35,550.00.\)

4. Prepare a balance sheet for December 31 of the current year.

5. Use page 42 of a journal. Journalize the adjusting entries.

6. Continue using page 42 of the journal. Journalize the closing entries.

Transcribed Image Text:

Supplies Inventory Interest Revenue Due but not Collected Adjustment Information, December 31 $2,900.00 2,350.00