The statement at the bottom of this page (with changed dates) was prepared for the Sewer User Fee Fund of Tucson, Arizona, a fund that “accounts for sewer user fees collected by the city and remitted to Pima County.”
1. Prepare summary journal entries to record:
a. The recognition of interest
b. The receipt of interest
c. Collection of $30,000 in sewer fees not previously recognized as receivables
d. Payments to other governments of $45,000
2. Suppose $10,000 of the accounts receivable must be written off as uncollectible. Prepare an appropriate journal entry.