(CPA Examination question on activities of a General Fund)

The General Fund trial balance of the City of Solna at December 31, 2004, was as follows:

Collectible delinquent taxes are expected to be collected within 60 days after the end of the year. Solna uses the purchases method to account for stores inventory. The following data pertain to 2004 General Fund operations:

2. Taxes were assessed at an amount that would result in revenues of $\$ 220,800$, after deduction of 4 percent of the tax levy as uncollectible.
3. Orders placed:

4. The city council designated $\$ 20,000$ of the unreserved, undesignated fund balance for possible future appropriation for capital outlays.
5. Cash collections and transfer:

6. Vouchers received against encumbrances:

7. Vouchers processed on items not requiring encumbrances:

8. Albert, a taxpayer, overpaid his 2004 taxes by $\$ 2,000$. He applied for a $\$ 2,000$ credit against his 2005 taxes. The city council granted his request.
9. Vouchers paid amounted to $\$ 580,000$.
10. Stores inventory on December 31,2004 , amounted to $\$ 12,000$.
Required: Prepare journal entries to record the effects of the foregoing data as well as closing entries. Omit explanations.

Transcribed Image Text:

Debits Credits Cash Taxes receivable-delinquent Estimated uncollectible taxes-delinquent Stores inventory-program operations Vouchers payable Fund balance reserved for stores inventory Fund balance reserved for encumbrances Unreserved, undesignated fund balance S 62,000 46,000 $ 8,000 18,000 28,000 18,000 12,000 60,000 $126,000 $126,000