The following information is available concerning general fund activities of the City of Middletown for the year

Question:

The following information is available concerning general fund activities of the City of Middletown for the year 2017. Middletown uses the GAAP budgetary basis to account for encumbrances.

1. The general fund budget for 2017 consisted of the following items:

image text in transcribed 2. $$78,000$ in encumbrances were outstanding at the end of 2016.

3. Current property tax revenues of $$8,500,000$ were accrued at the beginning of the year, along witha current uncollectible portion of $$100,000.$ The general fund reported equal balances of $$25,000$ in its delinquent property taxes receivable and uncollectible allowance accounts at the beginning of the year.
4. At the end of the year, current property tax receivables of $$120,000$ remained uncollected. The current uncollectible accounts balance was $$40,000.$ Delinquent property taxes of $$15,000$ were collected during the year. The remaining delinquent balances were written off at the end of the year. The general fund’s policy is to fully reserve any remaining current property taxes receivable and reclassify them as delinquent.
5. General obligation bonds with a face value of $$500,000$ were issued at par. Interest at 4% of principal and $$20,000$ of principal are due annually in 2018. These bonds will be used to finance a community project, which is reported in the general fund. Principal payments will be handled through the debt service fund, but interest payments will be paid through the general fund.
6. The general fund sold equipment with an original cost of $$40,000$ for $$6,000,$ and purchased a building for $$200,000$ during 2017. Equipment with an original cost of $$30,000$ was retired during the year.
7. The transfers to the capital projects and enterprise funds were made as budgeted.

8. Actual expenditures (including the building purchase) for the year were $$8,720,000,$ of which $$80,000$ related to encumbrances outstanding at the beginning of the year. Encumbrances outstanding at year-end were $$130,000.$

Required

Answer the following questions related to Middletown’s general fund activities for 2017.

a. Present the beginning of 2017 budget and encumbrance entries. What is their net impact on fund balance— unassigned? ;

b. a is total property tax revenue for 2017? How much cash was collected from property taxes in 17?

c. How much in bond interest payable should be shown on the general fund’s year-end balance sheet? Prepare the end of 2017 closing entries for the general fund.

e. Present a general fund budgetary comparison schedule for 2017.

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