The general fund trial balance for the City of LO 3 Los Alvos at December 31, 2016,
Question:
The general fund trial balance for the City of LO 3 Los Alvos at December 31, 2016, follows:
Assigned fund balance consists of outstanding encumbrances. The following information is available for the year 2017:
1. The general fund adopted the following budget for 2017:
2. Property taxes totaling \($500,000\) were levied. Of this amount, \($50,000\) was estimated to be uncollectible. Collections during the year were \($430,000\) on currently levied taxes and \($60,000\) related to taxes declared delinquent in 2016. Delinquent taxes uncollected as of the end of 2017 were written off. All uncollected 2017 property taxes were classified as delinquent and \($15,000\) of these taxes are expected to be collected early in 2018.
3. The \($10,000\) federal grant accrued in 2016 was received in cash in early 2017. Of the \($100,000\) in federal grants expected and accrued in 2017, \($85,000\) was received in cash. Cash received for licenses and fines totaled \($34,000.\)
5. Cash payments for general government and human services activities were \($234,000\) and \($400,000,\) respectively. At the end of the year, the accounts payable balance was \($15,000\) and inventories totaled \($18,000.\) Accounts payable and inventories relate only to general government activities. Inventories costing \($6,000,\) relating to encumbrances outstanding at the beginning of the year, were received during 2017. \($4,000\) in inventory purchase orders were outstanding at the end of the year.
6. Transfers of \($14,000\) were made to the city’s debt service fund. The city’s community center enterprise fund paid back a \($2,000\) cash advance provided by the general fund in 2016. The general fund provided \($5,000\) to the capital projects fund for temporary financing of a project; this amount is expected to be paid back in 2018.
7. The general fund received a \($25,000\) cash advance from the city nursing home (an enterprise fund) to cover its cash deficit. It is expected to be paid back next year. The general fund uses the consumption method for inventory reporting, and the GAAP budgetary basis for year-end encumbrances.
Required
a. Prepare 2017 journal entries to record the above events in the general fund, and to close the books for the year.
b. Prepare the following financial statements for the City of Los Alvos general fund:
(1) Statement of revenues, expenditures, and changes in fund balances for the year 2017
(2) Balance sheet for the year ended December 31, 2017
(3) Budgetary comparison schedule for the year 2017.
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