1. Calculate the amount of property tax revenues that Reiver City would recognize in the year 2013 given the following information.

According to the General Fund balance sheet on December 31, 2012, Reiver City reported Property Taxes Receivable of $40,000 and Deferred Property Tax Revenues of $15,000. At the start of the year in 2013, Reiver City made the following journal entry to record its property tax levy:

Property Taxes Receivable	950,000
Allowance for uncollectible property taxes		10,000
Revenues property taxes		940,000

During the year 2013, the city collected all of the property taxes receivable outstanding at December 31, 2012. It also collected $920,000 of the receivables recognized at the beginning of 2013, and wrote off $6,000 of bad debts against the allowance account. On December 31, 2013, the Reiver City finance director made the following determinations regarding the property taxes outstanding at that date:

a. All outstanding property taxes would be collected, so there was no need for the allowance for uncollectible property taxes.

b. The city would collect $15,000 of the outstanding property taxes during the first 60 days of 2014 and the remainder in the latter part of 2014.

2. The City of Smithburg accounts for its revenues and day-to-day operating expenditures in its General Fund.The Town uses encumbrance accounting to keep budgetary control over the appropriation for other expenditures.Prepare journal entries to record these transactions in the General Fund for the current calendar year.

a. The following budget is adopted at the beginning of the year:

Estimated revenues:
Property taxes		$ 315,000
Sales taxes		85,000
Appropriations:
Personal services		250,000
Supplies		43,000
Interest expenditures		3,000
Other financing uses		85,000

b. To raise the required $315,000 in property taxes, property owners are billed for a total of $317,000.This will allow $2,000 for estimated uncollectible property taxes.

c. To provide cash at the start of the year, the City borrows $100,000 on a tax anticipation note.The note will be repaid in six months with interest at 4% per annum.

d. The City sends a purchase order for $4,000 to a vendor for supplies.

e. The General Fund pays $85,000 to the Debt Service Fund (DSF) to enable the DSF to pay interest and principal on City debt.

f. The vendor from which the City order supplies (item d), delivers the supplies ordered and bills the City for $4,200.The City accepts delivery and prepares a voucher for the full amount of the bill.

g. Property owners pay property taxes in the amount of $300,000.

h. The City repays the $100,000 borrowed for the tax anticipation note (item c), along with the accrued interest.(The note is paid back on its due date)

i. The voucher established for the payment of supplies is approved at a city council meeting and payment is made to the appropriate vendor.

j. The City receives $80,000 for sales taxes collected by the state on behalf of the City.

k. H. Smith, a long-time resident, is unable to pay his $3,000 property tax bill in full.He pays $1,000, and the City writes off the remaining $2,000 as uncollectible.

l. The City declares all remaining unpaid property taxes to be delinquent.It also notifies delinquent property owners that they owe penalties of $2,000 on the delinquent taxes.

m. The City Council approves a budgetary interchange of $5,000 from the supplies appropriation to the personal services appropriation to meet unforeseen overtime costs.

n. The General Fund receives a bill from the Water Utility Fund for $6,000.

o. The City pays personal services in the amount of $253,000.

p. The City is notified by the state that it collected an additional$3,000 in December of the current year that it will remit in January of the following year.

Solutions

GENERAL JOURNAL Page

Date		Description of entry	Post Ref	Debit		Credit

GENERAL JOURNAL Page

Date		Description of entry	Post Ref	Debit		Credit