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17 [4-a-17] Closing Entry Following the instructions in the next paragraph, prepare and post the necessary entries to close the Estimated Revenues and Appropriations accounts

17 [4-a-17] Closing Entry Following the instructions in the next paragraph, prepare and post the
necessary entries to close the Estimated Revenues and Appropriations accounts to
Budgetary Fund Balance, and Revenues and Expenditures to Fund BalanceUnassigned.
Because the City of Corvallis honors all outstanding encumbrances at year-end, it is not
necessary to close Encumbrances to Encumbrances Outstanding at year-end since
encumbrances do not affect the General Fund (GF) balance sheet or statement of revenues,
expenditures, and changes in fund balances. If, however, you would like to avoid having
these accounts appear in the post-closing trial balance, you can opt to close
Encumbrances to Encumbrances Outstanding. If the accounts are closed, they would
need to be reestablished at the beginning of the next year, although entries are not
required in this problem for the next year.
To close the temporary accounts (revenues, expenditures, other financing sources
& uses and budgetary accounts), you must select "Yes" in the [Closing Entry] column.
To determine the closing amounts for these temporary accounts, see the Preclosing TB
column of the Trial Balance out to the right of the ledger.
At year-end, an analysis by the citys finance department determined the following
constraints on resources in the General Fund (GF). Prepare the appropriate journal entry in the
General Fund (GF) to reclassify amounts between Fund BalanceUnassigned and the fund
balance accounts corresponding to the constraints shown below. (Note: You should
consider the beginning of year balances in fund balance accounts in calculating the
amounts to be reclassified.) In other words, you need to adjust these fund balances to the
balances shown here, using the Fund Balance-Unassigned account for your balancing entry:
Account Amount
Fund BalanceRestrictedPublic Safety $ 13,400
Fund BalanceCommittedPublic Works 26,400
Fund BalanceAssignedCulture & Recreation 50,600
See "Reclassification of Fund Balances" section in the textbook on page 137 for an example.

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