Complete accounting cycle and financial statements

The city council of E. Staatsboro approved the following budget for the General Fund for fiscal year 2019.

Estimated Revenues
Property taxes	$335,000
License fees	40,000
Fines and penalties	15,000
Total revenues		$390,000
Appropriations
Salaries	$350,000
Supplies and utilities	30,000
Debt service	3,000
Total appropriations		383,000
Budgeted Increase in Fund Balance		$ 7,000

The postclosing trial balance for the fund, as of December 31, 2018, was as follows:

	Debits	Credits
Cash	$15,000
Vouchers payable		$ 8,000
Fund balance (unassigned)		7,000
	$15,000	$15,000

The following transactions and events occurred during FY 2019.

1. Levied property taxes of $335,000 and mailed tax bills to property owners.

2. Borrowed $300,000 on tax anticipation notes at an interest rate of 1 percent per annum.

3. Ordered supplies expected to cost $18,000.

4. The supplies arrived, along with an invoice for $19,000; the city paid the invoice immediately.

5. Received cash ($383,000) from the following sources: property taxes ($330,000), licenses and fees ($38,000), fines and penalties ($15,000).

6. Paid cash for the following purposes: unpaid vouchers at the start of year ($8,000); salaries ($340,000); utility bills ($11,000).

7. Repaid the tax anticipation notes 6 months after date of borrowing, with interest.

8. Processed a budgetary interchange, increasing the appropriation for supplies and utilities by $2,000 and reducing the appropriation for salaries by the same amount.

9. Will pay salaries for the last few days in December, amounting to $2,000, at the end of the first pay period in January 2020; also, received in early January 2020 a utilities invoice for $1,000 applicable to December 2019.

Use the preceding information to do the following:

a. Prepare journal entries to record the budget and the listed transactions and events.

Ref.	Description		Debit	Credit
	AnswerAppropriations-salariesEstimated revenues-property taxes Expenditures-salariesRevenues-property taxes		Answer	Answer
	AnswerAppropriations-supplies and utilitiesEstimated revenues-licenses and fees Expenditures-supplies and utilitiesRevenues-licenses and fees		Answer	Answer
	AnswerAppropriations-debt serviceEstimated revenues-fines and penalitesExpenditures-debt serviceRevenues-fines and penalities		Answer	Answer
	AnswerAppropriations-salariesEstimated revenues-property taxes Expenditures-salariesRevenues-property taxes		Answer	Answer
	AnswerAppropriations-supplies and utilitiesEstimated revenues-licenses and fees Expenditures-supplies and utilitiesRevenues-licenses and fees		Answer	Answer
	AnswerAppropriations-debt serviceEstimated revenues-fines and penalitesExpenditures-debt serviceRevenues-fines and penalities		Answer	Answer
	AnswerBudgetary fund balance Fund balance		Answer	Answer
	To record budget.
1	AnswerAccrued expenditures payableAppropriations salariesAppropriations supplies and utilitiesBudgetary fund balance reserved for encumbrancesCashEncumbrances supplies and utilitiesExpenditures debt serviceExpenditures supplies and utilitiesProperty taxes receivableRevenues property taxesTax anticipation notes payableVouchers payable		Answer	Answer
	AnswerAccrued expenditures payableAppropriations salariesAppropriations supplies and utilitiesBudgetary fund balance reserved for encumbrancesCashEncumbrances supplies and utilitiesExpenditures debt serviceExpenditures supplies and utilitiesProperty taxes receivableRevenues property taxesTax anticipation notes payableVouchers payable		Answer	Answer
	To record property tax levy.
2	AnswerAccrued expenditures payableAppropriations salariesAppropriations supplies and utilitiesBudgetary fund balance reserved for encumbrancesCashEncumbrances supplies and utilitiesExpenditures debt serviceExpenditures supplies and utilitiesProperty taxes receivableRevenues property taxesTax anticipation notes payableVouchers payable		Answer	Answer
	AnswerAccrued expenditures payableAppropriations salariesAppropriations supplies and utilitiesBudgetary fund balance reserved for encumbrancesCashEncumbrances supplies and utilitiesExpenditures debt serviceExpenditures supplies and utilitiesProperty taxes receivableRevenues property taxesTax anticipation notes payableVouchers payable		Answer	Answer
	To record short-term borrowing
3	AnswerAccrued expenditures payableAppropriations salariesAppropriations supplies and utilitiesBudgetary fund balance reserved for encumbrancesCashEncumbrances supplies and utilitiesExpenditures debt serviceExpenditures supplies and utilitiesProperty taxes receivableRevenues property taxesTax anticipation notes payableVouchers payable		Answer	Answer
	AnswerAccrued expenditures payableAppropriations salariesAppropriations supplies and utilitiesBudgetary fund balance reserved for encumbrancesCashEncumbrances supplies and utilitiesExpenditures debt serviceExpenditures supplies and utilitiesProperty taxes receivableRevenues property taxesTax anticipation notes payableVouchers payable		Answer	Answer
	To record encumbrance.
4	AnswerAccrued expenditures payableAppropriations salariesAppropriations supplies and utilitiesBudgetary fund balance reserved for encumbrancesCashEncumbrances supplies and utilitiesExpenditures debt serviceExpenditures supplies and utilitiesProperty taxes receivableRevenues property taxesTax anticipation notes payableVouchers payable		Answer	Answer
	AnswerAccrued expenditures payableAppropriations salariesAppropriations supplies and utilitiesBudgetary fund balance reserved for encumbrancesCashEncumbrances supplies and utilitiesExpenditures debt serviceExpenditures supplies and utilitiesProperty taxes receivableRevenues property taxesTax anticipation notes payableVouchers payable		Answer	Answer
	To reverse encumbrance.
	AnswerAccrued expenditures payableAppropriations salariesAppropriations supplies and utilitiesBudgetary fund balance reserved for encumbrancesCashEncumbrances supplies and utilitiesExpenditures debt serviceExpenditures supplies and utilitiesProperty taxes receivableRevenues property taxesTax anticipation notes payableVouchers payable		Answer	Answer
	AnswerAccrued expenditures payableAppropriations salariesAppropriations supplies and utilitiesBudgetary fund balance reserved for encumbrancesCashEncumbrances supplies and utilitiesExpenditures debt serviceExpenditures supplies and utilitiesProperty taxes receivableRevenues property taxesTax anticipation notes payableVouchers payable		Answer	Answer
	To record expenditure.
	AnswerAccrued expenditures payableAppropriations salariesAppropriations supplies and utilitiesBudgetary fund balance reserved for encumbrancesCashEncumbrances supplies and utilitiesExpenditures debt serviceExpenditures supplies and utilitiesProperty taxes receivableRevenues property taxesTax anticipation notes payableVouchers payable		Answer	Answer
	AnswerAccrued expenditures payableAppropriations salariesAppropriations supplies and utilitiesBudgetary fund balance reserved for encumbrancesCashEncumbrances supplies and utilitiesExpenditures debt serviceExpenditures supplies and utilitiesProperty taxes receivableRevenues property taxesTax anticipation notes payableVouchers payable		Answer	Answer
	To record payment of voucher.
5	AnswerAccrued expenditures payableAppropriations salariesAppropriations supplies and utilitiesBudgetary fund balance reserved for encumbrancesCashEncumbrances supplies and utilitiesExpenditures debt serviceExpenditures supplies and utilitiesProperty taxes receivableRevenues property taxesTax anticipation notes payableVouchers payable		Answer	Answer
	AnswerAccrued expenditures payableAppropriations salariesAppropriations supplies and utilitiesBudgetary fund balance reserved for encumbrancesCashEncumbrances supplies and utilitiesExpenditures debt serviceExpenditures supplies and utilitiesProperty taxes receivableRevenues property taxesTax anticipation notes payableVouchers payable		Answer	Answer
	Revenues licenses and fees		Answer	Answer
	Revenues fines and penalties		Answer	Answer
	To record cash receipts.
6	Expenditures salaries		Answer	Answer
	Expenditures supplies and utilities		Answer	Answer
	AnswerAccrued expenditures payableAppropriations salariesAppropriations supplies and utilitiesBudgetary fund balance reserved for encumbrancesCashEncumbrances supplies and utilitiesExpenditures debt serviceExpenditures supplies and utilitiesProperty taxes receivableRevenues property taxesTax anticipation notes payableVouchers payable		Answer	Answer
	AnswerAccrued expenditures payableAppropriations salariesAppropriations supplies and utilitiesBudgetary fund balance reserved for encumbrancesCashEncumbrances supplies and utilitiesExpenditures debt serviceExpenditures supplies and utilitiesProperty taxes receivableRevenues property taxesTax anticipation notes payableVouchers payable		Answer	Answer
	To record cash payments.
7	Tax anticipation notes payable		Answer	Answer
	AnswerAccrued expenditures payableAppropriations salariesAppropriations supplies and utilitiesBudgetary fund balance reserved for encumbrancesCashEncumbrances supplies and utilitiesExpenditures debt serviceExpenditures supplies and utilitiesProperty taxes receivableRevenues property taxesTax anticipation notes payableVouchers payable		Answer	Answer
	AnswerAccrued expenditures payableAppropriations salariesAppropriations supplies and utilitiesBudgetary fund balance reserved for encumbrancesCashEncumbrances supplies and utilitiesExpenditures debt serviceExpenditures supplies and utilitiesProperty taxes receivableRevenues property taxesTax anticipation notes payableVouchers payable		Answer	Answer
	To record repayment of TANs.
8	AnswerAccrued expenditures payableAppropriations salariesAppropriations supplies and utilitiesBudgetary fund balance reserved for encumbrancesCashEncumbrances supplies and utilitiesExpenditures debt serviceExpenditures supplies and utilitiesProperty taxes receivableRevenues property taxesTax anticipation notes payableVouchers payable		Answer	Answer
	AnswerAccrued expenditures payableAppropriations salariesAppropriations supplies and utilitiesBudgetary fund balance reserved for encumbrancesCashEncumbrances supplies and utilitiesExpenditures debt serviceExpenditures supplies and utilitiesProperty taxes receivableRevenues property taxesTax anticipation notes payableVouchers payable		Answer	Answer
	To record budgetary interchange.
9	Expenditures salaries		Answer	Answer
	AnswerAccrued expenditures payableAppropriations salariesAppropriations supplies and utilitiesBudgetary fund balance reserved for encumbrancesCashEncumbrances supplies and utilitiesExpenditures debt serviceExpenditures supplies and utilitiesProperty taxes receivableRevenues property taxesTax anticipation notes payableVouchers payable		Answer	Answer
	AnswerAccrued expenditures payableAppropriations salariesAppropriations supplies and utilitiesBudgetary fund balance reserved for encumbrancesCashEncumbrances supplies and utilitiesExpenditures debt serviceExpenditures supplies and utilitiesProperty taxes receivableRevenues property taxesTax anticipation notes payableVouchers payable		Answer	Answer
	To record accruals for 2019 expenditures.

b. Prepare a preclosing trial balance.

E. Staatsboro General Fund Pre-closing Trial Balance 12/31/2019
		Debit	Credit
Budgetary accounts:
Estimated revenues property taxes		$Answer	$Answer
Estimated revenues licenses and fees		Answer	Answer
Estimated revenues fines and penalties		Answer	Answer
Appropriations salaries		Answer	Answer
Appropriations supplies and utilities		Answer	Answer
Appropriations debt service		Answer	Answer
Budgetary fund balance		Answer	Answer
Financial accounts:
Cash		Answer	Answer
Property taxes receivable		Answer	Answer
Accrued expenditures payable		Answer	Answer
Fund balance (unassigned)		Answer	Answer
Revenues property taxes		Answer	Answer
Revenues licenses and fees		Answer	Answer
Revenues fines and penalties		Answer	Answer
Expenditures salaries		Answer	Answer
Expenditures supplies and utilities		Answer	Answer
Expenditures debt service		Answer	Answer
Totals		$Answer	$Answer

c. Prepare a balance sheet; a statement of revenues, expenditures, and changes in fund balance; and a budgetary comparison schedule. (Make sure you consider journal entry 8 when you prepare the budgetary comparison schedule.)

E. Staatsboro General Fund Balance Sheet December 31, 2019
Assets:
Cash		$Answer
Property taxes receivable		Answer
Total assets			$Answer
Liabilities:
Accrued expenditures payable		$Answer
Total liabilities			$Answer
Fund Balance:
Unassigned			Answer
Total liabilities and fund balance			$Answer

Do not use negative signs with any answers in the table below.

E. Staatsboro General Fund Statement of Revenues, Expenditures, and Changes in Fund Balance For the Year Ended December 31, 2019
Revenues:
Property taxes		$Answer
Licenses and fees		Answer
Fines and penalties		Answer
Total revenues			$Answer
Expenditures:
Salaries		Answer
Supplies and utilities		Answer
Debt service		Answer
Total expenditures			Answer
Excess of revenues over expenditures and net change in fund balance			Answer
Fund balance, beginning of year			Answer
Fund balance, end of year			$Answer

Use negative signs with answers in the Variance column, when appropriate.

E. Staatsboro General Fund Budgetary Comparison Schedule For the Year Ended December 31, 2019
		Original Budget	Final Budget	Actual	Variance
Revenues:
Property taxes		$Answer	$Answer	$Answer	$Answer
Licenses and fees		Answer	Answer	Answer	Answer
Fines and penalties		Answer	Answer	Answer	Answer
Total revenues		Answer	Answer	Answer	Answer
Expenditures:
Salaries		Answer	Answer	Answer	Answer
Supplies and utilities		Answer	Answer	Answer	Answer
Debt service		Answer	Answer	Answer	Answer
Total expenditures		Answer	Answer	Answer	Answer
Excess of revenues over expenditures and net change in fund balance		Answer	Answer	Answer	Answer
Fund balance, beginning		Answer	Answer	Answer	Answer
Fund balance, end of year		$Answer	$Answer	$Answer	$Answer

d. Prepare closing journal entries.

Description		Debit	Credit
AnswerAppropriations-salariesEstimated revenues-property taxesExpenditures-salariesRevenues-property taxes		Answer	Answer
AnswerAppropriations-supplies and utilitiesEstimated revenues-licenses and feesExpenditures-supplies and utilitiesRevenues-licenses and fees		Answer	Answer
AnswerAppropriations-debt serviceEstimated revenues-fines and penalitesExpenditures-debt serviceRevenues-fines and penalities		Answer	Answer
AnswerBudgetary fund balanceFund balance		Answer	Answer
AnswerAppropriations-salariesEstimated revenues-property taxesExpenditures-salariesRevenues-property taxes		Answer	Answer
AnswerAppropriations-supplies and utilitiesEstimated revenues-licenses and feesExpenditures-supplies and utilitiesRevenues-licenses and fees		Answer	Answer
AnswerAppropriations-debt serviceEstimated revenues-fines and penalitesExpenditures-debt serviceRevenues-fines and penalities		Answer	Answer
To close budgetary accounts
AnswerAppropriations-salariesEstimated revenues-property taxesExpenditures-salariesRevenues-property taxes		Answer	Answer
AnswerAppropriations-supplies and utilitiesEstimated revenues-licenses and feesExpenditures-supplies and utilitiesRevenues-licenses and fees		Answer	Answer
AnswerAppropriations-debt serviceEstimated revenues-fines and penalitesExpenditures-debt serviceRevenues-fines and penalities		Answer	Answer
AnswerAppropriations-salariesEstimated revenues-property taxesExpenditures-salariesRevenues-property taxes		Answer	Answer
AnswerAppropriations-supplies and utilitiesEstimated revenues-licenses and feesExpenditures-supplies and utilitiesRevenues-licenses and fees		Answer	Answer
AnswerAppropriations-debt serviceEstimated revenues-fines and penalitesExpenditures-debt serviceRevenues-fines and penalities		Answer	Answer
AnswerBudgetary fund balanceFund balance		Answer	Answer
To close financial accounts