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.

b. Prepare a preclosing trial balance.

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.)

d. Prepare closing journal entries.