Exercise 4-27 (Static) Operating Transactions and Financial Statements [LO 4-1, 4-2, 4-3] The City of Castleton's General Fund had the following post-closing trial balance at June 30, 2022, the end of its fiscal year: Credits Debits $265,120 11,000 183,000 $ 21,960 6,280 1,160 Cash Sales Taxes Receivable Taxes Receivable-Delinquent Allowance for Uncollectible Delinquent Taxes Interest and Penalties Receivable Allowance for Uncollectible Interest and Penalties Inventory of Supplies Vouchers Payable Due to Federal Government Deferred Inflows of Resources-Unavailable Revenues Fund Balance-Nonspendable-Inventory of Supplies Fund Balance-Unassigned 6,100 48,500 29,490 166, 160 6,100 198,130 $471,500 $471,500 a. Record the effect of the following transactions on the General Fund and governmental activities for the year ended June 30, 2023. b. Record in general journal form entries to close the budgetary and operating statement accounts in the General Fund only. c. Prepare a General Fund balance sheet as of June 30, 2023. d. Prepare a General Fund statement of revenues, expenditures, and changes in fund balance for the year ended June 30, 2023. Transaction Fund / Governmental Activities General Journal Debit Credit 1. The budget for FY 2023 provided for General Fund estimated revenues totaling $3,140,000, appropriations totaling $3,000,000, and an other financing useinterfund transfer out of $100,000. 1 General Fund Estimated Revenues 3,140,000 Appropriations 3,000,000 Budgetary Fund Balance 40.000 2. The city council authorized temporary borrowing of $500,000 in the form of a 120-day tax anticipation note obtained from a local bank. General Fund and Governmental Activities Cash 500,000 Tax Anticipation tes Payable 500,000 3. The property tax levy for FY 2023 was recorded. Net assessed valuation of taxable property for the year was $43,000,000, and the tax rate was $5 per $100. It was estimated that 3 percent of the levy would be uncollectible. 3 General Fund Taxes Receivable-Current 2,150,000 Allowance for Uncollectible Current Taxes 64,500 Revenues 2,085,500 2,150,000 Governmental Activities Taxes ReceivableCurrent Allowance for Uncollectible Current Taxes Revenues 64,500 2.085,500 4. Purchase orders and contracts were issued to vendors and others in the amount of $2,060,000. General Fund Encumbrances Encumbrances Outstanding 4 2,060,000 2,060,000 Governmental Activities No Journal Entry Required 5. $1,961,000 of current taxes, 5103.270 of delinquent taxes, $3,570 of interest and penalties, and $11,000 of accrued sales taxes were collected. The delinquent taxes and associated interest and penalties were collected more than 60 days after the prior year-end. Record the $1,961,000 of current taxes, $103,270 of delinquent taxes, and $3,570 of interest and penalties collected 5a General Fund Cash 2,067,840 Taxes ReceivableCurrent 1,961,000 Taxes Receivable-Delinquent 103,270 Interest and Penalties Receivable 3,570 5b Record the delinquent taxes and associated interest and penalties collected more than 60 days after the prior year-end. Deferred Inflows of Resources-Unavailable Revenues 106,840 Revenues 106,840 5c Governmental Activities Record the $1,961,000 of current taxes, $103,270 of delinquent taxes, and $3,570 of interest and penalties collected Cash 2,067,840 Taxes Receivable-Current 1,961,000 Taxes Receivable-Delinquent 103,270 Interest and Penalties Receivable 3,570 5d Record the delinquent taxes and associated interest and penalties collected more than 60 days after the prior year-end. No Journal Entry Required 6 6. Additional interest and penalties on delinquent taxes were accrued in the amount of $3,430, of which 30 percent was estimated to be uncollectible. General Fund Interest and Penalties Receivable 3,430 Allowance for Uncollectible Interest and Penalties 1,029 Revenues 2,401 Governmental Activities Interest and Penalties Receivable 3,430 Allowance for Uncollectible Interest and Penalties Revenues 1,029 2,401 7. Because of a change in state law, the city was notified that it will receive $80,000 less in intergovernmental revenues than was budgeted. 7 General Fund Budgetary Fund Balance Estimated Revenues Governmental Activities No Journal Entry Required 8. Delinquent taxes of $12,792 were deemed uncollectible and written off. The associated interest and penalties of $952 also were written off. 8 General Fund Allowance for Uncollectible Delinquent Taxes 12,792 Allowance for Uncollectible Interest and Penalties 952 Taxes ReceivableDelinquent interest and Penalties Receivable 12,792 952 Governmental Activities No Journal Entry Required 9. Total payroll during the year was $819,490. Of that amount, $62,690 was withheld for employees' FICA tax liability, $103,710 for employees' federal income tax liability, and $34,400 for state taxes, the balance was paid to employees in cash. 9 General Fund Expenditures 819,490 Due from Federal Government 166,400 Due to State Government 34,400 Cash 618,690 819,490 Governmental Activities Expenses Due to Federal Government Due to State Government Cash 166,400 34,400 618,690 10. The employer's FICA tax liability was recorded for $62,690. 10 General Fund Expenditures Due to Federal Government 62,690 62.690 Governmental Activities Expenses 62,690 Due to Federal Government 62,690 11. Cash collections from sales taxes totaled $825,000 and from revenue sources other than taxes were $110,000. In addition, sales taxes receivable due July 1 were accrued in the amount of $12.000. 11 General Fund Cash 935,000 Revenues 935,000 Governmental Activities No Journal Entry Required 12. Amounts due to the federal government as of June 30, 2023, and amounts due for FICA taxes and state and federal withholding taxes during the year were vouchered. 12 General Fund Due to Federal Government 258,580 Due to State Government 34,400 Vouchers Payable 292.980 Governmental Activities 13. Purchase orders and contracts encumbered in the amount of $1,988,040 were filled at a net cost of $1,887,570, which was vouchered. 13a General Fund Record the reversal of encumbrances entry of 2023. 13b Record the receipt of vouchers for the purchase orders and contracts encumbered for 2023. 13c Governmental Activities Record the receipt of vouchers for the purchase orders and contracts encumbered for 2023. 14. Vouchers payable totaling $2,101,660 were paid after deducting a credit for purchases discount of $8,030 (credit Expenditures). 14 General Fund Governmental Activities 15. The tax anticipation note of $500,000 was repaid. Interest totaled $10,000. 15 General Fund Governmental Activities 16. A transfer of $100,000 was made to establish a special revenue fund to account for expenditures related to a federal grant. 16 General Fund Governmental Activities 17. All unpaid current year's property taxes became delinquent. The balances of the current taxes receivable and related uncollectibles were transferred to delinquent accounts. The City uses the 60-day rule for all revenues and does not expect to collect any delinquent property taxes or interest and penalties in the first 60 days of the next fiscal year. 17a General Fund Record the reclassification of the unpaid property taxes of current year. 17b Record the reclassification of the related allowance for estimated uncollectible property taxes of current year. 17c Record the reclassification of the property tax revenue of current year. 17d Governmental Activities Record the reclassification of the unpaid property taxes of current year. 17e Record the reclassification of the related allowance for estimated uncollectible property taxes of current year. 171 Record the reclassification of the property tax revenue of current year. 18. A physical inventory of materials and supplies at June 30, 2023, showed a total of 89,100. Inventory is recorded using the purchases method in the General Fund; the consumption method is used at the government-wide level. (Note: A periodic inventory system is used both in the General Fund and at the government-wide level. When inventory was purchased during the year, Expenditures were debited in the General Fund journal and Inventory of Supplies was debited in the governmental activities journal.) General Fund 18 Governmental Activities Record in general journal form entries to close the budgetary and operating statement accounts in the General Fund only. (If no entry is required for a transaction/event, select "No Journal Entry Required in the first account field.) Transactions Fund General Journal Debit Credit 1. Record the closure of budgetary statements account. General Fund 1 2. Record the closure of operating statements account. 2 General Fund Prepare a General Fund balance sheet as of June 30, 2023. CITY OF CASTLETON General Fund Balance Sheet As of June 30, 2023 Assets Cash Sales Taxes Receivable Taxes ReceivableDelinquent Less: Allowance for Uncollectible TaxesDelinquent Interest and Penalties Receivable Less: Allowance for Uncollectible Interest and Penalties Inventory of Supplies Total Assets Liabilities and Fund Balances 0 S 0 Liabilities: 0 Vouchers Payable Deferred Inflows of ResourcesUnavailable Revenues Total Liabilities and Deferred Inflows of Resources Fund Balances NonspendableInventory of Supplies Unassigned Total Fund Balances Total Liabilities and Fund Balances S 0 CITY OF CASTLETON General Fund Statement of Revenues, Expenditures, and Changes in Fund Balance For the Year Ended June 30, 2023 Revenues Taxes Interest and Penalties on Taxes Other Sources Total Revenues 0 Expenditures Salaries and Wages Interest on Notes Payable Other Total Expenditures $ 0 Excess of Revenues over Expenditures Other Financing Uses Change In Fund Balance 0 Increase in Inventory of Supplies Fund Balances, July 1, 2022 Fund Balances, June 30, 2023 $ 0