Problem 5. A summary of the general fund transactions for the city of Wautoma for the year ended December 31, 2016, is as follows:

A. A budget was approved, showing estimated revenues of $900,000, appropriations $875,000, transfers in of $27,000 from other funds, and required transfers of $20,000 to other funds.

B. The outstanding encumbrance at the end of 2015 was $25,000. Amounts encumbered in the prior period are included in appropriations for 2016.

C. Property taxes for $650,000 were levied. In past years, 1% of the property taxes levied proved uncollectible.

D. Encumbrances for $25,000 had not been liquidated by the end of 2015 (see B). Invoices for all these items were received in 2016 and totaled $24,000.

E. Collections from property taxes totaled $644,000, of which $20,000 represented collections on delinquent taxes. Delinquent taxes of $8,000 remain uncollected, on which a $3,000 allowance is carried. Remaining taxes Receivable - current and taxes receivable - delinquent were converted into taxes receivable - delinquent and tax liens receivable, respectively.

F. Purchase orders totaling $750,000 were issued. Subsequently, invoices were received amounting to $685,000 for items estimated to cost $680,000. Included were supplies for $10,000.

G. An ending inventory of supplies amounted to $2,000, for which the fund balance should be reclassified (there was no beginning inventory balance.)

H. Wautoma received $300,000 as its part of federal revenue-sharing programs. Grants-in-aid of $60,000 due from the state government are recorded. None of the grants is expenditure driven.

I. Required transfers of $20,000 are made to other funds.

J. A $50,000 payment is made on a mortgage payable. The payment includes $21,000 of interest and a principal payment of $29,000.

K. Transfers received from other funds amount to $23,000.

Instructions

1. Prepare journal entries to record the general fund transactions.

2. Prepare closing entries for the general fund.