Question
The 1/1/2017 beginning trial balance for the City of Fairways is below: Debits Credits Cash $60,000 Taxes Receivable- Delinquent 200,000 Allowance- delinquent taxes $50,000 Supplies
The 1/1/2017 beginning trial balance for the City of Fairways is below:
Debits
Credits
Cash
$60,000
Taxes Receivable- Delinquent
200,000
Allowance- delinquent taxes
$50,000
Supplies Inventory
25,000
Accounts Payable
55,000
Deferred Revenue
45,000
Due to Other Funds
10,000
Nonspendable Fund Balance
25,000
Fund Balance
100,000
TOTAL
$285,000
$285,000
The following transactions took place for the City of Fairways for the fiscal year ending 12/31/2017.
1.The following budget was approved for FY ending 12/31/17. Budget each item separately:
Estimated Tax Collections:$ 7,500,000
Estimated Grant: 500,000
Estimated Expenditures-Current: 4,700,000
Estimated Transfers to other funds:200,000
2.The 1/1/2017 amount in the "Deferred Revenues" account relates to property taxes levied in 2010, but expected to be collected between March and December of 2017.
3.Taxes of $6,300,000 were levied for the year.5% is considered uncollectible.The collections of current taxes during the year equal 90% of the levy. (2 Entries)
4.Notification of an operating grant award amounting to $425,000 is received. The grant is from the Department of Housing and Urban Development for removal of lead based paint in low income housing. It is a reimbursement grant.
5.$120,000 in delinquent taxes and $3,000 in related interest and penalties are collected. Interest and penalties were not previously accrued.
6.2017 Purchase orders # 102 - 243 are issued for current operating goods and services valued at $3,900,000.
7.a) 2017 Purchase orders #115 and #203 from above totaling $125,000 are still outstanding.The remainder of goods and services are received, along with invoices totaling $3,700,000 for routine operating items. b) 80% of the invoices are paid.
8.A public park land with a basis of $25,000 is sold for $100,000 to commercial developers.The city considers the transaction significant and infrequent.
9.Salaries (not previously encumbered) totaling $850,000 were paid during the year.
10. The following budget amendment occurred:
Estimated Expenditures-Current increased by: $45,000
Estimated Grant decreased by $75,000
11. $200,000 was transferred to the DSF for a serial bond payment.
12. The Motor Pool Internal Service Fund bills the GF $120,000 for vehicle usage. 75% of the invoice is remitted.
13. The GF loans the CPF $50,000 on a short-term basis.The amount will be repaid by the CPF when bonds are issued.
14. The city incurs and pays $375,000 for removing of lead based paint in low income housing projects. Collection of the reimbursement is expected in January of 2012.
15. Reclassify current taxes (and the related allowance) to delinquent. Adjust the Delinquent Allowance account to 40% of the gross delinquent tax receivable.
16. 20% of the gross Taxes Receivable: Delinquent are expected to be collected after March 1, 2012.
17. A physical count of the supplies inventory indicated a balance on hand of $15,000. Adjust appropriate accounts assuming that the consumption method is used.
18. Near year-end a restricted gift of $100,000 is received by the city to fund a food bank operated by the city's general fund. No funds have been disbursed as of year-end. This is a non-mandatory, non-exchange event.
Requirements (to be done in Excel except for requirement #2):
- Prepare the journal entries for the above events.
- Post journal entries to T-accounts.
- Prepare a preclosing trial balance.
- Prepare the following financial statements for 2017:
Budgetary Comparison Schedule
Balance Sheet with appropriate allocation of Fund Balance ( make sure you consider the effect of JE #18)
- Prepare closing journal entries.
Step by Step Solution
There are 3 Steps involved in it
Step: 1
Get Instant Access to Expert-Tailored Solutions
See step-by-step solutions with expert insights and AI powered tools for academic success
Step: 2
Step: 3
Ace Your Homework with AI
Get the answers you need in no time with our AI-driven, step-by-step assistance
Get Started