4 10 Operating Transactions, Special Topics, and Financial Statements. The City of Ashland s General Fund had the following post-closing trial balance at April 30, 2010, the end of its fiscal year:
4–10 Operating Transactions, Special Topics, and Financial Statements. The City
of Ashland’s General Fund had the following post-closing trial balance at April
30, 2010, the end of its fiscal year:
Debits Credits
Cash $ 97,000
Taxes Receivable—Delinquent 583,000
Estimated Uncollectible Delinquent Taxes $189,000
Interest and Penalties Receivable 26,280
Estimated Uncollectible Interest and Penalties 11,160
Inventory of Supplies 16,100
Vouchers Payable 148,500
Due to Federal Government 59,490
Reserve for Inventory of Supplies 16,100
Fund Balance 298,130
$722,380 $722,380
During the year ended April 30, 2011, the following transactions, in summary
form, with subsidiary ledger detail omitted, occurred:
1. The budget for FY 2011 provided for General Fund estimated revenues
totaling $3,140,000 and appropriations totaling $3,100,000.
2. The city council authorized temporary borrowing of $300,000 in the form
of a 120-day tax anticipation note. The loan was obtained from a local bank
at a discount of 6 percent per annum (debit Expenditures for discount).
166 Part One State and Local Governments
3. The property tax levy for FY 2011 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 4 percent of the levy would be uncollectible.
4. Purchase orders and contracts were issued to vendors and others in the
amount of $2,059,000.
5. The County Board of Review discovered unassessed properties with a total
taxable value of $500,000. The owners of these properties were charged
with taxes at the city’s General Fund rate of $5 per $100 assessed value.
(You need not adjust the Estimated Uncollectible Current Taxes account.)
6. $1,961,000 of current taxes, $383,270 of delinquent taxes, and $20,570 of
interest and penalties were collected.
7. Additional interest and penalties on delinquent taxes were accrued in the
amount of $38,430, of which 30 percent was estimated to be uncollectible.
8. Because of a change in state law, the city was notified that it will receive
$80,000 less in intergovernmental revenues than was budgeted.
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.
10. The employer’s FICA tax liability was recorded for $62,690.
11. Revenues from sources other than taxes were collected in the amount of
$946,700.
12. Amounts due the federal government as of April 30, 2011, and amounts
due for FICA taxes, and state and federal withholding taxes during the year
were vouchered.
13. Purchase orders and contracts encumbered in the amount of $1,988,040
were filled at a net cost of $1,987,570, which was vouchered.
14. Vouchers payable totaling $2,301,660 were paid after deducting a credit
for purchases discount of $8,030 (credit Expenditures).
15. The tax anticipation note of $300,000 was repaid.
16. All unpaid current year’s property taxes became delinquent. The balances
of the current tax receivables and related uncollectibles were transferred to
delinquent accounts.
17. A physical inventory of materials and supplies at April 30, 2011, showed a
total of $19,100. Inventory is recorded using the purchases method in the
General Fund; the consumption method is used at the government-wide level.
Required
a. Record in general journal form the effect of the above transactions on the
General Fund and governmental activities for the year ended April 30, 2011.
Do not record subsidiary ledger debits and credits.
b. Record in general journal form entries to close the budgetary and operating
statement accounts.
c. Prepare a General Fund balance sheet as of April 30, 2011.
d. Prepare a statement of revenues, expenditures, and changes in fund balance
for the year ended April 30, 2011. Do not prepare the government-wide
financial statements.
