Calculation Based On Governmental And Not For Profit Entities

Calculation Based On Governmental And Not For Profit Entities

Q3. The city council of E. Staatsboro approved the following budget for the General Fund for fiscal year 2013:

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 post-closing trial balance for the fund, as of December 31, 2012, was as follows:

Debits

Credits

Cash

$ 15,000

$ 8,000

Vouchers payable

7,000

Fund balance (unassigned)

$15,000

$15,000

The following transactions and events occurred during FY 2013:

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. Received the supplies along with an invoice for $19,000; 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 the 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 a like 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 2014; also, received in early January 2014 a utilities invoice for $1,000 applicable to December 2013.

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 pre-closing trial balance.

c. Prepare a balance sheet; a statement of revenues, expenditures, and changes in fund balance.

d. Prepare closing journal entries.