Journal Entries, Closing Entries, and Trial Balance
The general ledger trial balance of the General Fund of the City of Bedford on January 1, 2012, shows the following:
|
Dr |
Cr |
|
|
Cash |
$100,000 |
|
|
Taxes Receivable |
75,000 |
|
|
Allowance for Uncollectible Taxes |
$ 35,000 |
|
|
Unreserved Fund Balance |
110,000 |
|
|
Reserve for Encumbrances-2011 |
30,000 |
|
|
Total |
$175,000 |
$175,000 |
A summary of activities and transactions for the General Fund during 2012 is presented here:
- The City Council adopted a budget for the General Fund with estimated revenues of $1,560,000 and authorization for appropriated expenditures of $1,400,000. The budget authorized the transfer of $50,000 from the Water Fund to the General Fund for operating expenses as a payment in lieu of taxes. Cash for the payment of interest due for the year on the $1,000,000, 8% bond issue for the Civic Center is approved for transfer from the General Fund to the Debt Service Fund.
- The annual property tax levy of 10% on assessed valuation ($11,000,000) is billed to property owners. Two percent is estimated to be uncollectible.
- Goods and services amounting to $1,150,000 were ordered during the year.
- Invoices for all goods ordered in 2011 amounting to $29,000 were approved for payment.
- Funds for bond interest on Civic Center bonds were transferred to the Debt Service Fund.
- Invoices for goods and services received during the year totaling $1,155,000 were recorded. These were encumbered previously [see (3) above].
- Transfer of funds from the Water Company was received in lieu of taxes.
- Taxes were collected from property owners in the amount of $1,050,000.
- Past-due tax bills of $17,000 were charged off as uncollectible.
- Checks in payment of invoices for goods and services ordered in 2011 and 2012 were issued [see items (4) and (6) above].
- Revenues received from miscellaneous sources, other than property taxes, of $455,000 were recorded.
- Purchase order for two trash collection vehicle systems complete with residence trash containers for automatic pickup of trash was issued. Bid price per system was $120,000.
Required:
- Prepare journal entries to record the summary transactions. You may find it necessary or convenient to post journal entries to ledger t-accounts before the preparation of the required trial balances.
- Prepare a preclosing trial balance.
- Prepare closing entries.
- Prepare a postclosing trial balance.