E17-3. Listed are transactions of the Town of Jackson. 1. A budget consisting of

ID: 2424578 • Letter: E

Question

E17-3. Listed are transactions of the Town of Jackson.

1. A budget consisting of estimated revenues of $1,950,000 and appropriations for expenditures of $1,800,000 was passed by the town council.

2. Property taxes of $1,150,000 were assessed; $1,115,000 are expected to be collectible.

3. Property taxes in the amount of $1,080,000 were collected.

4. Equipment costing $200,000 was purchased, and the old equipment was sold at the end of its estimated useful life for $24,000.

5. A contract was signed with an independent company to do the trash collecting for the year. The contract price was $96,000.

6. The first monthly bill of $8,000 was received from the trash collector.

7. The $8,000 bill was paid.

Required:

Prepare the journal entries needed in the records of the General Fund to account for these transactions.

Entries for the transactions listed in Town of Jackson:

1) Appropriations a/c Dr $ 19,50,000

To Revenues a/c $ 19,50,000

Expenditures a/c Dr $ 18,00,000

To Appropriations a/c $ 18,00,000

2) Property tax receivable a/c Dr $ 11,50,000

To Estimated uncollectible taxes a/c $ 35,000

To Revenue a/c $ 11,15,000

Cash a/c Dr $ 10,80,000

To Property Tax receivable a/c $ 10,80,000

3) Equipment a/c Dr $ 2,00,000

To Cash a/c $ 2,00,000

4) Profit & Loss (Sale of Equipment) a/c Dr $ 24,000

To Equipment a/c $ 24,000

5) Encumbrance a/c Dr $ 96,000

To Reserve for Encumbrance a/c $ 96,000

6) Expenditure a/c Dr $ 8000

To Contract Payable a/c $ 8000

Reserve for Encumbrance a/c Dr $ 8000

To Encumbrance a/c $ 8000

Contract Payable a/c Dr $ 8000

To Cash a/c $ 8000

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