The Village had the following for its fiscal year July 1, 2016, through June 30,
ID: 2538787 • Letter: T
Question
The Village had the following for its fiscal year July 1, 2016, through June 30, 2017 1. On July 1, 2016, The Village adopted a budget for general operations. Revenues were estimated at $775,000 and other financing sources were estimated at $50,000; legal authorizations for budgeted expenditures were as follows: Transfers to other funds $25,000; salaries $215,000, utilities $150,000, equipment $125,000, repair $125,000, public relations $55,000, and supplies $25,000. On December 15, 2017, the road repair appropriation was increased to $150,000. 2. On July 1, 2016, The Village assessed property taxes for the current period in the amount of $700,000, and, based on past history, 2.5% of this will prove to be uncollectible, while most will be collected within the current period, it is estimated that $50,000 will be collected in the next fiscal year by August 31, 2017, and an additional $25,000 will be collected after that. 3. On July 1, 2016, a wealthy resident of The Village donated marketable securities valued at $250,000 under the terms of a trust agreement. The terms stipulate that the principal amount is to be kept intact, interest generated by the securities is to be used to award college scholarships for needy students residing within The Village. Interest earned through June 30, 2017, was 6%, and one scholarship for SS00 was awarded. 4. On September 1, 2016, The Village Council transferred $12,500 to establish an internal Service Fund (Printing) to provide printing/copying services for all components of The Village government 5. On January 1, 2017, the Printing Fund purchased paper and toner cartridges at a cost of $1,957; at year end there was $552 worth of paper and toner remaining. The Fund also purchased a photocopier for $2,514 on January 1. It has a useful life of three years and no salvage value. On May 15, 2017, the State awarded a grant of $50,000 to The village: it will reimburse monies spent on upgrading the children's wing of the public library (the grant is through May 14, 2018). At the time of the award, the state advanced $15,000. By June 30, 2017, The Village had spent $22,000 on books and other materials, and applied for reimbursement 6. 7. The Village constructed a lighting system in an older neighborhood, the cost of which will be assessed to the residents benefitting from the system. The Village issued a note on July 1, 2016, with par value of $88,000 and an interest rate of 6.25% to fund construction (ignore capitalization of interest), with another $12,500 to be transferred from the General Fund. The residents are billed for $93,500 on July 1; receipts are collected and used to pay the debt and related interest on June 30, 2017, when construction is complete 8. A sanitation truck was ordered July 1, 2016, at an estimated cost of $110,000. It was delivered January 1, 2017, with a final invoice price of $108,829, zero salvage value, and a useful life of 7 years. REQUIRED: Prepare journal entries to record the above (include all simplicity, assume use of cash for payments) in statements. the same, you may write "same entry" for the second set of financials; if there is no entry, write "no necessary related entries EXCEPT closing and, for both the Fund-based and Government-wide financial For Fund-based, designate the Fund; for Government-wide, designate the activity. If the entry is entry."Explanation / Answer
(1) JULY 1 -2016 - NO ENTERY IN BOOKS REQUIRE FOR BUDGET ESTIMATES.
(2) PROPERTY TAX RECEIVABLE ACCOUNT DR 682500
TO PROPERTY TAX RECIVED (INCOME) A/C 682500
( 700000 LESS 2.5 % )
(3) AT THE TIME OF COLLECTION :
CASH /BANK ACCOUNT DR 607500
TO PROPERTY TAX RECEIVABLE ACCOUNT 607500
(682500 MINUS 50000 MINUS 25000 RECEIVED)
(4) N0 ENTERY REQUIRE FOR SECURITIES , HOWEVER ENTRY FOR INCOME AND SCHOLARSHIP IS
CASH ACCOUNT DR 15000
TO INTESREST RECEIVED A/C 15000
(250000 * 6%)
SCHOLARSHIP ACCOUNT DR 7500
TO CASH 7500
(SCHOLARSHIP PAID)
(5 ) INTERNAL SERVICE FUND ACCOUNT DR 12500
TO CASH ACCOUNT 12500
( F UND MAE FOR PRINTING)
(6) Printing Expenses a/c Dr. 1957
To Interna service fund 1957
Stock entry
Printing stock acount Dr. 552
to Printing expenses 552
Photocopier (assets) a/c Dr 2514.
To internal service fund 2514
Depreciation account Dr. 838
to Photocopier a/c 838
(2514 divided by three year - Dep for first year)
(6) Cash account dr 15000
Grant receivable a/c 35000
To grant received 50000
Books account Dr. 22000
To cash 22000
No entry require for grant application , entry for 7000 (22000-15000) will be made when recd.
(7) Cash account dr 88000
to note account 88000
Lighting system account dr . 100500
To cash 88000
To general fund 12500
Cash account Dr. 93500
To Light income account 93500
Interest account Dr. 5750
Note account Dr 88000
To cash 93750
(interest 6.50 % on 88000)
8 Truck account dr 108829
To cash 108829
Depreciation account Dr. 7773.50
To Truck account 7773.50
( being depreciation for six month - 108829/7/2)
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