Case Study
The General Fund of Middleville has presented you with the following trial balance as of June 30, 2011.
Debits Credits
Cash $ 40,000
Taxes Receivable- Delinquent 142,000
Estimated Uncollectible Taxes- Delinquent 9,100
Interest and Penalties Receivable 32,000
Vouchers Payable 24,000
Budgetary Fund Balance-Reserve for Encumbrances 10,200
Fund Balance 170,700
$ 214,000 $214,000
The information that is being presented to you pertains to the transactions for the city of Middleville for the fiscal year ended June 30, 2012.
1. The following budget was adopted by the city council:
Estimated Revenues:
Property Taxes $ 650,000
Fines and Penalties 44,000
Licenses and Permits 150,000
Federal Grant 85,000
929,000
Appropriations and Other Financing Uses
Public Safety 402,000
General Government 263,000
Public Works 102,000
Parks and Recreation 92,000
Transfers Out 34,000
893,000
2. Encumbrances outstanding at the end of the year were re-opened.
3. Property taxes of $ 660,000 were levied. It is estimated that 2.5% of the property taxes levied are expected to be uncollectible/
4. Purchase orders issued for the 2012 fiscal year were as follows:
Public Safety, $ 395,000; General Government, $ 259,000; Public Works, $ 100,000; Parks and Recreation, $ 98,000.
5. Cash collected for the Federal Grant from the Federal Government, $ 94,000.
6. Cash collected and transferred in as follows:
Fines and Penalties 43,000
Licenses and Permits 164,000
7. Cash collected on property taxes were as follows: Current taxes, $559,000, Delinquent Taxes, $ 41,000 and $ 22,000 of interest and penalties were collected.
8. Purchase orders issued in 2012 in the following amounts were filled in at the following amounts:
Estimated Actual
Public Safety $ 395,000 $ 393,600
General Government $ 259,000 $ 258,200
Public Works $ 100,000 $ 99,400
Parks and Recreation $ 98,000 $ 97,500
$ 852,000 $ 848,700
9. Vouchers paid amounted to $ 840,000 and the transfer out to the Debt Service Fund, $34,000.
10. Please reclassify the Taxes Receivable -Current and Estimated Uncollectible Taxes- Change from Current to Delinquent.
Instructions:
a. Prepare journal entries for the fiscal year ending 2012.
b. Prepare closing entries.
c. Prepare a General Fund Statement of Revenues, Expenditures, and Changes in Fund Balance for the year ended June 30, 2012.
d. Prepare a General Fund Balance Sheet as of June 30, 2012.