The Following Account Balances, Among Others, Were Included in the Preclosing

question 12

Essay

The following account balances, among others, were included in the preclosing trial balance of the General Fund of the City of Baxter on December 31, 2017. Required:
a. Prepare the necessary closing entries on December 31, 2017.
b. Calculate the amount of both the unreserved fund balance and the total fund balance in the balance sheet (1) on December 31, 2016, and (2) on December 31, 2017.

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Definitions:

Sale and Leaseback

A financial transaction where the owner sells an asset and immediately leases it back from the buyer, often used in real estate.

Financial Lease

A type of lease where the lessee has use of the asset for most of its useful life, and the lease payments are designed to cover the full cost of the asset, often with an option to purchase the asset at the end of the lease term.

Lessor

The party who rents or leases property to another; the owner of the property being rented or leased.

After-Tax Cost of Debt

The net cost to a company for borrowing funds after adjusting for the tax deductibility of interest payments.