Prepare Entries in General Journal Form to Record the Following

question 115

Essay

Prepare entries in general journal form to record the following transactions in General Fund general ledger accounts for fiscal year 2014.Use modified accrual accounting.
(a)The legal budget for the year provided for $5,000,000 of estimated revenues and $4,960,000 appropriations.
(b)Assume there are $ 210,000 of purchase orders outstanding at the end of last year and that these will be honored in the current year.Prepare the entries to re-establish the encumbrance.
(c)Property taxes were levied in the amount of $3,300,000.It is estimated that 2 percent of the taxes will never be collected.
(d)Purchase orders were issued for equipment and supplies in the amount of $4,000,000.
(e)Supplies,relating to all of the prior year purchase orders ($210,000),were received along with invoices amounting to $207,000.
(f)Collections of current property taxes amounted to $2,950,000.The uncollected taxes recorded as delinquent.
(g)It was estimated that $210,000 in property taxes would be collected in the first 60 days of 2015 and that $160,000 would be collected in later periods.

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Definitions:

Unearned Revenues

Income received by an individual or company for a service or product that has yet to be provided or delivered.

Current Assets

Assets that are expected to be converted into cash, sold, or consumed within one year or a business’s operating cycle, whichever is longer.

Balance Sheet

is a financial statement that provides a snapshot of a company's financial position at a specific point in time, detailing assets, liabilities, and shareholders' equity.

Unadjusted Trial Balance

A trial balance prepared at the end of an accounting period before adjusting entries are made.