Question

) The legal budget for the year provided for $5,200,000 of estimated revenues and $4,690,000 appropriations. b) Assume there are $200,000 of purchase orders outstanding at the end of last year and that these will be honored in the current year. Prepare the entry to re-establish the encumbrances. c) Property taxes were levied in the amount of $3,300,000. It is estimated that 1% 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 ($200,000), were received on account along with invoices amounting to $198,000. f) Collections of current property taxes amounted to $2,590,000. g) Invoices for most of the purchases of equipment and supplies from (d) above were received in the amount of $3,800,000. The related encumbrances amounted to $3,750,000. h) Of the property taxes recorded in transaction c) above, it was estimated that $210,000 in property taxes would be collected in the first 60 days of the next fiscal year, and that $180,000 would be received after that. Record the entry to defer the appropriate amount of revenues. i) Prepare closing entries for the year ended December 31, 2019.

Answer 1

No.	Account titles and explanation	Debit	Credit
a.	Estimated Revenues Control	5200000
	Appropriations Control		4690000
	Budgetary Fund Balance		510000
b.	Encumbrances Control	200000
	Fund Balance		200000
c.	Taxes Receivable-Current	3300000
	Estimated Uncollectible Current Taxes		33000
	Revenues Control		3267000
d.	Encumbrances Control	4000000
	Budgetary Fund Balance – Reserve for Encumbrances		4000000
e.	Budgetary Fund Balance - Reserve for Encumbrances	200000
	Encumbrances Control		200000
	Expenditures Control	198000
	Accounts Payable		198000
f.	Cash	2590000
	Taxes Receivable-Current		2590000
	Taxes Receivable-Delinquent (3300000-2590000)	710000
	Estimated Uncollectible Current Taxes	33000
	Taxes Receivable-Current		710000
	Estimated Uncollectible Delinquent Taxes		33000
g.	Budgetary Fund Balance - Reserve for Encumbrances	3800000
	Encumbrances Control		3800000
	Expenditures Control	3750000
	Accounts Payable		3750000
h.	Revenues Control	180000
	Deferred revenues		180000