A general ledger trial balance at June 30,2011, for Millar City is as follows:
Debits Credits
Cash $12,000
Taxes receivable 30,000
Allowance for uncollectible taxes $ 2,000
Due from other funds 3,000
Supplies inventory, June 30, 2014 4,000
Estimated revenues 300,000
Expenditures 290,000
Expenditures - prior year 5,000
Encumbrances 6,000
Vouchers payable 13,000
Due to other funds 5,000
Reserve for encumbrances 6,000
Reserve for encumbrances - prior year 5,000
Fund balance - nonspendable 4,000
Fund balance - unassigned 10,000
Appropriations 300,000
Revenues 305,000
650,000 650,000
Millar City uses a purchases basis inaccounting for supplies. Open encumbraces are considered constrained by thehighest decision-making level of the city.
REQUIRED: Prepare a fund balance sheet asof June 30, 2011.
Step 1: Adjustment:
To adjust the supplies expenditure andvouchers payable accounts using purchase method
|
Expentitures
|
2,000
|
|
Voucher payable
|
2,000
|
Step 2: Closing entries
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Reserve for encumbrances - prior year
|
5,000
|
|
Expenditures - prior year
|
5,000
|