The city council of Watford approved the following budget for the General Fund for FY 2008.
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Revenues
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Property Taxes
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$50,000
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|
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License fees
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10,000
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|
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Fines and Penalties
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15,000
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|
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Parking meters
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5,000
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|
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Federal Grants
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20,000
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$100,000
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Appropriations
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|
|
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Salaries
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$50,000
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|
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Materials
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20,000
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Motorcycles
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24,000
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Interest
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1,000
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$95,000
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Budgeted Increase in Fund Balance
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$5,000
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The postclosing trial balance for the fund, as of December 31, 2007, was as follows:
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Debits
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Credits
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Cash
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$5,000
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|
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Due from federal government
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10,000
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|
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Vouchers payable
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$8,000
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Unreserved payable
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|
7,000
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$15,000
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$15,000
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Transactions for FY 2008 include the following:
a. FY 2008 property tax bills were mailed to the property owners: $50,000.
b. Ordered two new motorcycles at an estimated total cost of $24,000.
c. Received a check for $30,000 from the federal government to cover 2007 and 2008 federal grants. (Hint: Record the FY 2008 grant as Revenues.)
d. Borrowed $15,000 from the Canal Bank for 6 months in anticipation of tax receipts.
e. Ordered materials costing $20,000.
f. Paid vouchers outstanding at the end of 2007: $8,000.
g. License fees for 2008 were $9,500. Fines and penalties were $16,000.
h. The motorcycles arrived, along with an invoice for $23,400.
i. Parking meter revenues for 2008 were $6,500.
j. Repaid loan to bank, along with accrued, along with accrued interest of $900.
k. The materials arrived, accompanied by an invoice for $19,500.
l. Paid the outstanding voucher for $23,400 to the vendor who supplied the motorcycles.
m. Salaries for the year were $50,000.
n. Property taxes received during the year were $50,000.
Required:
1. Prepare journal entries to record the budget and these transactions
2. Prepare a closing balance
3. Prepare closing entries
4. Prepare a postclosing trial balance.
5. Prepare a balance sheet and a statement of revenues, expenditures, and changes in fund balance for FY 2008.