Concept introduction
The key part of a business is the government. The governmental funds are termed as the general funds. Accounting and financial reporting of the general funds becomes more important with increasing economy. There are two types of financial organizations in this category, governmental and not-for-profit entities. Budgeting helps to obtain optimal resource allocations to those entities and manage them efficiently.
To prepare: Entries in the general fund for the 2018 events.
Explanation of Solution
The journal entries for the events in 218 are as follows.
1 The record of money borrowed.
Date | Accounts Title and Description | Post Ref. | Debit ($) | Credit ($) |
January, 2018 | Cash (A+) | 275,000 | ||
Tax Anticipation Notes Payable (L+) | 275,000 |
Cash is an asset and will lead to increase in the asset value in the balance sheet. Therefore, it is debited. While the tax anticipation notes payable is a liability and will increase the liability value in the balance sheet. Therefore, it is credited.
2 The record of collection of taxes liens is as below.
Date | Accounts Title and Description | Post Ref. | Debit ($) | Credit ($) |
February, 2018 | Cash (A+) | 12,000 | ||
Tax Liens Receivable (A-) | 10,000 | |||
Revenues (SE+) | 2,000 |
Record of the sale property.
Find the balance tax liens receivable.
Date | Accounts Title and Description | Post Ref. | Debit ($) | Credit ($) |
February, 2018 | Allowance for the uncollectible Tax Liens | 23,000 | ||
Tax Liens Receivable | 17,000 | |||
Revenues | 6,000 |
3 The collection of delinquent property taxes. The
Date | Accounts Title and Description | Post Ref. | Debit ($) | Credit ($) |
April, 2018 | Cash (A+) | 104,500 | ||
Delinquent Property Tax Receivable (A-) | 100,000 | |||
Revenues (SE+) | 4,500 |
Record of the transfer of delinquent property taxes on tax liens.
Find the balance tax liens receivable.
The record on journal will be as below.
Date | Accounts Title and Description | Post Ref. | Debit ($) | Credit ($) |
April, 2018 | Allowances for Uncollectible Delinquent Taxes | 104,500 | ||
Delinquent Property Tax Receivable (A-) | 100,000 | |||
Revenues (SE+) | 4,500 |
4 Record of current property tax levy.
Calculate allowance for property taxes.
The entry journal will be as follows.
Date | Accounts Title and Description | Post Ref. | Debit ($) | Credit ($) |
July, 2018 | Property Taxes Receivable | 422,000 | ||
Allowance for Property Taxes Receivable | 21,100 | |||
Revenues (SE+) | 400,900 |
5 Record the collection of property taxes.
The journal entry will be as below.
Date | Accounts Title and Description | Post Ref. | Debit ($) | Credit ($) |
September, 2018 | Cash (A+) | 345,000 | ||
Property Taxes Receivable | 345,000 |
The entry of record of the pay-off tax anticipation notes will be as follows
Date | Accounts Title and Description | Post Ref. | Debit ($) | Credit ($) |
September, 2018 | Tax Anticipation Notes Payable | 275,000 | ||
Expenditures | 18,000 | 21,100 | ||
Cash (A-) | 293,000 |
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Chapter 15 Solutions
ADVANCED ACCOUNTING CHAPTERS 15-19
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