Question

1. The City of Logan had the following transactions for their General Fund in the first month of their fiscal 2019 year, which ends December 31, 2019. Prepare the journal entries required for the transactions of the General Fund

1. The budget was approved, with $1,000,000 expected from property taxes, and another $5,000,000 expected from sales taxes. The budget showed these funds were expected to be spent on Salaries and Wages, $2,500,000; Utilities, $1,800,000; Rent, $900,000; and Supplies, $500,000.

2. Supplies were ordered in the amount of $40,000.

     

3. The electric bill was paid upon receipt in the amount of $75,000.

4. Property taxes were billed in the amount of $1,100,000, due on December 31.

5. Supplies were received, but the invoice(same amount) will be paid in 30 days. Supplies are used quickly and are not inventoried.

6. Property tax were received amounting to $900,000.

7. Borrowed $35,000 for a six-month term.

8. Used the funds borrowed to purchase a new fire truck. The truck is expected to have a 15-year useful life, and a $3,000 residual value.

Answer 1

Receivables a/c dr 1,100,000

To revenue from property tax a/c 1,100,000

Bank a/c. Dr 900,000

To receivables a/c 900,000

Receivables a/c. Dr 5,000,000

To revenue from sales tax a/c 5,000,000

Bank a/c. Dr 5,000,000

To receivables a/c 5,000,000

Salary and wages a/c dr 2,500,000

Utilities a/c. Dr 1,800,000

Rent a/c dr. 900,000

To expenses payable a/c 5,200,000

Expenses payable a/c dr 5,200,000

To bank a/c 5,200,000

Supplies a/c dr 500,000

To payables a/c 500,000

Electricity bill a/c dr 75,000

To bank a/c. 75,000

Bank a/c dr. 35,000

To borrowings a/c 35,000

Fire truck a/c dr 35,000

To bank a/c 35,000

Depreciation a/c dr 2.13

To fire truck a/c 2.13