General Fund Journal Entries and Related Fund Adjustments You have been engaged to examine the financial statements of the Town of Bridgeport for the year ended June 30, 2012. Your examination disclosed that, because of the inexperience of the town's bookkeeper, all transactions were recorded in the General Fund. The following General Fund trial balance as of June 30, 2012, was furnished to you.

Your audit disclosed the following additional information:
1. The accounts receivable of $11,500 includes $1,500 due from the town’s water utility for the sale of scrap sold on its behalf. Accounts for the municipal water utility are maintained in a separate fund.
2. The balance in Taxes Receivable—Current Year is now considered delinquent, and the town estimates that $24,000 will be uncollectible.
3. On June 30, 2012, the town retired, at par value, 6% general obligation serial bonds totaling $40,000. The bonds were issued on July 1, 2007, at a face value of $200,000. Interest paid during the year ended June 30, 2012, was charged to Bonds Payable.
4. Expenditures for the year ended June 30, 2012, included $11,200 applicable to purchase orders issued to the prior year. Outstanding purchase orders at June 30, 2012, not recorded in the accounts amounted to $17,500.
5. On June 28, 2012, the State Revenue Department informed the town that its share of a state-collected, locally shared tax would be $34,000.
6. During the year, equipment with a book value of $7,900 was removed from service and sold for $4,600. In addition, new equipment costing $90,000 was purchased. The transactions were recorded in General Property.
7. During the year, 100 acres of land were donated to the town for use as an industrial park.
The land had a value of $400,000. This donation has not been recorded.

Required:
A. Prepare the formal reclassification, adjusting, and closing journal entries for the General Fund as of June 30, 2012.
B. Prepare the formal adjusting journal entries for any other fund as of June 30,2012.

Transcribed Image Text:

General Fund Trial Balance Town of Bridgeport June 30, 2012 Debit Credit 16,800 40,000 11,500 30,000 Cash Short-term Investments Accounts Receivable Taxes Receivable current year Tax Anticipation Notes Payable Appropriations Expenditures Estimated Revenue Revenues General Property Bonds Payable Fund Balance 50,000 400,000 382,000 320,000 360,000 85,400 52,000 127,700 $937.700 937.700