The books for the Town of Fountain Inn are maintained by an inexperienced bookkeeper. All transactions were

Question:

The books for the Town of Fountain Inn are maintained by an inexperienced bookkeeper. All transactions were recorded in the town's general fund for the fiscal year ended June 30, 2014. The bookkeeper prepared the following trial balance:

Additional information:
1. The accounts receivable balance was due from the town's golf course, representing an advance made by the general fund. Accounts for the municipal golf course operated by the town are maintained in a separate enterprise fund.
2. The total tax levy for the year was $300,000,000. The town's tax collection experience in recent years indicates an average loss of 5 percent of the net tax levy for uncollectible taxes. At year-end, all taxes receivable are considered delinquent and are fully reserved.
3. On June 30, 2014, the town retired at face value 4-percent general obligation serial bonds totaling $35,000,000. The bonds were issued on July 1, 2012, in the total amount of $150,000,000. Interest paid during the year was also recorded in the Bonds Payable account.
4. At the beginning of the year, the town council authorized a supply room with an inventory not to exceed $10,000,000. During the year, supplies totaling $14,000,000 were purchased and charged to Expenditures. The physical inventory taken at June 30, 2014, disclosed that supplies totaling $10,500,000 were used. The town uses the purchases method to report supplies, and supplies are reported in the balance sheet.
5. Expenditures for 2014 included $2,600,000 applicable to purchase orders issued in the prior year. Outstanding purchase orders at June 30, 2014, not recorded in the accounts, amounted to $4,500,000. The GAAP budgetary basis is used.
6. The amount of $9,000,000, due from the state for the town's share of state gasoline taxes, was not recorded in the accounts.
7. Equipment costing $8,000,000 was removed from service and sold for $1,000,000 during the year, and new equipment costing $20,000,000 was purchased. These transactions were recorded in the Town Property account.
Required
a. Prepare the adjusting and closing entries for the general fund of Fountain Inn.
b. Prepare a statement of revenues, expenditures and changes in fund balances and balance sheet for Fountain Inn's general fund.

GAAP
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