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PROBLEM 18-8 General fund journal and related fund adjustments You have been engaged t examine the financial statement of the town of Bridgeport for the year ended June 30, 2008. Your examination disclosed that, because of the inexperience of the town’s bookkeeper all transaction was recorded in the general fund. The following general fund trial balance as of June 30, 2008, was furnished to you. General Fund Trial Balance Town Of Bridgeport June 30. 2008 Debit Credit Cash $ 16,800 Short-term investments 40,000 Accounts receivable 11,500 Taxes receivable-current year 30,000 Tax anticipation notes payable $ 50,000 Appropriations 400,000 Expenditures 382,000 Estimated revenue 320,000 Revenues 360,000 General property 85,400 Bond payable 52,000 Fund balance 127,700 $937,700 $937,700 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 uncollectable 3. On June 30, 2008 the town retired at par value, 6% general obligation serial bonds totaling $40,000. The bonds were issued on July 1, 2003 at a face value of $200,000. Interest paid during the year ended June 30, 2008, was charged t bond payable 4. Expenditures for the year ended June 30, 2008, included $11,200 applicable to purchase orders issued t the prior year. Outstanding purchase order at June 30, 2008, not recorded in the account amounted to $17,500 5. On June 28, 2008, the state revenue department informed the town that its share of a state-collected, locally shared tax would be value of 34,000 6. During the year equipment with a book $7,900 was removed from service and sold for $4,600. In addition, new equipment costing $90,000 was purchase. The transactions were recorded in general property 7. During the year 100 acre of land were donated to town for use as an industrial park. The land had a value of $400,000. This donation has not been recorded a. Prepare a formal reclassification, adjusting, and closing journal entries for the general funds as of June 30,2008 b. Prepare the formal adjusting entries for any other fund as of June 30,2008
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