Reference no: EM132130271

Question - Prepare journal entries. The Town records encumbrances only for its Supplies appropriation.

1) Lancing adopted the following budget for the year:

Revenues:

• Property taxes $275,000
• Licenses and fees $35,000

Appropriations:

• Salaries $255,000
• Supplies $40,000
• Interest $1,500

2) Property tax bills amounting to $275,000 were sent to the property owners.

3) Because property taxes were not due to be received for several months and the town needed cash to finance it activities, Lancing borrowed $100,000 from a local bank using tax anticipation notes.

4) Lancing paid salaries in the amount of $75,000

5) The town sent out two purchase orders for supplies: purchase order A for $6,000 and purchase order B for $5,000

6) The town received $130,000 from property owners in payment of their property taxes.

7) Lancing repaid the bank on its borrowing in transaction c. The amount paid was $101,000 which included interest of $1,000

8) The town collected $15,000 for fishing licenses.

9) The town reforge supplies ordered on purchase order A in transaction (5) All the supplies arrived in good condition and the invoice for $6,100 was approved for payment.

10) The town Treasurer paid the invoice in transaction (9) for $6,100