Reference no: EM13574630

The city council of Watford approved the following budget for the General Fund for FY 2008.

Revenues
Property Taxes	$50,000
License fees	10,000
Fines and Penalties	15,000
Parking meters	5,000
Federal Grants	20,000	$100,000

Appropriations
Salaries	$50,000
Materials	20,000
Motorcycles	24,000
Interest	1,000	$95,000
Budgeted Increase in Fund Balance		$5,000

The postclosing trial balance for the fund, as of December 31, 2007, was as follows:

	Debits	Credits
Cash	$5,000
Due from federal government	10,000
Vouchers payable		$8,000
Unreserved payable		7,000
	$15,000	$15,000

Transactions for FY 2008 include the following:

a. FY 2008 property tax bills were mailed to the property owners: $50,000.

b. Ordered two new motorcycles at an estimated total cost of $24,000.

c. Received a check for $30,000 from the federal government to cover 2007 and 2008 federal grants. (Hint: Record the FY 2008 grant as Revenues.)

d. Borrowed $15,000 from the Canal Bank for 6 months in anticipation of tax receipts.

e. Ordered materials costing $20,000.

f. Paid vouchers outstanding at the end of 2007: $8,000.

g. License fees for 2008 were $9,500. Fines and penalties were $16,000.

h. The motorcycles arrived, along with an invoice for $23,400.

i. Parking meter revenues for 2008 were $6,500.

j. Repaid loan to bank, along with accrued, along with accrued interest of $900.

k. The materials arrived, accompanied by an invoice for $19,500.

l. Paid the outstanding voucher for $23,400 to the vendor who supplied the motorcycles.

m. Salaries for the year were $50,000.

n. Property taxes received during the year were $50,000.

Required:

1. Prepare journal entries to record the budget and these transactions

2. Prepare a closing balance

3. Prepare closing entries

4. Prepare a postclosing trial balance.

5. Prepare a balance sheet and a statement of revenues, expenditures, and changes in fund balance for FY 2008.