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The County of Maxnell decides to create a sanitation department and offer its services to the public for a fee. As a result, county officials plan to account for this activity within the enterprise funds. Prepare journal entries for this operation for the following 2017 transactions as well as necessary adjusting entries at the end of the year. Assume the information is being gathered to prepare fund financial statements. Only entries for the sanitation department are required here:January 1 Received unrestricted funds of $227,000 from the general fund as permanent financing.
Febrauary 1 Borrowed an additional $180,000 from a local bank at a 12 percent annual interest rate.
March 1 Ordered a truck at an expected cost of $115,000.
April 1 Received the truck and made full payment. The actual cost amounted to $117,000. The truck has a 10-year life and no salvage value. Straight-line depreciation is to be used.
May 1 Received a $27,700 cash grant from the state to help supplement the pay of the sanitation workers. The money must be used for that purpose.
June 1 Rented a garage for the truck at a cost of $2,200 per month and paid 12 months of rent in advance.
July 1 Charged citizens $19,000 for services. Of this amount, $15,400 has been collected.
August 1 Made a $13,000 cash payment on the 12 percent note of February 1. This payment covers both interest and principal.
September 1 Paid salaries of $25,500 using the grant received on May 1.
October 1 Paid truck maintenance costs of $2,000.
November 1 Paid additional salaries of $19,500, first using the rest of the grant money received May 1.
December 31 Sent invoices totaling $20,400 to customers for services over the past six months. Collected $5,200 cash immediately.
December 31 A new landfill was opened this year. It is 12 percent filled as of the end of the year. The estimated current cost for the eventual closure of this facility is $2.1 million although no payments will be made for approximately 9 years.a) Record the accrual of interest expense - Enterprise fund.
b) Record the expense for landfill closure and liability

Respuesta :

varshamittal029

In an organization's accounting system, a journal entry documents a commercial transaction. The foundation of the double-entry accounting method, which has been around for centuries, is made up of journal entries.

The required journal entries are:

January 1

                  Cash - Debit                                        $227,000

                              To General fund - Credit                               $227,000

                           (Being unrestricted funds received from general funds)

February 1

                   Cash - Debit                                        $180,000

                                To Notes payable  - Credit            $180,000

(Being additional funds borrowed from local bank at 12percent annual interest)

March 1

                   Purchase Expenditure un invoiced - Debit         $115,000

                              To Purchase Accrual - Credit                           $115,000

(Being order placed for purchasing truck is accrued (recorded) at estimated cost )

April 1

                   Product receipt - Debit                        $115,00

                              Purchase expenditure un invoiced - Credit     $115,000

        (Being entry of Truck received (product receipt) has been recorded)

                   Purchase Accrual - Debit               $115,000

                              To Product receipt - Credit           $115,000

         (Being reversal of purchase accrual entry recorded on march 1)

                   Truck - Debit                      $117,000

                              To cash - Credit                 $117,000

          (Being payment made to truck purchased)

May 1

                    Cash - Debit                                $27,700

                                To Contribution revenue - Credit           $27,700

               (Being grant received from State for the supplement help)

                     Enterprise fund - Debit           $27,700

                                To cash - Credit                   $27,700

                (Being cash transferred to enterprise fund)

June 1

                     Advance rent - Debit            $26,400

                                 To Cash - Credit                   $26,400

                 (Being garage rent paid in advance for 12 months)

July 1

                     Receivable - Debit                   $19,000

                                To Contribution revenue - Credit        $19,000

                    Cash - Debit                      $15,400

                                To Receivable - Credit              $15,400

(Being record of contribution revenue from citizens and amount collected recorded)

August 1

                     Interest expenses - Debit            $10,800

                           ($180,000*12%/6)

                     Notes Payable - Debit                    $2,200

                                     To  Cash - Credit                               $13,000

(Being cash paid towards interest on notes payable for 6 months and principal)

September 1

                      Salaries expenses - Debit             $25,500

                                        To Enterprise fund  - Credit         $25,500

                         (Being salaries paid from the grant received)

October 1

                      Repair and maintenance - Debit         $2,000

                                         To Cash - Credit                           $2,000

                     (Being cash paid towards truck repair & maintenance)

November 1

                       Salaries expenses - Debit             $19,500

                                          To Enterprise fund  - Credit         $2,200

                                          To Cash - Credit                     $17,300

(Being additional salary paid from rest available balance of grant fund and remaining in cash)

December 31

                        Receivable - Debit           $20,400

                                      To Contribution revenue - Credit           $20,400

                         Cash - Debit               $5,200

                                      To Receivable - Credit    $15,200

(Being record of contribution revenue from citizens and amount collected recorded)

December 31

                        Land fill expenses- Debit           $252,000

                                    ($2,100,000*12%)

                                        To Landfill expenses payable - Credit  $252,000

                   (Being landfill closure expenses accrued as of December 31)

Learn more about Journal Entry here: https://brainly.com/question/26412482

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