Advanced Accounting
12th Edition
ISBN: 9781305084858
Author: Paul M. Fischer, William J. Tayler, Rita H. Cheng
Publisher: Cengage Learning
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Chapter 16, Problem 16.15P
To determine
General Fund:
General fund are those funds in which account holding the revenue and expense balances that are used in the business and agencies that are open to the public. General funds are the chief operating fund for the entire government.
: Preparation of
Expert Solution & Answer
Answer to Problem 16.15P
Following are the Cash Distribution:
- TC General Fund = $875,520
- RC General Fund = $423,360
- NT General Fund = $141,120
Explanation of Solution
Accounts | TC Tax Agency Fund | |
Debit ($) | Credit ($) | |
Cash Account Debit | 1,440,000 | |
To Taxes Receivable for other funds | 1,440,000 | |
(Being to record tax collection) |
- Cash account increases the value of asset. Therefore, it is debited.
- Tax receivables for other funds decreases the value of asset. Therefore, it is credited.
Accounts | TC Tax Agency Fund | |
Debit ($) | Credit ($) | |
Due to Other Government Units Account Debit | 1,440,000 | |
To Cash Account | 1,440,000 | |
(Being to record the cash distribution) |
- Due to Other Government Units decreases the value of the liability. Therefore, it is debited.
- Cash account decreases the value of assets. Therefore, it is credited.
Notes for calculating the cash distribution:
|
Accounts | TC General Fund | RC General Fund | NT General Fund | |||
Debit ($) | Credit ($) | Debit ($) | Credit ($) | Debit ($) | Credit ($) | |
Expenditure | - | - | 8,640 | - | 2,880 | - |
Cash | 875,520 | - | 423,360 | - | 141,120 | - |
Tax Receivable - Current | - | 864,000 | - | 432,000 | - | 144,000 |
Revenue | - | 11,520 | - | - | - | - |
(Being to record cash received by general fund) |
- Expenditure decreases the value of liability. Therefore, it is debited.
- Cash account increases the value of assets. Therefore, it is debited.
- Tax Receivable decreases the value of assets. Therefore, it is credited.
- Revenue decreases the value of assets. Therefore, it is credited.
Journalizing in the required format:
Accounts | TC Tax Agency Fund | TC General Fund | RC General Fund | NT General Fund | ||||
Debit ($) | Credit ($) | Debit ($) | Credit ($) | Debit ($) | Credit ($) | Debit ($) | Credit ($) | |
Tax Receivable - Current Account Debit | 3,600,000 | 1,800,000 | 6,00,000 | |||||
To Allowance for uncollectible taxes | 1,00,000 | 60,000 | 40,000 | |||||
To Revenue | 3,500,000 | 1,740,000 | 5,60,000 | |||||
(Being to record tax levy) | ||||||||
Revenue Account Debit | 10,000 | |||||||
To Tax receivables - Current | 10,000 | |||||||
(Being to correct tax levy error) | ||||||||
Taxes Receivable for other funds Account Debit | 5,990,000 | |||||||
To Due to Other Government Units Account | 5,990,000 | |||||||
(Being to record taxes to be collected) | ||||||||
Cash Account Debit | 1,440,000 | |||||||
To Taxes Receivable for other funds | 1,440,000 | |||||||
(Being to record tax collection) | ||||||||
Due to Other Government Units Account Debit | 1,440,000 | |||||||
To Cash Account | 1,440,000 | |||||||
(Being to record the cash distribution) | ||||||||
Expenditure | - | - | 8,640 | - | 2,880 | - | ||
Cash | 875,520 | - | 423,360 | - | 141,120 | - | ||
Tax Receivable - Current | - | 864,000 | - | 432,000 | - | 144,000 | ||
Revenue | - | 11,520 | - | - | - | - | ||
(Being to record cash received by general fund) |
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