Problem 17-3 Computing Unreserved Fund Balance and Closing Entries LO6 The following account balances, among others, were included in the preclosing trial balance of the General Fund of the city of Madison on December 31, 2009. Appropriations $3,488,000 Cash 270,000 Due to Other Fund 100,000 Due from Other Funds 250,000 Encumbrances 382,000 Estimated Revenue 3,720,000 Expenditures 3,020,000 Expenditures---2008 296,000 Reserve for Encumbrance 382,000 Reserve for Encumbrances---2008 310,000 Revenue 3,656,000 Taxes Receivable 600,000 Transfers from Other Funds 300,000 Transfers to Other Funds 520,000 Unreserved Fund Balance 422,000 Vouchers Payable 400,000 a. Prepare the necessary closing entries on December 31, 2009. b. Calculate the amount of both the unreserved fund balance and the total fund balance in the balance sheet (1) on December 31, 2008 and (2) on December 31, 2009.c c. Prepare a schedule reconciling the December 31, 2008, total fund balance with the December 31, 2009, total fund balance by reference to actual inflows and outflow of financial resources

|Part A |Closing Entries |
|1. |Unreserved Fund Balance | 64,000 | |
| |Revenue |3,656,000 | |
| |Estimated Revenue | |3,720,000 |
|2. |Reserve for Encumbrances - 2008 | 310,000 | |
| |Expenditures - 2008 | |296,000 |
| |Unreserved Fund Balance | |14,000 |
|3. |Appropriations |3,488,000 | |
| |Expenditures | |3,020,000 |
| |Encumbrances | |382,000 |
| |Unreserved Fund Balance | |86,000 |
|4. |Transfers from Other Funds |300,000 | |
| |Unreserved Fund Balance |220,000 | |
| |Transfers to Other Funds | |520,000 |
|Part B |Budget entry on January 1, 2009 |
|Estimated Revenues |3,720,000 | |
|Appropriations | |3,488,000 |
|Unreserved Fund Balance | |232,000 |
| |Unreserved fund balance per 12/31/2009 preclosing trial balance |$ 422,000 |
| |Less credit to unreserved fund balance on 1/1/2009 from budget entry |232,000 |
| |Unreserved fund balance on 12/31/2008 |190,000 |
| |Reserve for encumbrances 12/31/2008 |310,000 |
| |Total fund balance per balance sheet 12/31/2008 |$ 500,000 |
| | | |
| |Unreserved fund balance per 12/31/2009 pre-closing trial balance |$422,000 |
| |Closing entries ($14,000 + $86,000 - $64,000 - $220,000) |(184,000) |
| |Unreserved fund balance 12/31/2009 |238,000 |
| |Reserve for encumbrances 12/31/2009 |382,000 |
| |Total fund balance per balance sheet 12/31/2009 |$ 620,000 |
| | | |
|Part C |Total fund balance 12/31/2008 | |$ 500,000 |
| |Add inflows of financial resources |$3,656,000 | |
| |Revenues |300,000 |3,956,000 |
| |Transfers from other funds | | |
| | | | |
| |Deduct outflows of financial resources | | |
| |Expenditures made this year against prior year’s appropriation authority |$296,000 | |
| |Expenditures made this year against current year’s appropriation authority | | |
| |Transfers to other funds |3,020,000 | |
| |Total fund balance 12/31/2009 | | |
| | |520,000 |(3,836,000) |
| | | |$ 620,000 |