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[Para. 4a-16] The balances in the current taxes receivable and related estimated uncollectibles accounts were reclassified as delinquent. Interest and penalties of $56,580 were also recorded on the delinquent taxes, of which $10,500 was estimated to be uncollectible.

Required: Record this transaction and reclassification in the General Fund and governmental activities journals. Property tax revenues should be reduced and Deferred Inflows of Resources should be recorded in the General Fund, since these revenues are considered "unavailable" under the modified accrual basis of accounting used in governmental funds. Interest and penalties should be recorded as Deferred Inflows of Resources, rather than interest and penalties revenue, in the General Fund. At the government-wide level, the property taxes continue to be included in current year revenue, and interest and penalties are also recorded as current year revenue at the government-wide level.)

[Para. 4a-17] In view of unexpected revenue and expenditure developments the city council revised the budgets for the current year as shown below:

 

                                                                  Budget Adjustments

      Estimated Revenues:

       Property Tax                              $ 40,000 increase

       Sales Tax                                       25,000 decrease

       Interest and Penalties                    25,000 decrease

 

      Appropriations:

       Public Safety                            $ 10,000 decrease

       General Government                      5,000 increase

  Required: Record the budget amendments in the General Fund general journal only. Budgetary items do not affect the government-wide accounting records. (Note: Select "Budget Amendment" in the [Description] field in the Detail Journal.)