For the Following Situations, Make Adjusting Entries Necessary to Prepare

For the following situations, make adjusting entries necessary to prepare government-wide financial statements. Where appropriate, take account of the amounts reported in the fund-level financial statements.
a. A city instituted a new sales tax starting January 1, 2019. It collected $600,000 of sales taxes during 2019. When the city prepared its fund-level statements, it accrued an additional $200,000 for sales taxes remitted by larger businesses in January 2020, for taxes collected in the fourth quarter of 2019. However, smaller businesses are not required to remit fourth quarter collections until April 2020. No accrual was made for those taxes, which were estimated to be $28,000.
b. See facts in situation a. For the calendar year 2020, the city reported sales taxes of $800,000 in its fund-level financial statements. This amount includes all taxes collected in 2020 (applicable to 2020 and 2019), as well as the accrual for larger merchant remittances in January 2021. The accrual does not include estimated remittances of $35,000 from smaller merchants in April 2021.