Chapter 4 Case Study (1)
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Jun 10, 2024
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Chapter 4 Case Study
Required:
Book journal entries for the following transactions in both the General Fund ledger and Government-Wide/Governmental Activities ledger.
1. The budget FY 2024 for the Town of Susanville authorizes expenditures of $3,700,000 allocated to the following: General Government $600,000, Public Safety $1,340,000, Public Works $1,200,000, Health and Welfare $430,000, Culture and Recreation $100,000 and Miscellaneous $30,000. Forecasted revenues of $3,980,000 were authorized and allocated to the following functions/programs: Property Taxes $2,520,000, Interest and Penalties on Delinquent Taxes $20,000, Sales taxes $550,000, Licenses and Permits $305,000, Fines and Forfeits $260,000, Intergovernmental Revenue, $170,000, Charges for Services $130,000 and Miscellaneous Revenues $25,000 for FY 2024. The entry to record the budget is:
General Fund: Estimated Revenues 3,980,000
Budgetary FB
208,000
Appropriations
3,700,000
Governmental Activities:
N/A
2. The Town of Susanville placed purchase orders for supplies totaling $65,150 for the following programs: General Government $26,000, Public Works $19,500, Health and Welfare $12,000, Culture & Recreation $7,650. The entry to record this transaction would be:
General Fund: Encumbrances – 2024
65,150
Encumbrances outstanding - 2024 65,150
Governmental Activities: N/A
3. Assume that only a portion of the supplies was filled and completed during the year at an actual cost of $32,500, for which the estimated cost had been $33,750. The breakdown of the estimated costs is as follows for
the portion of the goods that came in is as follows: General Government $21,000, Public Works $9,500, Health
and Welfare $1,000 and Culture and Recreation $2,250. The allocation to function/program for actual costs is as follows: General Government $20,800, Public Works $9,200, Health and Welfare $700, and Culture and Recreation $1,800. The Town of Susanville received the invoice for the goods but has yet to pay for them. General Fund: Encumbrances outstanding – 2024
33,750
Vouchers Payable
33,750
Expenditures – 2024
32,500
Vouchers payable 32,500
Governmental Activities: Expenses – General Gov.
20,800
Expenses – Public works
9,200
Expenses – Health & Well
400
Expenses – Culture & Rec
1,800
Vouchers payable
32,500
4. In addition to supplies, the police department authorized the purchase of a new copier. It was ordered with an estimated cost of $30,000.
General Fund: Encumbrances – 2024
30,000
Encumbrances Outstanding – 2024
30,000
Governmental Activities: N/A
5. The copier was received at an actual cost of $29,750 and the government has yet to pay the invoice. The copier qualifies as a long-lived asset according to the government’s capitalization policy. General Fund: Encumbrances outstanding – 2024
30,000
Encumbrances – 2024
30,000
Expenditures – 2024
29,750
Vouchers Payable 29,750
Governmental Activities: Equipment 29,750
Vouchers Payable 29,750
6. Bills were paid in the amount of $62,250 to pay the outstanding liability account Vouchers Payable.
General Fund: Expenditures – 2024
62,250
Vouchers payable
62,250
Governmental Activities: 7. For FY 2024, the City of Susanville sends out property tax invoices based on required tax revenue of $2,600,000, and it is estimated that 4% will be uncollectible. General Fund: Tax receivable – current 2,600,000
Allowance for tax Rec – current
104,000
Revenues
2,496,000
Governmental Activities: Tax receivable – current 2,600,000
Allowance for tax Rec – current
104,000
Revenues
2,496,000
8. The City of Susanville collected $2,042,033 of current property taxes.
General Fund: Cash 2,042,033
Tax Receivable – Current 2,042,033
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Governmental Activities: Cash 2,042,033
Tax Receivable – Current 2,042,033
9. The city’s accountant reclassifies uncollected current taxes to a delinquent status at year-end. General Fund: Delinquent Taxes Receivable ?
Current tax receivables ?
Governmental Activities: Delinquent Taxes Receivable ?
Current tax receivables ?
10. Historically, the Town of Susanville does not collect a significant amount of delinquent taxes early in the following year and does not expect to collect delinquent property taxes within 60 days of year-end. The city’s accountant reclassified the outstanding property tax revenue as a deferred inflow of resources. General Fund: Don’t know how to
Governmental Activities: Don’t know how to
11. The city’s accountant accrued interest and penalties of $12,200, of which they expect to collect $9,750 of that amount. General Fund: Interest and Penalty 12,200
Allowances for interest and penalty
2,450
Revenues
9,750
Governmental Activities: Interest and Penalty 12,200
Allowances for interest and penalty
2,450
Revenues
9,750
12. The City of Susanville collected property taxes from delinquent taxpayers in the amount of $106,520, of which $10,400 was accrued for interest and penalties
General Fund: Cash
116,920
Delinquent Taxes Receivable
106,520
Revenues
10,400
Governmental Activities: Cash
116,920
Delinquent Taxes Receivable
106,520
Revenues
10,400
13. The treasurer of the City of Susanville received approval to write off delinquent taxes totaling $18,600 and related interest and penalties of $2,500.
General Fund: Property tax receivable
18,600
Accrued interest and penalties
2,500
Allowance for uncollectable taxes
20,200
Governmental Activities: Property tax receivable
18,600
Accrued interest and penalties
2,500
Allowance for uncollectable taxes
20,200
14. The City of Susanville collected revenues from the following sources in 2024: Sales Tax $545,800, Fines and Forfeits assessed by Public Safety $255,000, fines and forfeits assessed by Public Works $250,000, Licenses and Permits assessed by the General Government $100,000, Charges for Services received by Culture and Recreation $107,000 and Miscellaneous revenue of $10,200.
General Fund: Cash
1,268,000
Revenue
1,268,000
Governmental Activities: Sales Tax
545,800
Fines Public safety
255,000
Fines Public works
250,000
Licenses and permits assessed by general Gov.
100,000
Charges for service received by culture & rec
107,000
Miscellaneous revenue 10,200
Revenue 1,268,000
15. The City of Susanville recorded expenditures of $3,616,000 relating to the operations of the government and
allocated to the following functions and programs in 2024: General Government $579,000, Public Safety $1,310,000, Public Works $1,190,000, Health and Welfare $429,000, Culture and Recreation $98,000 and Miscellaneous $10,000. General Fund: Expenditures -2024
3,616,000
Vouchers Payable
3,616,000
Governmental Activities: General Government 579,000
Public Safety
1,310,000
Public Works
1,190,000
Health and Welfare
429,000
Culture and Recreation
98,000
Miscellaneous
10,000
Vouchers Payable
3,616,000
16. At year-end, all temporary accounts, both budgetary and opening were closed to the appropriate fund balance. (General Fund only)
General Fund:
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17. Upon inspection, the accountant determined that there are two constrained revenues unspent at the end of fiscal 2024: $22,900 of sales taxes committed for constructing a hiking trail (in the Culture and Recreation program), and $33,500 of General Fund resources that the town manager has assigned for acquisition and installation of downtown security cameras. (
General Fund only)
General Fund:
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[The following information applies to the questions displayed below.]
The Village of Seaside Pines prepared the following enterprise fund Trial Balance as of December 31, 2020, the last day of
its fiscal year. The enterprise fund was established this year through a transfer from the General Fund.
Accounts payable
Accounts receivable
Accrued interest payable
Accumulated depreciation
Administrative and selling expenses
Allowance for uncollectible accounts
Capital assets
Cash
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Cost of sales and services
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Due from General Fund
Debits
$
Credits
96,000
$
32,000
28,000
45,000
47,000
12,000
712,000
89,000
550,000
479,000
45,000
17,000
Interest expense
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18,000
4,000
119,000
625,000
$1,479,000 $1,479,000
Prepare the reconciliation of operating income to net cash provided by operating activities that would appear at the bottom of…
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3
The Village of Seaside Pines prepared the following enterprise fund Trial Balance as of December 31, 2024, the last day of its fiscal year. The enterprise fund was established this year through a transfer from the General Fund.
Debits
Credits
Accounts payable
$ 108,000
Accounts receivable
$ 27,400
Accrued interest payable
30,600
Accumulated depreciation
49,000
Administrative and selling expenses
51,000
Allowance for uncollectible accounts
13,000
Capital assets
714,000
Cash
96,800
Charges for sales and services
561,000
Cost of sales and services
500,000
Depreciation expense
49,000
Due from General Fund
17,300
Interest expense
40,500
Interest revenue
5,300
Transfer in from General Fund
117,600
Bank note payable
630,400
Supplies inventory
18,900
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$ 1,514,900
$ 1,514,900
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The Village of Seaside Pines prepared the following enterprise fund Trial Balance as of December 31, 2024, the last day of its fiscal year. The enterprise fund was established this year through a transfer from the General Fund.
Debits
Credits
Accounts payable
$ 108,000
Accounts receivable
$ 27,400
Accrued interest payable
30,600
Accumulated depreciation
49,000
Administrative and selling expenses
51,000
Allowance for uncollectible accounts
13,000
Capital assets
714,000
Cash
96,800
Charges for sales and services
561,000
Cost of sales and services
500,000
Depreciation expense
49,000
Due from General Fund
17,300
Interest expense
40,500
Interest revenue
5,300
Transfer in from General Fund
117,600
Bank note payable
630,400
Supplies inventory
18,900
Totals
$ 1,514,900
$ 1,514,900
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Relationship between budgetary fund balance and actual fund balance
The Village of Albert’s Alley recorded the following budgetary journal entry at the beginning of fiscal 2022:
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At the end of fiscal 2022, what would be the effect on the ending actual fund balance, assuming the following:
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year ended September 30, 2024:
Inflow of Financial Resources:
Property taxes
Sales taxes
Fees and fines
Licenses and permits
Intergovernmental
Investment earnings
Proceeds from sale of land
Outflows of Financial Resources:
Current:
General government
Public safety
Public works
Health and sanitation
Culture and recreation
Transfer to capital project fund
Fund balance, October 1, 2023
Revenues:
Taxes:
Total Revenues
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From the information given above, prepare a General Fund Statement of Revenues, Expenditures, and Changes in Fund Balance for
the city of Eastern Shores General Fund for the year ended September 30, 2024.
Note: Negative entries should be entered with a minus sign and will appear in parenthesis.
CITY OF EASTERN SHORES
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Check my work
The finance director for the City of Green Falls printed the General Fund Revenues and Appropriations Ledgers shown below for the
year just ended.
REVENUES LEDGER
Ref.
Account Description
Est. Revenues
Dr(Cr)
Revenues
Balance
Cr(Dr)
Dr(Cr)
Estimated Revenues-Taxes-Real Property
102
Budget Authorization
6,452,400
6,452,400
103
Accrued Revenue
104
Previous Deferral
109
Deferral
6,455,000
345,000
(308,000)
(2,600)
(347,600)
(39,600)
110
Budget Amendment
111
Closing entry
40,000
(6,492,400)
400
(6,492,000)
112
Closing entry
(6,492,000)
Estimated Revenues-Taxes-Sales
102
Budget Authorization.
103
Received in Cash
110
Budget Amendment
111
Closing Entry
112
Closing Entry
736,250
(25,000)
(711,250)
710,600
736,250
25,650
650
(710,600)
(710,600)
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Prepare the necessary closing entries for the General Fund for the year ended December 31, 2021.
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The following information is provided about some of the Town of Truesdale’s General Fund operating statement and budgetary accounts for the fiscal year ended June 30.
Estimated revenues
$
3,150,000
Revenues
3,190,000
Appropriations
3,185,000
Expenditures
3,175,000
Estimated other financing sources
400,000
Encumbrances
20,000
Encumbrances outstanding
20,000
Budgetary fund balance
(calculate)
The Town of Truesdale will honor all of its outstanding encumbrances in the next fiscal period. Prepare the journal entry(ies) to close budgetary accounts required to be closed at the fiscal year end using the information provided.
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2
The Village of Seaside Pines prepared the following enterprise fund Trial Balance as of December 31, 2024, the last day of its fiscal year. The enterprise fund was established this year through a transfer from the General Fund.
Debits
Credits
Accounts payable
$ 108,000
Accounts receivable
$ 27,400
Accrued interest payable
30,600
Accumulated depreciation
49,000
Administrative and selling expenses
51,000
Allowance for uncollectible accounts
13,000
Capital assets
714,000
Cash
96,800
Charges for sales and services
561,000
Cost of sales and services
500,000
Depreciation expense
49,000
Due from General Fund
17,300
Interest expense
40,500
Interest revenue
5,300
Transfer in from General Fund
117,600
Bank note payable
630,400
Supplies inventory
18,900
Totals
$ 1,514,900
$ 1,514,900
Required:
Prepare the closing entries for December 31.
Prepare the Statement of Revenues, Expenses, and Changes in Fund…
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Budget & Fund Balance: The Wayne City Council approved and adopted its budget for 2020. The budget contained the following amounts:
Estimated revenues
$ 800,000
Appropriations
$ 700,000
Estimated other financing uses-interfund transfers out
$ 60,000
During the year 2020, the following transactions and events occurred that affected the general fund.
Property tax revenue
$ 675,000
Interfund transfer out to the debt service fund
$ 45,000
Interfund transfer in received by general fund
$ 60,000
Expenditures
$ 430,000
Encumbrances, balance at 2020 year-end
$ 120,000
Required: Complete #1-3 below.
1) Prepare the entry to close the budget.…
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Preparation of appropriations ledger
Prepare an appropriations ledger similar to Table 3-6 to record the transactions and events applicable to the appropriation for Parks department—plants and supplies.The ledger should have columns for appropriation (Cr.), encumbrances (Dr. and Cr.), expenditures (Dr.), and available appropriation (Cr.).
The following transactions and events occurred in Marilyn County during calendar year 2022:1. The legislature adopted the following budget:
Estimated revenues and other sources:
Property taxes
$1,740,000
Sales taxes
1,000,000
Use of fund balance
10,000
Total
$2,750,000
Appropriations:
General government—salaries
$420,000
General government—supplies
30,000
Parks department—salaries
2,000,000
Parks department—plants and supplies
300,000
Total
$2,750,000
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The Balance Sheet of the Street and Highway Fund of the City of Monroe as of December 31, 2019, follow.
CITY OF MONROE
Street and Highway Fund Balance Sheet
As of December 31, 2019
Assets
Cash
$
19,000
Investments
63,000
Due from state government
107,000
Total assets
$
189,000
Liabilities and Fund Equity
Liabilities:
Accounts payable
$
10,000
Fund equity:
Fund balance—assigned for streets and highways
179,000
Total liabilities and fund equity
$
189,000
3-C. This portion of the continuous problem continues the special revenue fund example by requiring the recording and posting of the budgetary entries. To reduce clerical effort required for the solution use control accounts for the budgetary accounts, revenues, expenditures and encumbrances. Subsidiary accounts are not required. Budget information for the City includes: (1) Also as of January 1, 2020, the City Council approved and the mayor signed a budget for the…
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The following items were included in Simple City's General Fund expenditures for the year ended June 30:
Computer for the city treasurer's office
$ 6,000
Furniture for the mayor’s office
$ 20,000
How much should be classified as capital assets in Simple City's government-wide statement of net position at June 30?
Multiple Choice
$26,000
$0
$20,000
$6,000
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