Chapter 4 Case Study (1)

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Reedley College *

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Accounting

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Jun 10, 2024

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docx

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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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