Chapter 4, Problem 22EP

a.

To determine

Journalize the given transactions for the fiscal year 2017 in General Fund and governmental activities general journals.

Explanation of Solution

General Fund: The chief operating fund of state and local government used to record the departmental operating activities and government support services is referred to as General Fund, or General Operating Fund, or General Revenue Fund. The activities recorded in General Funds are police, fire, public works, recreation, education, culture, social services, city office, finance, personnel, and data processing.

Journalize the given transactions for the fiscal year 2017 in General Fund and governmental activities general journals.

1.

Entry to record the budget:

			General Ledger		Subsidiary Ledger
			Debits	Credits	Debits	Credits
General Fund:
Estimated Revenues			$2,774,000
		Budgetary Fund Balance		$81,000
		Appropriations		2,693,000
Estimated Revenues Ledger:
Taxes					$1,943,000
Licenses and Permits					372,000
Internalgovernmental Revenue					397,000
Miscellaneous Revenues					62,000
Appropriations Ledger:
	General Government					$471,000
	Public Safety					886,000
	Public Works					650,000
	Health and Welfare					600,000
	Miscellaneous					86,000

Table (1)

2.

Entry to record the encumbrances against appropriations:

		General Ledger		Subsidiary Ledger
		Debits	Credits	Debits	Credits
General Fund:
Encumbrances–2017		$931,000
	Encumbrances Outstanding–2017		$931,000
Encumbrances Ledger:
General Government				$58,000
Public Safety				250,000
Public Works				392,000
Health and Welfare				160,000
Miscellaneous				71,000

Table (2)

3.

Entries to record property tax levy:

		General Ledger		Subsidiary Ledger
		Debits	Credits	Debits	Credits
General Fund:
Taxes Receivable–Current		$2,005,000
	Allowance for Uncollectible Current Taxes		$65,000
	Revenues		1,940,000
Revenues Ledger:
	Property Taxes				$1,940,000
Governmental Activities:
Taxes Receivable–Current		$2,005,000
	Allowance for Uncollectible Current Taxes		$65,000
	General Revenues–Property Taxes		1,940,000

Table (3)

4.

Entry to record collection of delinquent taxes:

		General Ledger		Subsidiary Ledger
		Debits	Credits	Debits	Credits
General Fund and Governmental Activities:
Cash		$1,591,000
	Taxes Receivable–Delinquent		$132,000
	Taxes Receivable–Current		1,459,000

Table (4)

5.

Entry to charge costs to appropriations:

			General Ledger		Subsidiary Ledger
			Debits	Credits	Debits	Credits
General Fund:
Expenditures–2017			$1,750,100
		Vouchers Payable		$1,750,100
Expenditures Ledger:
General Government					$411,000
Public Safety					635,000
Public Works					254,000
Health and Welfare					439,000
Miscellaneous					11,100
Governmental Activities:
Expenses–General Government			$422,100
Expenses–Public Safety			635,000
Expenses–Public Works			254,000
Expenses–Health and Welfare			439,000
	Vouchers Payable			$1,750,100

Table (5)

6.

Entry for the receipt of invoice for the goods ordered in prior year and payment approval:

		General Ledger		Subsidiary Ledger
		Debits	Credits	Debits	Credits
General Fund:
Encumbrances Outstanding–2016		$14,000
	Encumbrances–2016		$14,000
Encumbrances Ledger–2016:
	Public Safety				$14,000
Expenditures–2016		14,000
Expenditures–2017		470
	Vouchers Payable		14,470
Expenditures Ledger–2017:
Public Safety				$470
Expenditures Ledger–2016:
Public Safety				14,000
Governmental Activities:
Expenses–Public Safety		14,470
	Vouchers Payable		14,470

Table (6)

7.

Entry for the receipt of invoice for the goods ordered in 2017:

		General Ledger		Subsidiary Ledger
		Debits	Credits	Debits	Credits
General Fund:
Encumbrances Outstanding–2017		$851,200
	Encumbrances–2017		$851,200
Encumbrances Ledger–2017:
	General Government				$52,200
	Public Safety				240,900
	Public Works				357,000
	Health and Welfare				130,100
	Miscellaneous				71,000
Expenditures–2017		850,500
	Vouchers Payable		850,500
Expenditures Ledger–2017:
General Government				$52,700
Public Safety				236,200
Public Works				360,000
Health and Welfare				130,600
Miscellaneous				71,000
Governmental Activities:
Expenses–General Government		123,700
Expenses–Public Safety		236,200
Expenses–Public Works		360,000
Expenses–Health and Welfare		130,600
	Vouchers Payable		850,500

Table (7)

8.

Entry to record revenues collected:

		General Ledger		Subsidiary Ledger
		Debits	Credits	Debits	Credits
General Fund:
Cash		$839,000
	Revenues		$839,000
Revenues Ledger:
	Licenses and Permits				$373,000
	Intergovernmental Revenue				400,000
	Miscellaneous Revenues				66,000
Governmental Activities:
Cash		$839,000
	Program Revenues–General Government–Charges for Services		$373,000
	Program Revenues–Public Safety–Operating Grants and Contributions		400,000
	General Revenues–Miscellaneous		66,000

Table (8)

9.

Entry to record the payment of vouchers:

		General Ledger		Subsidiary Ledger
		Debits	Credits	Debits	Credits
General Fund and Governmental Activities:
Vouchers Payable		$2,505,000
	Cash		$2,505,000

Table (9)

b.

To determine

Prepare the budgetary comparison schedule for the General Fund of the City E for the year ending December 31, 2017.

Explanation of Solution

Budgetary comparison schedule: The schedule that shows the actual revenues, expenditures, outstanding encumbrances in comparison with the budgeted revenues, and appropriations as on a particular date, is referred to as budgetary comparison schedule.

Prepare the budgetary comparison schedule for the General Fund of the City E for the year ending December 31, 2017.

City E
General Fund
Budgetary Comparison Schedule
For the Year Ended December 31, 2017
	Budgeted Amounts (Original and Final)	Actual Amounts	Variance with Final Budget Over (Under)
Revenues:
Taxes	$1,943,000	$1,940,000	$(3,000)
Licenses and permits	372,000	373,000	1,000
Intergovernmental revenue	397,000	400,000	3,000
Miscellaneous revenues	62,000	66,000	4,000
Total Revenues	2,774,000	2,779,000	5,000
Expenditures and Encumbrances:
General government	$471,000	469,500	(1,500)
Public safety	886,000	880,770	(5,230)
Public works	650,000	649,000	(1,000)
Health and welfare	600,000	599,500	(500)
Miscellaneous	86,000	82,100	(3,900)
Total Expenditures	2,693,000	2,680,870	(12,130)
Excess of Revenues over Expenditures	81,000	98,130	17,130
Increase in Encumbrances Outstanding	0	65,800	65,800
Increase in Fund Balances for Year	81,000	163,930	82,930
Fund Balances, January 1, 2017	96,900	96,900	0
Fund Balances, December 31, 2017	$177,900	$260,830	$82,930

Table (10)