a
Introduction:
Government funds: It is the financial resources of government established by the government for money collected for a government project. These funds are created to provide an extra level of transparency and accountability to taxpayers that their tax dollars are used for the appropriate purpose. Governmental funds use the modified accrual basis of accounting, and proprietary and fiduciary funds use accrual basis.
The formal adjustment and closing entries for the general fund for the year ended June 30 20X1
a
Explanation of Solution
Entry | Debit $ | Credit $ |
1. Allowance for uncollectible - Delinquent | 2,200 | |
Fund balance − Unreserved | 2,200 | |
(Reduction in estimated losses on prior year’s taxes to amount of receivables ) | ||
2. Revenue | 27,000 | |
Donated land | 27,000 | |
(Elimination of beginning balance in government wide financial statements) | ||
3. Fund balance − Unreserved | 8,800 | |
Fund balance reserved for encumbrances 20X0 | 8,800 | |
(Recording of outstanding purchase order at year end) | ||
Expenditures − 20X0 | 8,800 | |
Other expenditures | 8,800 | |
(Reclassify purchases of supplies chargeable to prior year appropriations) | ||
4. Encumbrances | 2,100 | |
Budgetary fund balance − reserved for encumbrances | 2,100 | |
(Recording encumbrance for purchase order outstanding at the year end June 30 20X1) | ||
5. Special assessment bonds payable | 100,000 | |
Due to capital project fund | 100,000 | |
(Recording of liability to capital projects fund for cash obtained from sale of special assessment bonds) | ||
6. Revenue | 21,000 | |
Tax anticipation notes payable | 20,000 | |
Due to water utility fund | 1,000 | |
(Recording of tax anticipation notes payable and liability to water utility fund from revenue of scrap sale) | ||
Closing entries: | ||
1. Appropriations control | 348,000 | |
Estimated revenues control | 310,000 | |
2. Budgetary fund balance - Unreserved | ||
(Budgetary appropriation account closed and fund balance transferred to unreserved) | ||
Budgetary fund balance − reserved | 2,100 | |
Encumbrances | 2,100 | |
(Outstanding encumbrances reversed) | ||
3. Fund balance − Unreserved | 2,100 | |
Fund balance − Reserved for encumbrances) | 2,100 | |
(Outstanding encumbrances reserved to be exercised in next year) | ||
4. Revenue | 306,000 | |
Fund balance − Unreserved | 31,200 | |
Other expenses | 271,200 | |
Expenditures − Building addition constructed | 50,000 | |
Expenditures − Serial bonds paid | 16,000 | |
(Record of payment of expenses using revenue) | ||
5. Fund balance − Reserved for encumbrances | 8,800 | |
Expenditures | 8,800 | |
(Reserved encumbrance recognized when expenditure incurred) |
b
Introduction:
Government funds: It is the financial resources of government established by the government for money collected for a government project. These funds are created to provide an extra level of transparency and accountability to taxpayers that their tax dollars are used for the appropriate purpose. Governmental funds use the modified accrual basis of accounting, and proprietary and fiduciary funds use accrual basis.
The formal adjusting entries foe any funds involved, using given information.
b
Explanation of Solution
Entry | Debit $ | Credit $ |
Adjusting Entries: | ||
Capital project fund: | ||
Due from general fund | 100,000 | |
Other financing sources − bond issue | 100,000 | |
(Record receivable due from general fund for proceeds of sale of bonds) | ||
Water utility fund: | ||
Due from general fund | 1,000 | |
Revenue − Miscellaneous | 1,000 | |
(Recording of receivable from general fund for cash obtained from sale of scrap) |
Want to see more full solutions like this?
Chapter 18 Solutions
Advanced Financial Accounting
- Required information Skip to question [The following information applies to the questions displayed below.] The county collector of Sun County is responsible for collecting all property taxes levied by funds and governments within the boundaries of the county. To reimburse the county for estimated administrative expenses of operating the tax custodial fund, the custodial fund deducts 5 percent from the collections for the town, the school district, and the other towns. The total amount deducted is added to the collections for the county and remitted to the Sun County General Fund. The following events occurred during the year: Current-year tax levies to be collected by the custodial fund were County General Fund $ 10,383,000 Town of Bayshore 4,865,000 Sun County Consolidated School District 6,575,000 Total $ 21,823,000 During the year, $13,750,000 of the current year's taxes was collected. The 5 percent administrative…arrow_forwardRequired information [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, 2024, 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 Charges for sales and services Cost of sales and services Depreciation expense Due from General Fund Interest expense Interest revenue Transfer in from General Fund Bank note payable Supplies inventory Totals Debits Adjustments: $ 29,400 53,000 VILLAGE OF SEASIDE PINES ENTERPRISE FUND Reconciliation of Operating Income to Net Cash Provided by Operating Activities For the year ended December 31, 2024 722,000 98,000 504,000 51,000 17,700 40,900 19,700 $ 1,535,700 Credits $ 112,000 32,600 51,000…arrow_forwardJournal entries and financial statements for an Internal Service Fund The city of Pleasantville’s Data Processing Fund, an Internal Service Fund, provides services for a fee toall departments of Pleasantville’s government.The Fund had the following transactions and events during calendar year 2021. (There was no fund balanceat the beginning of the year.)1. The General Fund made a $2,000,000 transfer of cash to establish the Data Processing Fund.2. The Data Processing Fund pays cash for a $1,900,000 computer.3. Supplies costing $4,500 were purchased on credit.4. Bills totaling $650,000 were sent to the various city departments.5. Repairs to the computer were made at a cost of $2,400, on credit.6. Collections from city departments for services (see #4) were $629,000.7. Salaries of $200,000 were paid to the employees.8. Accounts payable totaling $5,900 was paid.9. As of the end of the year, $300 of supplies (see #3) had not been used.10. Depreciation expense on the computer for the year…arrow_forward
- Reconciliations required to yield government-wide financial statements from fund financial statements and preparation of financial statementsThe City of Jackson Hole is preparing its government-wide financial statements for the year. Its accountant must prepare a number of journal entries to recognize assets and liabilities previously omitted from the fund financial statements and to recognize revenues and expenses for the year under accrual accounting that were not recognized under the current financial resources measurement focus and the modified accrual basis of accounting used to prepare the Statement of Revenues, Expenditures, and Changes in Fund Balances for its funds. a. Prepare the journal entries for the required reconciliations to recognize the following in the government-wide financial statements (all amounts in $1,000s): 1. Recognize Capital Assets of $973,320 as of the beginning of the year.2. Record Depreciation Expense of $49,416 for the year and reverse Expenditures of…arrow_forwardThe City of Grinders Switch Maintains its books in a manner that facilitates the preparation of fund accounting statements and uses worksheet adjustments to prepare government-wide statements. You are to prepare, in journal form, worksheet adjustments for each of the following situations. General fixed assets as of the beginning of the year, which had not recorded, were as follows: Land $ 7,554,000 Buildings $33,355,000 Improvements Other Than Buildings $14,820,000 Equipment $11,690,000 Accumulated Depreciation, Capital Assets $25,800,000 2. During the year, expenditures for Capital outlays amounted to $7,500,000. Of that amount $4,800,000 was for buildings; the remainder was for improvements other than buildings. 3. The Capital…arrow_forwardPrepare journal entries for each of the following transactions entered into by the City of Loveland. (If no entry is required for a transaction/event, select "No Journal Entry Required" in the first account field.) Fund/ Governmental Activties Transaction Debit Credit General Journal 1. The city received a donation of land that is to be used by Parks and Recreation to develop a public park. At the time of the donation, the land had an acquisition value of $5,200,000 and was recorded on the donor's books at a historical cost of $4,500,000. 1 General Fund 2. The Public Works Department sold machinery with a historical cost of $35,100 and accumulated depreciation of $28,700 for $6,000. The machinery had originally been purchased with special revenue funds. 2 General Fund 3b 3. A car was leased for the mayor's use. The first payment was $1,000 and the present value of the remaining lease payments was $29,000. (Note: The initial cash payment was made by the General Fund.) 3a General Fund 4a…arrow_forward
- 1. Assume that the City of Juneau maintains its books and records to facilitate the preparation of its fund financial statements. The City pays its employees bi-weekly on Friday. The fiscal year ended on Wednesday, June 30. Employees had been paid on Friday, June 25. The employees paid from the General Fund had earned $120,000 on Monday, Tuesday, and Wednesday (June 28, 29, and 30). What entry, if any, should be made in the City s General Fund? a. Debit Expenditures; Credit Wages and Salaries Payable. b. Debit Expenses; Credit Wages and Salaries Payable. c. Debit Expenditures; Credit Encumbrances. d. No entry is required.arrow_forwardThe City of Jonesboro engaged in the following transactions during the fiscal year ended September 30, 2018. Record the following transactions related to interfund transfers. Be sure to indicate in which fund the entry is being made. a. The city transferred $400,000 from the general fund to a debt service fund to make the interest payments due during the fiscal year. The payments due during the fiscal year were paid. The city also transferred $200,000 from the general fund to a debt service fund to advance-fund the $200,000 interest payment due October 15, 2019. b. The city transferred $75,000 from the Air Operations Special Revenue Fund to the general fund to close out the operations of that fund. c. The city transferred $150,000 from the general fund to the city’s Electric Utility Enterprise Fund to pay for the utilities used by the general and administrative offices during the year. d. The city transferred the required pension contribution of $2 million from the general fund to the…arrow_forwardPreparation of journal entries for government-wide financial statements and preparation of government-wide financial statements The following additional information is furnished to complete this part of the problem. Croton has no activities other than governmental activities. The city’s government-wide statement of net position for the year ended December 31, 2018, showed general capital assets of $14,000 and related accumulated depreciation of $6,400. Depreciation expense on Croton’s general capital assets for 2019 (including assets acquired in 2019) was $700, all of which was applicable to public safety. The city’s government-wide statement of net position for the year ended December 31, 2018, showed bonds payable of $5,500. All the debt had been issued to finance capital assets. Analysis of Croton’s debt service requirements showed that $700 of the total bonds payable as of December 31, 2019, should be reported as current because it is due to be paid during 2020. The city’s…arrow_forward
- ! Required information [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, 2024, 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 Charges for sales and services Cost of sales and services Depreciation expense Due from General Fund Interest expense Interest revenue Transfer in from General Fund Bank note payable Supplies inventory Totals Required A Required B Complete this question by entering your answers in the tabs below. Required C VILLAGE OF SEASIDE PINES ENTERPRISE FUND Statement of Net Position December 31, 2024 Net Position: Net Investment in Capital Assets Unrestricted Total Net Position Debits Required: a.…arrow_forwardProblem 3 The Town of Portsmouth has at the beginning of the year a $213,000 Net Asset balance, and a $52,000 Fund Balance. The following information relates to the activities within the Town of Portsmouth for the year of 20X3. Image included Compensated absences are legally owed to general government workers. Required: Prepare a Statement of Revenues, Expenditures, and Other Changes in Fund Balances for the year ended December 31, 20X3.arrow_forwardThe City of Algonquin maintains its books to prepare fund accounting statements and records worksheet adjustments in order to prepare government-wide statements. You are to prepare, in journal form, worksheet adjustments for each of the following situations: Deferred inflows of resources—property taxes of $73,500 at the end of the previous fiscal year were recognized as property tax revenue in the current year's Statement of Revenues, Expenditures, and Changes in Fund Balance. The City levied property taxes for the current fiscal year in the amount of $13,789,400. When making the entries, it was estimated that 2 percent of the taxes would not be collected. At year-end, $309,200 is thought to be uncollectible, $365,000 would likely be collected during the 60-day period after the end of the fiscal year, and $52,800 would be collected after that time. The City had recognized the maximum of property taxes allowable under modified accrual accounting. In addition to the expenditures…arrow_forward
- AccountingAccountingISBN:9781337272094Author:WARREN, Carl S., Reeve, James M., Duchac, Jonathan E.Publisher:Cengage Learning,Accounting Information SystemsAccountingISBN:9781337619202Author:Hall, James A.Publisher:Cengage Learning,
- Horngren's Cost Accounting: A Managerial Emphasis...AccountingISBN:9780134475585Author:Srikant M. Datar, Madhav V. RajanPublisher:PEARSONIntermediate AccountingAccountingISBN:9781259722660Author:J. David Spiceland, Mark W. Nelson, Wayne M ThomasPublisher:McGraw-Hill EducationFinancial and Managerial AccountingAccountingISBN:9781259726705Author:John J Wild, Ken W. Shaw, Barbara Chiappetta Fundamental Accounting PrinciplesPublisher:McGraw-Hill Education