CHAPTER 17
GOVERNMENTAL ENTITIES: GENERAL FUND
The title of each problem is followed by the estimated time in minutes required for completion and by a difficulty rating. The time estimates are applicable for students using the partially filled-in working papers. Pr. 17–1 Weedpatch County (30 minutes, medium)
Preparation of a statement of revenues, expenditures, and changes in fund balance and a balance sheet for a governmental entity general fund.
Pr. 17–2 City of Lory (40 minutes, medium)
Preparation of journal entries to record budgeted and actual transactions and events of a governmental entity general fund, given post-closing trial balances at beginning and end of fiscal year and aggregate transactions and events and closing entries.
Pr. 17–3 City of Riverdale (30 minutes, medium)
Journal entries to correct accounting records of general fund of a governmental entity whose accountant failed to maintain separate funds.
Pr. 17–4 Canning County (50 minutes, medium)
Preparation of journal entries for transactions and events of a governmental entity general fund for a fiscal year.
Pr. 17–5 Arden School District (50 minutes, medium)
Preparation of financial statements and closing entries for a governmental entity general fund, given a trial balance for the fund.
Pr. 17–6 Melton School District (60 minutes, medium)
Reconstruction of journal entries for a governmental entity general fund, from the general fund's post-closing trial balance at the end of the preceding fiscal year, pre-closing trial balance at the end of the current fiscal year, and other data. Preparation of closing entries and post-closing trial balance.
Pr. 17–7 City of Romaine (30 minutes, medium)
Computation of property tax levy required for a governmental entity general fund for the forthcoming fiscal year.
Pr. 17–8 Town of Tosca (50 minutes, medium)
Reconstruction of journal entries for a governmental entity general fund, from analysis of changes in ledger account balances of the general fund for the current fiscal year and from other data.
Pr. 17–9 City of Douglas (50 minutes, medium)
Journal entries for transactions and events of a governmental entity general fund, and closing entry for the fund.
ANSWERS TO REVIEW QUESTIONS
1. No, the Financial Accounting Standards Board does not establish accounting standards for government entities. The Governmental Accounting Standards Board performs that function. 2. Characteristics of governmental entities that have a significant influence on the accounting for such
entities are the following:
(1) Governmental entities exist to serve the citizens subject to their jurisdiction.
(2) With few exceptions, governmental entities render services to the citizenry without the object of profiting from these services.
(3) The citizens subject to a governmental entity's jurisdiction provide resources to the governmental entity principally through taxation.
(4) Operations of governmental entities are for the most part initiated by various legislative enactments.
(5) Governmental entities' primary responsibility in financial reporting is to demonstrate adequate stewardship for resources provided by their citizenry.
3. The Government Accounting Standards Board has defined a fund for governmental entities accounting purposes as a "fiscal and accounting entity with a self-balancing set of accounts recording cash and other financial resources, together with all related liabilities and residual equities or balances, and changes therein, which are segregated for the purpose of carrying on specific activities or attaining certain objectives in accordance with special regulations, restrictions, or limitations."
4. a. Support for the use of the modified accrual basis of accounting for general funds of
governmental entities lies in the importance of the annual budget as a control device for those funds. The modified accrual basis of accounting requires the recognition of revenues when they are measurable and available to achieve a better matching with the estimated revenues in the annual budget.
b. The encumbrance technique is supported by the need for control over expenditures to assure that they do not exceed appropriated amounts. If purchase orders and other commitments against appropriations were not recorded in the expenditures subsidiary ledger, an unexpended balance of a budgetary appropriation might accidentally be overexpanded or overcommitted. c. Recording the budget in the accounting records of the various funds permits the legislative
authority to exercise control over the expenditures of the funds. Actual revenues and
expenditures are compared with budgeted revenues and appropriations during a fiscal year and in the comprehensive annual financial report for the fiscal year.
5. a. A program budget stresses measurement of the total cost of a governmental program, regardless of how many governmental entity departments are involved in the program. In contrast, a performance budget relates input of resources to a specific governmental entity department against the output of services of that department.
b. A budgetary deficit is an excess of appropriations and estimated other financing uses over estimated revenues and estimated other financing sources in an annual deficit budget.
6. The Estimated Revenues ledger account of a governmental entity general fund sometimes is alluded to as a pseudo asset because it reflects revenues expected to be received by the general fund during the fiscal year. However, the Estimated Revenues account does not fit the accounting definition of an asset. The Appropriations ledger account may be considered a pseudo liability because it reflects the legislative body's commitments to expend resources for the general fund. However, the Appropriations account does not fit the accounting definition of a liability.
7. The Budgetary Fund Balance ledger account of a general fund is used to balance the debit and credit entries to accounts (Estimated Revenues, Appropriations, Estimated Other Financing Sources, Estimated Other Financing Uses) in the journal entry to record the general fund's annual budget. At the end of the fiscal year, the Budgetary Fund Balance account is closed by a journal entry that reverses the original budget entry.
8. A general fund is residual because it is used to account for all transactions and events of a governmental entity not accounted for in one of the other ten types of funds. Although the general fund is residual, it generally accounts for the largest aggregate dollar amounts of the governmental entity's revenues and expenditures.
9. Revenues of a governmental entity's general fund that generally are accrued include property taxes, fines, charges for services, investment income, and operating lease rents.
10. The Expenditures ledger account of a governmental entity general fund records amounts paid or to be paid in cash by the general fund under the appropriations authorized by the legislative branch of the governmental entity. The Expenditures account of a general fund does not show the cost expirations chargeable to revenues, as do the expense accounts of a business enterprise.
11. The Other Financing Sources ledger account is used to record nonrevenue items such as transfers in to the general fund from other funds. The Other Financing Uses account reflects amounts of transfers out from the general fund to other funds; these transfers are not expenditures of the general fund.
12. The Fund Balance Reserved for Inventory of Supplies ledger account of a general fund represents a restriction of the Unreserved and Undesignated Fund Balance account to guard against the
financing of a deficit budget with general fund resources not available for expenditure. The
Unreserved and Undesignated Fund Balance ledger account of a general fund shows the net amount of a general fund's resources available for appropriation by the legislative branch to finance a budgetary deficit.
13. A reservation of the fund balance of a governmental entity general fund is a mandatory restriction of the fund balance for such items as inventory of supplies and outstanding encumbrances. A designation of the fund balance is a voluntary earmarking of the fund balance for planned future appropriations such as acquisition of equipment.
14. a. The financial statements for a governmental entity general fund are a statement of revenues, expenditures, and changes in fund balance, and a balance sheet.
b. The principal differences between the financial statements of a governmental entity general fund and the financial statements of a business enterprise are as follows:
(l) Some revenues, such as fees for licenses and permits, are recognized on the cash basis in the general fund.
(2) The general fund does not record the governmental entity's plant assets or long-term debt. (3) General fund inventories are offset by a fund balance reserve.
(4) The encumbrance technique often is used to segregate a portion of the general fund's Unreserved and Undesignated Fund Balance ledger account for the amounts of unfilled purchase orders.
(5) Neither of the general fund's financial statements is designed to present the general fund's operating results in terms of net income or net loss.
SOLUTIONS TO EXERCISES
Ex. 17–1 1. b 7. b 2. d 8. c 3. a 9. d 4. a 10. a 5. b 11. a 6. d 12. aEx. 17–2 General GovernmentSupplies
Date Explanation Appropria-tion, credit brance, debitEncum- Expenditure, debit
Unexpended, unencumber-ed balance, credit 2005 July 1 Budgeted appropriation 100,000 100,000 2 P.O. 4–1 to Crosby Company 20,000 80,000 3 Inv. 6392 from Crosby Company (20,000) 20,120 79,880 5 Defective supplies returned to Crosby CompanyD.M. 4–6 (640) 80,520 8 P.O. 4–14 to Lassen Company 18,000 62,520
Ex. 17–3 Journal entry for Winston County General Fund, July l, 2005:
Taxes ReceivableCurrent 640,000
Allowance for Uncollectible Current Taxes ($640,000 x
0.04) 25,600
Revenues 614,400
To accrue property taxes billed and to provide for estimated uncollectible portion.
Ex. 17–4 Journal entries for City of Gaskill General Fund: 2005
July 25 Encumbrances 2,390
Fund Balance Reserved for Encumbrances 2,390
To record purchase order issued for office supplies for city manager's office.
Aug. 9 Inventory of Supplies 2,500
Vouchers Payable 2,500
To record expenditure for office supplies for city manager's office.
9 Fund Balance Reserved for Encumbrances 2,390
Encumbrances 2,390
To reverse encumbrance applicable to vouchered expenditure of $2,500.
Ex. 17–5 Journal entries for Glengarry School District General Fund for year ended June 30, 2006:
Encumbrances 168,400
Fund Balance Reserved for Encumbrances 168,400
Inventory of Supplies 170,900
Vouchers Payable 170,900
Fund Balance Reserved for Encumbrances 168,400
Encumbrances 168,400
Expenditures ($60,200 + $170,900 – $78,300) 152,800
Inventory of Supplies 152,800
Unreserved and Undesignated Fund Balance ($78,300 – $60,200) 18,100
Fund Balance Reserved for Inventory for Supplies 18,100
Ex. 17–6 Correcting journal entries for Rainbow County General Fund, June 30, 2006:
Other Financing Uses 800,000
Accounts Receivable 800,000
To correct July 1, 2005, journal entry for operating transfer of cash to Internal Service Fund.
Expenditures 120,000
Equipment 120,000
To transfer amount of Sept. 1, 2005, acquisition of equipment to appropriate ledger account.
Ex. 17–7 Closing entries for Town of Irving General Fund, June 30, 2006:
Unreserved and Undesignated Fund Balance 10,000
Encumbrances 10,000
To close Encumbrances ledger account.
Appropriations 1,520,000
Budgetary Fund Balance ($1,600,000 – $1,520,000) 80,000
Estimated Revenues 1,600,000
To close budgetary ledger accounts.
Revenues 1,616,000
Expenditures 1,500,000
Unreserved and Undesignated Fund Balance 116,000
To close Revenues and Expenditures ledger accounts.
Ex. 17–8 Closing entries for Bixby Village General Fund, June 30, 2006:
Unreserved and Undesignated Fund Balance 1,000
Encumbrances 1,000
Appropriations 400,000
Estimated Other Financing Uses 6,000
Budgetary Fund Balance 30,000
Estimated Revenues 426,000
Estimated Other Financing Sources 10,000
Revenues 440,000
Other Financing Sources 14,000
Expenditures 395,000
Other Financing Uses 5,000
Unreserved and Undesignated Fund Balance 54,000
Ex. 17–9 Closing entries for Village of Mortimer General Fund, June 30, 2006:
Unreserved and Undesignated Fund Balance 11,400
Encumbrances 11,400
To close Encumbrances ledger account.
Appropriations 890,000
Budgetary Fund Balance 90,000
Estimated Revenues 980,000
To close budgetary ledger accounts.
Revenues 976,700
Expenditures 896,200
Unreserved and Undesignated Fund Balance 80,500
To close Revenues and Expenditures ledger accounts.
Ex. 17–10 TOWN OF PARKSIDE GENERAL FUND
Balance Sheet June 30, 2006
Assets
Cash $150,000
Taxes receivable, net of allowance for estimated uncollectible
amounts, $5,000 45,000
Inventory of supplies 60,000
Total assets $255,000
Liabilities & Fund Balance Liabilities:
Vouchers payable $ 80,000
Payable to Enterprise Fund 20,000
Total liabilities $100,000
Fund balance:
Reserved for encumbrances $ 4,000
Reserved for inventory of supplies 60,000
Unreserved and undesignated 91,000 155,000
Ex. 17–11 Computation of balance of City of Winkle General Fund Unreserved and Undesignated Fund Balance ledger account, June 30, 2006:
Balance , beginning of year $214,700
Add: Decrease in balance of Fund Balance Reserved for Encumbrances ledger
account ($18,100 – $14,800) 3,300
Excess of revenues over expenditures 37,600
Subtotal $255,600
Less: Increase in balance of Fund Balance Reserved for Inventory of Supplies
ledger account ($88,200 – $80,600) 7,600
Balance, end of year $248,000
Ex. 17–12 Journal entries for Town of Oldberry General Fund, June 30, 2006:
Fund Balance Reserved for Inventory of Supplies 3,700
Unreserved and Undesignated Fund Balance 3,700
To decrease inventory of supplies reserve to agree with balance of Inventory of Supplies ledger account at end of year.
Unreserved and Undesignated Fund Balance 6,200
Encumbrances 6,200
To close Encumbrances ledger account.
Revenues 840,200
Expenditures 764,800
Unreserved and Undesignated Fund Balance 75,400
To close Revenues and Expenditures ledger accounts.
Unreserved and Undesignated Fund Balance 60,000
Fund Balance Designated for Replacement of Equipment 60,000
To designate a portion of the fund balance for the replacement of equipment.
CASES
Case 17–1 Deficiencies of the financial statements of Corbin City General Fund include the following: (1) The "income statement" and statement of changes in fund balance should be combined in a
statement of revenues, expenditures, and changes in fund balance on a budget, actual, and variance basis.
(2) "Expenses" should be titled "expenditures."
(3) "Net income" should be titled "excess of revenues over expenditures."
(4) Depreciation should not be included in the financial statements of a general fund. (5) Plant assets should not be included in the financial statements of a general fund.
(6) The $20,000 "reserve" for delinquent property taxes should be offset against the $80,000 property taxes receivable, with the $60,000 net amount displayed in the assets section of the balance sheet.
(7) The amount of $110,000 should be segregated in the liabilities and fund balance (with reserves deleted) section of the balance sheet as "fund balance reserved for inventory of supplies." The amount of $160,000 ($4,890,000 fund balance – $4,620,000 plant assets – $110,000 reserved for inventory of supplies = $160,000) should be displayed in the liabilities and fund balance section of the balance sheet as unreserved and undesignated fund balance.
Case 17–2 Student Ella apparently supports the adage "Don't count the chickens before they hatch." That philosophy supports the modified accrual basis of accounting for general funds of
governmental entities, under which revenues are not recognized unless they are measurable
and available. Those requirements preclude the accrual of self-assessed taxes such as income taxes and sales taxes, for which the governmental entity does not bill the taxpayers unless the taxes are delinquent or underpaid when reported. Given that estimated revenues in general fund budgets do include amounts expected to be collected for income taxes and sales taxes, the modified accrual basis of accounting causes inconsistent budget variances, as recognized by student Janice. Further, given that the accrual basis of accounting is used for proprietary funds of governmental entities, consistent application of accounting principles supports the use of accrual accounting for general funds and other governmental funds of governmental entities. Case 17–3 Fund accounting by governmental entities is justified because of the need for careful
monitoring of revenues and expenditures or expenses of various departments and activities of governmental entities. Unlike publicly owned business enterprises, governmental entities do not have oversight provided by audit committees of boards of directors, or regulatory agencies such as the Securities and Exchange Commission. Some governmental entities do not have audits by independent certified public accountants because no federal laws mandate such audits, which are required for publicly owned companies. Further, not all governmental entities have internal audit staffs. Given such lack of oversight, prudence dictates that functions in governmental entities be separated more than would be necessary for business enterprises; funds help provide such separation.
30 Minutes, Medium
Weedpatch County Pr. 17–1
Weedpatch County General Fund
Statement of Revenues, Expenditures, and Changes in Fund Balance For Year Ended June 30, 2006
(amounts in thousands)
Variance favorable Budget Actual (unfavorable)
Revenues $ 8 0 0 $ 8 3 0 $ 3 0
Expenditures 7 8 0 7 5 0 3 0
Net change in fund balance $ 2 0 $ 8 0 $ 6 0
Fund balance, beginning of year 6 8 6 8
Fund balance, end of year $ 8 8 $ 1 4 8 $ 6 0
Weedpatch County General Fund Balance Sheet
June 30, 2006 (amounts in thousands)
Assets
Cash $ 1 0 0
Taxes receivable, net of allowance for estimated
uncollectible amounts, $10 5 0
Inventory of supplies 5 0
Total assets $ 2 0 0
Liabilities & Fund Balance Liabilities:
Vouchers payable $ 4 0
Payable to other funds 1 2
Total liabilities $ 5 2
Fund balance:
Reserve for encumbrances $ 4
Reserve for inventory of supplies 5 0
Unreserved and undesignated 9 4 * 1 4 8
Total liabilities & fund balance $ 2 0 0
*Balance, July 1, 2005 $ 22,000
Add: Decrease in encumbrances
reserve ($6,000 – $4,000) 2,000 Excess of revenues over expenditures 80,000
Subtotal $104,000
Less: Increase in inventory reserve
($50,000 – $40,000) 10,000 Balance, June 30, 2006 (after closing) $ 94,000
40 Minutes, Medium
City of Lory Pr. 17–2
City of Lory General Fund Journal Entries For Year Ended June 30, 2006
Estimated Revenues 2 0 0 0 0 0 0
Appropriations 1 9 4 0 0 0 0
Budgetary Fund Balance 6 0 0 0 0
To record annual budget adopted for fiscal year ending June 30, 2006.
Taxes Receivable 1 8 7 0 0 0 0
Allowance for Uncollectible Taxes 1 0 0 0 0
Revenues 1 8 6 0 0 0 0
To accrue property taxes billed and to provide for estimated uncollectible portion.
Cash 1 8 2 0 0 0 0
Taxes Receivable 1 8 2 0 0 0 0
To record collections of property taxes for the year.
Allowance for Uncollectible Taxes 8 0 0 0
Taxes Receivable 8 0 0 0
To write off receivables for property taxes that are uncollectible.
Encumbrances 1 0 7 0 0 0 0
Fund Balance reserved for Encumbrances 1 0 7 0 0 0 0
To record purchase orders for nonrecurring expenditures issued during the year.
Expenditures 1 8 4 0 0 0 0
Vouchers Payable 1 8 4 0 0 0 0
To record expenditures for the year.
Fund Balance Reserved for Encumbrances 1 0 0 0 0 0 0
Encumbrances 1 0 0 0 0 0 0
To reserve encumbrances applicable to vouchered expenditures.
Vouchers Payable 1 8 5 2 0 0 0
Cash 1 8 5 2 0 0 0
To record payment of vouchers during the year.
City of Lory (concluded) Pr. 17–2 City of Lory General Fund
Journal Entries (concluded) For Year Ended June 30, 2006
Unreserved and Undesignated Fund Balance 7 0 0 0 0
Encumbrances 7 0 0 0 0
To close Encumbrances ledger account.
Appropriations 1 9 4 0 0 0 0
Budgetary Fund Balance 6 0 0 0 0
Estimated Revenues 2 0 0 0 0 0 0
To close budgetary ledger accounts.
Revenues 1 8 6 0 0 0 0
Expenditures 1 8 4 0 0 0 0
Unreserved and Undesignated Fund Balance 2 0 0 0 0
To close Revenues and Expenditures ledger accounts.
30 Minutes, Medium
City of Riverdale Pr. 17–3
City of Riverdale General Fund Correcting Journal Entries
December 31, 2006
(1) Estimated Revenues 8 1 5 0 0 0
Appropriations 7 7 5 0 0 0
Budgetary Fund Balance 4 0 0 0 0
To record annual budget adopted for year ending Dec. 31, 2006.
(2) Encumbrances 2 5 0 0
Fund Balance Reserved for Encumbrances 2 5 0 0
To record outstanding purchase orders for operating expenditures.
(3) Revenues 1 9 0 0 0 0
Donated Land 1 9 0 0 0 0
To remove donated land erroneously recorded as an asset in General Fund.
River Bridge Bonds Payable 1 0 0 0 0 0
Contract Payable—River Bridge 3 0 0 0 0
Construction in Progress—River Bridge 1 3 0 0 0 0
To remove accounts relating to river bridge construction project erroneously recorded in General Fund.
(4) Taxes Receivable—Delinquent 1 4 8 5 0 0
Allowance for Uncollectible Current Taxes 6 0 0 0
Taxes Receivable—Current 1 4 8 5 0 0
Allowance for Uncollectible Delinquent Taxes 6 0 0 0
To transfer delinquent taxes and related estimated uncollectible amounts from the current classification.
50 Minutes, Medium
Canning County Pr. 17–4
Canning County General Fund Journal Entries For Year Ended June 30, 2006
(1) Estimated Revenues 5 0 0 0 0 0 0
Appropriations 4 8 0 0 0 0 0
Budgetary Fund Balance 2 0 0 0 0 0
To record annual budget adopted for fiscal year ending June 30, 2006.
(2) Taxes Receivable—Current 4 6 5 0 0 0 0
Fines Receivable 2 0 0 0 0 0
Allowance for Uncollectible Current Taxes 1 5 0 0 0 0
Revenue 4 7 0 0 0 0 0
To accrue property taxes and fines billed and to provide for estimated uncollectible portion.
(3) Cash 3 9 0 0 0 0 0
Taxes ReceivableCurrent 3 9 0 0 0 0 0
To record collections of property taxes for the year.
Taxes Receivable—Delinquent 6 3 0 0 0 0
Allowance for Uncollectible Current Taxes 1 5 0 0 0 0
Taxes Receivable—Current 6 3 0 0 0 0
Allowance for Uncollectible Delinquent Taxes 1 5 0 0 0 0
To transfer delinquent taxes and related estimated uncollectible amounts from the current classification.
(4) Cash 4 8 5 0 0 0
Fines Receivable 2 0 0 0 0 0
Revenues 2 7 0 0 0 0
Other Financing Sources 1 5 0 0 0
To record collections of other revenues and proceeds of disposal of equipment for the year.
(5) Encumbrances 2 1 5 0 0 0 0
Fund Balance Reserved for Encumbrances 2 1 5 0 0 0 0
To record purchase orders for nonrecurring expenditures issued during the year.
(6) Expenditures 4 5 6 5 0 0 0
Vouchers Payable 4 5 6 5 0 0 0
To record expenditures for the year. Fund Balance Reserved for Encumbrances
($2,150,000 – $115,000) 2 0 3 5 0 0 0
Encumbrances 2 0 3 5 0 0 0
To reverse encumbrances applicable to vouchered expenditures.
(7) Vouchers Payable 4 6 0 0 0 0 0
Cash 4 6 0 0 0 0 0
To record payment of vouchers during the year.
50 Minutes, Medium
Arden School District Pr. 17–5
a. (1) Arden School District General Fund
Statement of Revenues, Expenditures, and Changes in Fund Balance For Year Ended December 31, 2006
Variance favorable Budget Actual (unfavorable)
Revenues $1 0 0 7 0 0 0 $1 0 0 8 2 0 0 $ 1 2 0 0
Expenditures 9 8 5 0 0 0 9 9 0 2 0 0 ( 5 2 0 0 )
Excess of revenues over expenditures $ 2 2 0 0 0 $ 1 8 0 0 0 $ ( 4 0 0 0 )
Other financing uses 1 5 0 0 0 1 0 0 0 0 5 0 0 0
Net change in fund balance $ 7 0 0 0 $ 8 0 0 0 $ 1 0 0 0
Fund balance, beginning of year 7 0 8 5 0 * 7 0 8 5 0
Fund balance, end of year $ 7 7 8 5 0 $ 7 8 8 5 0 $ 1 0 0 0
*$59,400 + ($11,450 – $9,500) = $61,350; $61,350 + $9,500 = $70,850
(2) Arden School District General Fund Balance Sheet
December 31, 2006
Assets
Cash $ 4 7 2 5 0
Short-term investments 1 1 3 0 0
Property taxes receivable (no allowance) 3 0 0 0 0
Inventory of supplies 1 1 4 5 0
Total assets $ 1 0 0 0 0 0
Liabilities & Fund Balance Liabilities:
Vouchers payable $ 2 0 2 0 0
Payable to Internal Service Fund 9 5 0
Total liabilities $ 2 1 1 5 0
Fund balance:
Reserved for encumbrances $ 2 8 0 0
Reserved for inventory of supplies 1 1 4 5 0
Unreserved and undesignated 6 4 6 0 0 † 7 8 8 5 0
Total liabilities & fund balance $ 1 0 0 0 0 0
Arden School District (concluded) Pr. 17–5
b. Arden School District General Fund Closing Entries
December 31, 2006
Unreserved and Undesignated Fund Balance 2 8 0 0
Encumbrances 2 8 0 0
To close Encumbrances ledger account.
Appropriations 9 8 5 0 0 0
Estimated Other Financing Uses 1 5 0 0 0
Budgetary Fund Balance 7 0 0 0
Estimated Revenues 1 0 0 7 0 0 0
To close budgetary ledger accounts.
Revenues 1 0 0 8 2 0 0
Expenditures 9 9 0 2 0 0
Other Financing Uses 1 0 0 0 0
Unreserved and Undesignated Fund Balance 8 0 0 0
To close Revenues, Expenditures, and Other Financing Uses ledger accounts.
Note to Instructor: After the foregoing closing entries are posted, the balance of the Unreserved and Undesignated Fund Balance ledger account is $64,600 ($59,400 – $2,800 + $8,000 = $64,600), the amount in the balance sheet in a (2).
60 Minutes, Medium
Melton School District Pr. 17–6
a. Melton School District General Fund Journal Entries
For Year Ended June 30, 2006
Estimated Revenues 3 0 0 0 0 0 0
Estimated Other Financing Uses 1 7 0 0 0 0
Appropriations 2 8 1 0 0 0 0
Budgetary Fund Balance 2 0 0 0 0
To record annual budget adopted for fiscal year ending June 30, 2006.
Taxes Receivable 2 8 7 0 0 0 0
Allowance for Uncollectible Taxes 7 0 0 0 0
Revenues from Taxes 2 8 0 0 0 0 0
To accrue property taxes billed and to provide for estimated uncollectible portion.
Cash 2 9 4 0 0 0 0
Taxes Receivable 2 8 1 0 0 0 0
Other Revenues 1 3 0 0 0 0
To record collections of property taxes and other revenues for the year.
Allowance for Uncollectible Taxes 4 0 0 0 0
Taxes Receivable 4 0 0 0 0
To write off receivables for taxes that are uncollectible.
Encumbrances ($2,700,000 + $91,000) 2 7 9 1 0 0 0
Fund Balance Reserved for Encumbrances 2 7 9 1 0 0 0
To record purchase orders for nonrecurring expenditures issued during the year.
Fund Balance Reserved for Encumbrances 6 0 0 0 0
Expenditures 2 7 0 0 0 0 0
Payable to Other Funds 2 1 0 0 0 0
Unreserved and Undesignated Fund Balance
($60,000 – $58,000) 2 0 0 0
Vouchers Payable 2 9 6 8 0 0 0
To record vouchers prepared during the year.
Fund Balance Reserved for Encumbrances 2 7 0 0 0 0 0
Encumbrances 2 7 0 0 0 0 0
To reserve encumbrances applicable to vouchered expenditures for year ended June 30, 2006.
Vouchers Payable 2 6 4 0 0 0 0
Cash 2 6 4 0 0 0 0
To record payment of vouchers during the year.
Other Financing Uses 1 4 2 0 0 0
Melton School District (concluded) Pr. 17–6
b. Melton School District General Fund Closing Entries
June 30, 2006
Unreserved and Undesignated Fund Balance 9 1 0 0 0
Encumbrances 9 1 0 0 0
To close Encumbrances ledger account.
Appropriations 2 8 1 0 0 0 0
Estimated Other Financing Uses 1 7 0 0 0 0
Budgetary Fund Balance 2 0 0 0 0
Estimated Revenues 3 0 0 0 0 0 0
To close budgetary ledger accounts.
Revenues from Taxes 2 8 0 0 0 0 0
Other Revenues 1 3 0 0 0 0
Expenditures 2 7 0 0 0 0 0
Other Financing Uses 1 4 2 0 0 0
Unreserved and Undesignated Fund Balance 8 8 0 0 0
To close Revenues and Expenditures ledger accounts.
c. Melton School District General Fund Post-Closing Trial Balance
June 30, 2006
Cash $ 7 0 0 0 0 0
Taxes receivable 1 7 0 0 0 0
Allowance for uncollectible taxes $ 7 0 0 0 0
Vouchers payable 4 0 8 0 0 0
Payable to other funds 1 4 2 0 0 0
Fund balance reserved for encumbrances 9 1 0 0 0
Unreserved and undesignated fund balance ($162,000
– $91,000 + $88,000) 1 5 9 0 0 0
Totals $ 8 7 0 0 0 0 $ 8 7 0 0 0 0
30 Minutes, Medium
City of Romaine Pr. 17–7
City of Romaine General Fund Computation of Property Tax Levy Required
For Year Ending June 30, 2006
General Fund requirements:
Estimated expenditures, Jan. 1 to June 30, 2005 $1 9 0 0 0 0 0 Proposed appropriations, July 1, 2005 to June 30, 2005 4 3 0 0 0 0 0
Cash balance required for July 1, 2006 1 7 5 0 0 0
Repayment of 30-day tax-anticipation notes:
Principal 2 0 0 0 0 0
Interest ($200,000 x 0.12 x 30/360) 2 0 0 0 $6 5 7 7
0 0 0 0 Total General Fund requirements
General Fund resources other than property tax levy:
Estimated General Fund cash balance, Jan 1, 2005 $ 3 5 2 0 0 0 Estimated receipts from property taxes, Jan. 1, 2005 to June 30, 2005 2 2 2 2 0 0 0 Estimated revenues from investments, Jan. 1, 2005 to June 30, 2006 4 4 2 0 0 0
Issuance of 30-day tax-anticipation notes 2 0 0 0 0 0
Total General Fund resources other than property tax levy 3 2 1 6 0 0 0
50 Minutes, Medium
Town of Tosca Pr. 17–8
Town of Tosca General Fund Journal Entries For Year Ended June 30, 2006
Estimated Revenues 1 0 0 0 0 0 0
Appropriations 9 6 5 0 0 0
Budgetary Fund Balance 3 5 0 0 0
To record annual budget adopted for fiscal year ending June 30, 2006.
Taxes Receivable 8 0 9 0 0 0
Allowance for Uncollectible Taxes 9 0 0 0
Revenues 8 0 0 0 0 0
To accrue property taxes billed and to provide for estimated uncollectible portion.
Cash 9 5 5 0 0 0
Allowance for Uncollectible Taxes 6 0 0 0
Taxes Receivable 7 8 1 0 0 0
Revenues ($955,000 – $775,000) 1 8 0 0 0 0
To record collections of property taxes and other revenues for the year, and to write off uncollectible taxes.
Fund Balance Reserved for Encumbrances 4 0 0 0 0
Payable to Internal Service Fund 7 0 0 0
Payable to Enterprise Fund 6 0 0 0 0
Expenditures [$889,000 – ($37,000 + $7,000 +
$60,000)] 7 8 5 0 0 0
Vouchers Payable 8 8 9 0 0 0
Unreserved and Undesignated Fund Balance
($40,000 – $37,000) 3 0 0 0
To record vouchers prepared during the year.
Vouchers Payable 8 8 0 0 0 0
Cash 8 8 0 0 0 0
To record payment of vouchers during the year.
Expenditures 1 1 0 0 0 0
Payable to Internal Service Fund 1 0 0 0 0
Payable to Enterprise Fund 1 0 0 0 0 0
To record amounts payable to other funds.
Encumbrances 4 7 0 0 0
Fund Balance Reserved for Encumbrances 4 7 0 0 0
To record encumbrances for purchase orders outstanding on June 30, 2006.
(Continued on page 484.)
Town of Tosca (concluded) Pr. 17–8 Town of Tosca General Fund
Journal Entries (concluded) For Year Ended June 30, 2006
Unreserved and Undesignated Fund Balance 4 7 0 0 0
Encumbrances 4 7 0 0 0
To close Encumbrances ledger account.
Appropriations 9 6 5 0 0 0
Budgetary Fund Balance 3 5 0 0 0
Estimated Revenues 1 0 0 0 0 0 0
To close budgetary ledger accounts.
Revenues ($800,000 + $180,000) 9 8 0 0 0 0
Expenditures ($785,000 + $110,000) 8 9 5 0 0 0
Unreserved and Undesignated Fund Balance 8 5 0 0 0
To close Revenues and Expenditures ledger accounts.
Note to Instructor: All cash payments, including amounts payable to other funds, were vouchered before payment.
50 Minutes, Medium
City of Douglas Pr. 17–9
City of Douglas General Fund Journal Entries For Year Ended June 30, 2006
(1) Estimated Revenues 4 0 0 0 0 0
Estimated Other Financing Sources 2 0 0 0 0 0
Appropriations 5 6 0 0 0 0
Estimated Other Financing Uses 2 0 0 0 0
Budgetary Fund Balance 2 0 0 0 0
To record annual budget for fiscal year ending June 30, 2006.
(2) Taxes Receivable—Current ($220,800 ÷ 0.96) 2 3 0 0 0 0 Allowance for Uncollectible Current Taxes
($230,000 x 0.04) 9 2 0 0
Revenues 2 2 0 8 0 0
To accrue property taxes billed and to provide for estimated uncollectible portion.
(3) Encumbrances 5 1 8 0 0 0
Fund Balance Reserved for Encumbrances 5 1 8 0 0 0
To record purchase orders for nonrecurring expenditures issued during the year.
(4) Cash 6 6 4 0 0 0
Taxes Receivable—Delinquent 3 8 0 0 0
Taxes Receivable—Current 2 2 6 0 0 0
Expenditures 4 0 0 0
Revenues 1 9 6 0 0 0
Other Financing Sources 2 0 0 0 0 0
To record collection of property taxes, other revenue, other financing sources, and refund from a vendor for the year.
(5) Fund Balance Reserved for Encumbrances 1 2 0 0 0
Inventory of Supplies 8 0 0 0 0
Expenditures ($298,000 – $80,000 + $244,000) 4 6 2 0 0 0
Other Financing Uses 2 0 0 0 0
Unreserved and Undesignated Fund Balance
($12,000 – $10,000) 2 0 0 0
Payable to Capital Projects Fund 2 0 0 0 0
Vouchers Payable ($572,000 – $20,000) 5 5 2 0 0 0
To record expenditures and other vouchered items for the year.
(Continued on page 486.)
City of Douglas (continued) Pr. 17–9 City of Douglas General Fund
Journal Entries (continued) For Year Ended June 30, 2006
Fund Balance Reserved for Encumbrances 2 9 2 0 0 0
Encumbrances 2 9 2 0 0 0
To reverse encumbrances applicable to vouchered expenditures.
(6) Vouchered Payable 5 8 0 0 0 0
Cash 5 8 0 0 0 0
To record payment of vouchers during the year.
(7) Expenditures ($18,000 + $80,000 – $12,000) 8 6 0 0 0
Inventory of Supplies 8 6 0 0 0
To record cost of supplies used during the year. fcccccfefcccfccvcxreredfrsswfrfs
Fund Balance Reserved for Inventory of Supplies
($18,000 – $12,000) 6 0 0 0
Unreserved and Undesignated Fund Balance 6 0 0 0
To decrease inventory of supplies reserve to $12,000 to agree with balance of Inventory of Supplies ledger account at end of year.
(8) Unreserved and Undesignated Fund Balance 2 0 0 0 0 Fund Balance Designated for Acquisition of
Equipment 2 0 0 0 0
To designate a portion of the fund balance for the acquisition of equipment during the year ending June 30, 2006.
(9) Taxes Receivable—Delinquent ($230,000 – $226,000) 4 0 0 0
Allowance for Uncollectible Current Taxes 9 2 0 0
Allowance for Uncollectible Delinquent Taxes 4 0 0 0
Taxes Receivable—Current 4 0 0 0
Unreserved and Undesignated Fund Balance
($9,200 – $4,000) 5 2 0 0
To transfer delinquent taxes and related estimated uncollectible amounts from the current classification, and to restore unneeded allowance to fund balance.
City of Douglas (concluded) Pr. 17–9 City of Douglas General Fund
Journal Entries (concluded) For Year Ended June 30, 2006
Unreserved and Undesignated Fund Balance
($518,000 – $292,000) 2 2 6 0 0 0
Encumbrances 2 2 6 0 0 0
To close Encumbrances ledger account.
Appropriations 5 6 0 0 0 0
Estimated Other Financing Uses 2 0 0 0 0
Budgetary Fund Balance 2 0 0 0 0
Estimated Revenues 4 0 0 0 0 0
Estimated Other Financing Sources 2 0 0 0 0 0
To close budgetary ledger accounts.
Revenues ($220,800 + $196,000) 4 1 6 8 0 0
Other Financing Sources 2 0 0 0 0 0
Expenditures ($462,000 + $86,000 – $4,000) 5 4 4 0 0 0
Other Financing Uses 2 0 0 0 0
Unreserved and Undesignated Fund Balance 5 2 8 0 0
To close Revenues, Other Financing Sources, Expenditures, and Other Financing Uses ledger accounts.