chapter 17, modern advanced accounting-review q & exr

CHAPTER 17GOVERNMENTAL 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.

The McGraw-Hill Companies, Inc., 2006Solutions Manual, Chapter 17 465

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.

The McGraw-Hill Companies, Inc., 2006466 Modern Advanced Accounting, 10/e

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. b2. d 8. c3. a 9. d4. a 10. a5. b 11. a6. d 12. a

Ex. 17–2 General GovernmentSupplies

Date ExplanationAppropria-tion, credit

Encum-brance, debit

Expenditure, debit

Unexpended, unencumber-ed balance,

credit2005July 1 Budgeted

appropriation 100,000 100,0002 P.O. 4–1 to

Crosby Company 20,000 80,0003 Inv. 6392 from

Crosby Company (20,000) 20,120 79,8805 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 640,000Allowance for Uncollectible Current Taxes ($640,000 x

0.04) 25,600Revenues 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:

2005July 25 Encumbrances 2,390

Fund Balance Reserved for Encumbrances 2,390To record purchase order issued for office supplies for city manager's office.

Aug. 9 Inventory of Supplies 2,500Vouchers Payable 2,500

To record expenditure for office supplies for city manager's office.

9 Fund Balance Reserved for Encumbrances 2,390Encumbrances 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 168,400Fund Balance Reserved for Encumbrances 168,400

Inventory of Supplies 170,900Vouchers Payable 170,900

Fund Balance Reserved for Encumbrances 168,400Encumbrances 168,400

Expenditures ($60,200 + $170,900 – $78,300) 152,800Inventory of Supplies 152,800

Unreserved and Undesignated Fund Balance ($78,300 – $60,200) 18,100Fund 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 800,000Accounts Receivable 800,000

To correct July 1, 2005, journal entry for operating transfer of cash to Internal Service Fund.

Expenditures 120,000Equipment 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 10,000Encumbrances 10,000

To close Encumbrances ledger account.

Appropriations 1,520,000Budgetary Fund Balance ($1,600,000 – $1,520,000) 80,000

Estimated Revenues 1,600,000To close budgetary ledger accounts.

Revenues 1,616,000Expenditures 1,500,000Unreserved 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:


Appropriations 400,000Estimated Other Financing Uses 6,000Budgetary Fund Balance 30,000

Estimated Revenues 426,000Estimated Other Financing Sources 10,000

Revenues 440,000Other Financing Sources 14,000

Expenditures 395,000Other Financing Uses 5,000Unreserved and Undesignated Fund Balance 54,000

Ex. 17–9 Closing entries for Village of Mortimer General Fund, June 30, 2006:



Appropriations 890,000Budgetary Fund Balance 90,000

Estimated Revenues 980,000To close budgetary ledger accounts.

Revenues 976,700Expenditures 896,200Unreserved and Undesignated Fund Balance 80,500


Ex. 17–10 TOWN OF PARKSIDE GENERAL FUNDBalance SheetJune 30, 2006

Assets

Cash $150,000Taxes receivable, net of allowance for estimated uncollectible

amounts, $5,000 45,000Inventory of supplies 60,000

Total assets $255,000

Liabilities & Fund Balance

Liabilities:Vouchers payable $ 80,000Payable to Enterprise Fund 20,000

Total liabilities $100,000Fund balance:

Reserved for encumbrances $ 4,000Reserved for inventory of supplies 60,000Unreserved and undesignated 91,000 155,000

Total liabilities & fund balance $255,000


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 $214,700Add: Decrease in balance of Fund Balance Reserved for Encumbrances ledger

account ($18,100 – $14,800) 3,300Excess of revenues over expenditures 37,600Subtotal $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 3,700Unreserved 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.



Revenues 840,200Expenditures 764,800Unreserved and Undesignated Fund Balance 75,400


Unreserved and Undesignated Fund Balance 60,000Fund 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, MediumWeedpatch 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:

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, MediumCity of Lory Pr. 17–2

City of Lory General Fund

Journal Entries


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


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


To reserve encumbrances applicable to vouchered

expenditures.


Cash 1 8 5 2 0 0 0

To record payment of vouchers during the year.

(Continued on page 475.)


City of Lory (concluded) Pr. 17–2

City of Lory General Fund

Journal Entries (concluded)


Unreserved and Undesignated Fund Balance 7 0 0 0 0

Encumbrances 7 0 0 0 0





To close budgetary ledger accounts.

Revenues 1 8 6 0 0 0 0





30 Minutes, MediumCity 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


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, MediumCanning County Pr. 17–4

Canning County General Fund

Journal Entries


(1) Estimated Revenues 5 0 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


Allowance for Uncollectible Delinquent Taxes 1 5 0 0 0 0


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




(6) Expenditures 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


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



50 Minutes, MediumArden 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:

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

† $78,850 – $2,800 – $11,450 = $64,600


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



Estimated Other Financing Uses 1 5 0 0 0

Budgetary Fund Balance 7 0 0 0



Revenues 1 0 0 8 2 0 0

Expenditures 9 9 0 2 0 0

Other Financing Uses 1 0 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, MediumMelton School District Pr. 17–6

a. Melton School District General Fund

Journal Entries



Estimated Other Financing Uses 1 7 0 0 0 0







Revenues from Taxes 2 8 0 0 0 0 0



Cash 2 9 4 0 0 0 0


Other Revenues 1 3 0 0 0 0

To record collections of property taxes and other

revenues for the year.


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 6 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


To record vouchers prepared during the year.



To reserve encumbrances applicable to vouchered

expenditures for year ended June 30, 2006.


Cash 2 6 4 0 0 0 0


Other Financing Uses 1 4 2 0 0 0

Payable to Other Funds 1 4 2 0 0 0

To record amounts payable to other funds.


Melton School District (concluded) Pr. 17–6

b. Melton School District General Fund

Closing Entries

June 30, 2006





Estimated Other Financing Uses 1 7 0 0 0 0




Revenues from Taxes 2 8 0 0 0 0 0

Other Revenues 1 3 0 0 0 0


Other Financing Uses 1 4 2 0 0 0



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, MediumCity 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 70

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

Property tax levy required for year ending June 30, 2006 $3 3 6 1 0 0 0


50 Minutes, MediumTown of Tosca Pr. 17–8

Town of Tosca General Fund

Journal Entries







Taxes Receivable 8 0 9 0 0 0





Cash 9 5 5 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.


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


($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


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.



To record encumbrances for purchase orders

outstanding on June 30, 2006.



Town of Tosca (concluded) Pr. 17–8

Town of Tosca General Fund










Revenues ($800,000 + $180,000) 9 8 0 0 0 0

Expenditures ($785,000 + $110,000) 8 9 5 0 0 0



Note to Instructor: All cash payments, including

amounts payable to other funds, were vouchered

before payment.


50 Minutes, MediumCity of Douglas Pr. 17–9

City of Douglas General Fund

Journal Entries


(1) Estimated Revenues 4 0 0 0 0 0

Estimated Other Financing Sources 2 0 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




(3) Encumbrances 5 1 8 0 0 0

Fund Balance Reserved for Encumbrances 5 1 8 0 0 0



(4) Cash 6 6 4 0 0 0

Taxes Receivable—Delinquent 3 8 0 0 0


Expenditures 4 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



($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.



City of Douglas (continued) Pr. 17–9


Journal Entries (continued)


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


(7) Expenditures ($18,000 + $80,000 – $12,000) 8 6 0 0 0

Inventory of Supplies 8 6 0 0 0To record cost of supplies used during the year.fcccccfefcccfccvcxreredfrsswfrfs

Fund Balance Reserved for Inventory of Supplies

($18,000 – $12,000) 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


($9,200 – $4,000) 5 2 0 0


uncollectible amounts from the current classification,

and to restore unneeded allowance to fund balance.



City of Douglas (concluded) Pr. 17–9





($518,000 – $292,000) 2 2 6 0 0 0

Encumbrances 2 2 6 0 0 0





Estimated Revenues 4 0 0 0 0 0

Estimated Other Financing Sources 2 0 0 0 0 0


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



To close Revenues, Other Financing Sources,

Expenditures, and Other Financing Uses ledger

accounts.


chapter 17, modern advanced accounting-review q & exr

Documents

fund balance

medium journal entries

preparation of closing

end of fiscal year

preclosing trial balance

general fundthe title

current fiscal year

government entities