Homework answers / question archive / Chapter 4 – Homework    When equipment was purchased with General Fund resources, which of the following accounts would have been debited in the General Fund?   Goods for which the purchase order had been placed at an estimated cost of $1,600 were received at an actual cost of $1,550

Chapter 4 – Homework    When equipment was purchased with General Fund resources, which of the following accounts would have been debited in the General Fund?   Goods for which the purchase order had been placed at an estimated cost of $1,600 were received at an actual cost of $1,550

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Chapter 4 – Homework

 

1.  When equipment was purchased with General Fund resources, which of the following accounts would have been debited in the General Fund?

 

2. Goods for which the purchase order had been placed at an estimated cost of $1,600 were received at an actual cost of $1,550.  The journal entry in the General Fund to record the receipt of the goods will include a:

 

 

3. Which of the following terms would be reported as General Revenue on the government-wide statement of activities?

 

 

4. Garden City has calculated that General Fund property tax revenues of $4,608,000 are required for the current fiscal year.  Over the past several years, the city has collected 96% of all property taxes levied.  The city levied property taxes in the amount that will generate the required $4,608,000.  Which of the following general journal entries would correctly record the property tax levy?

 

5. Carroll City levies $200,000 of property taxes for its current fiscal year.  One percent of the tax levy is expected to be uncollectible.  The city collects $170,000 of its taxes during the year and another $25,000 during the first two months of the following year.  In addition, the city collected $3,000 of prior year taxes during the first two months of the current fiscal year and another $2,000 during the remainder of the current fiscal year.  What amount of property tax revenues should the city report in the general fund financial statements for the current fiscal year?

 

6. Carroll City levies $200,000 of property taxes for its current fiscal year.  One percent of the tax levy is expected to be uncollectible.  The city collects $170,000 of its taxes during the year and another $25,000 during the first two months of the following year.  In addition, the city collected $3,000 of prior year taxes during the first two months of the current fiscal year and another $2,000 during the remainder of the current fiscal year.  What amount of property tax revenues should the city report in the government-wide financial statements for the current fiscal year?

 

 

7. The village of Frederick borrowed $1,000,000 from a local bank by issuing 4% tax anticipation notes.  If the village repaid the tax anticipation notes six months later after collecting its next installment of property taxes, the general fund journal entry to record the repayment will include:

 

8. Which of the following transactions is reported on the government-wide financial statements?

 

9. Carlon Township was approved for a grant from the federal government.  The grant provides for reimbursement up to $200,000 for expenditures incurred to weatherize homes for low-income persons.  Upon notification that the grant had been approved, but before weatherization activities have begun, Clarion Township should:

 

10. The City of Marshfield uses the purchase method for recording its inventory of supplies in the General Fund.  Rather than using a perpetual inventory system, inventories are updated at year-end based on a physical count.  Physical inventories were $112,000 and $128,000 at December 31, 2016 and 2017, respectively.  The adjusting journal entry on December 31, 2017, will include a:

 

11. During the fiscal year 2017, the City of Hickory Hills issued purchase orders to various vendors in the amounts shown for the following functions of the city:

 

General Government $164,200

Public Safety               302,000

Public Works               224,400

Culture Recreation      181,700

Health & Welfare        168,100

Miscellaneous              24,600

Total                            $1,065,000

 

All goods ordered during the year were received at the following actual costs:

 

                                    General Government               $159,800

                                    Public safety                           301,700

                                    Public works                           226,800

                                    Culture & Recreation              181,700

                                    Health & Welfare                    171,300

                                    Miscellaneous                          25,600

                                    Total                                        $1,066,900

 

Required – Prepared journal entries in the General Fund general journal to record the issuance of purchase order and to record the receipt of and payment for goods during fiscal year 2017.  Also show subsidiary detail for the Encumbrances and Expenditures ledgers.  (if no entry is required for a transaction/event, select “No journal entry required” in the first account field)

 

1. Record the issuance of purchase order

 

 

2. Record the receipt of goods

 

3. Record the expenditures

 

4. Record the payment for goods

 

 

 

 

c. Does the fact that the actual cost of goods received during the year exceeded the estimated cost when ordered suggest a budgetary or management problem?

 

 

12. The City of Troy collects its annual property taxes late in its fiscal year. Consequently, each year it must finance part of its operating budget using tax anticipation notes. The notes are repaid upon collection of property taxes. On April 1, 2017, the city estimated that it will require $2,500,000 to finance governmental activities for the remainder of the 2017 fiscal year. On that date, it had $770,000 of cash on hand and $830,000 of current liabilities. Collections for the remainder of FY 2017 from revenues other than current property taxes and from delinquent property taxes, including interest and penalties, were estimated at $1,100,000.

 

Required:

1. Calculate the estimated amount of tax anticipation financing that will be required for the remainder of FY 2017.

 

2. Assume that on April 2, 2017, the City of Troy borrowed the amount calculated in part a by signing tax anticipation notes bearing 6% per annum to a local bank.  Record the issuance of the tax anticipation notes in the general journals of the General Fund and governmental activities at the government-wide level. (if no entry is required for a transaction/event, select NO Journal entry required” in the first acct field)

 

 

3. By October 1, 2017, the city had collected a sufficient amount of current property taxes to repay the tax anticipation notes with interest.  Prepare the general journals of the General Fund and governmental activities at the government-wide level (if no entry is required for a transaction/event, select NO Journal entry required” in the first acct field)

 

13. At the end of fiscal year 2017, the City of Columbus’s General Fund pre-adjusting trial balance showed the following balances for operating and budgetary accounts and fund balance accounts.

 

Debit               Credit

Appropriations                                                                                    6,224,000

Estimated Other Financing Uses                                                        2,776,000

Estimated Revenues                                                   7,997,000

Encumbrances                                                                         0

Expenditures                                                               6,192,000

Other financing Uses                                                  2,770,000

Revenues                                                                                             7,980,000

Budgetary Fund Balance                                            1,003,000

Fund Balance – Nonspendable – Inventory of                                   140,000

Supplies                                                                                  

Fund-Balance Unsassigned                                                    1,990,000

 

The City of Columbus uses the purchases method of accounting for its inventory of supplies in the General Fund.  The city uses a periodic inventory system in which the amount of inventory used during the year and the amount on hand at the end of the year are determined by a physical inventory.  During the year, $220,000 of supplies were purchased and recorded as expenditures.  These purchases are included in the final expenditures balance of $6,192,000 shown above.  The physical inventory revealed a supplies balance of $152,000 at the end of fiscal year 2017, an increase of $12,000 from the prior year.

 

Required.

1. Provide the required adjusting journal entry in the General Fund at the end of 2017.  (if no entry is required for a transaction/event, select NO Journal entry required” in the first acct field)

 

 

2. Provide the required journal entries in the General Fund general journal to close the operating statement and budgetary accounts at the end of 2017.  (if no entry is required for a transaction/event, select NO Journal entry required” in the first acct field)

 

1. Record the entry to close the budgetary accounts

 

2. Record the entry to close the operating statement items

 

 

14. The city of Waterville applied for a grant from the state government to build a pedestrian bridge over the river inside the city’s park.  On May 1, 2017, the city was notified that it had been awarded a grant of up to $200,000 for the project.  The state will provide reimbursement for allowable expenditures.  On May 5 the special revenue fund entered into a short-term loan with the General Fund for $200,000 so it could start bridge construction.  During FY2017 the special revenue fund expended $165,000 for allowable bridge construction costs, for which it submitted documentation to the state.  Reimbursement was received from the state on December 13, 2017.

 

Required

For the special revenue fund, provide the appropriate journal entries, if any, that would be made for the following.  (Assume the city has a fiscal year end of December 31)

 

1. May 1, 2017, notification of grant approval
2. May 5, 2017, loan from General Fund
3. During FY 2017, bridge expenditures and submission of reimbursement documentation
4. December 13, 2017, receipt of the grant reimbursement funds
5. December 31, 2017, adjusting and closing entries

 

1. Record the notification of grant approval on May 1, 2017

 

 

2. Record the loan from the General Fund on May 5, 2017

 

3. Record the expenditure using Vouchers Payable

 

 

4. Record the revenue due from state government

 

5. December 13, 2017, receipt of the grant reimbursement funds

 

6. December 31, 2017, adjusting and closing entries

 

 

15. The following transactions affected various funds and activities of the Town of Big Springs

 

Required

3.  Prepare the journal entries for the funds and activities. (if no entry is required for a transaction/event, select NO Journal entry required” in the first acct field)

 

Transaction                Fund               General Journal                    Debit               Credit

1. The fire department, a governmental activity accounted for within the General Fund, purchased $100,000 of water from the Water Utility Fund, and enterprise fund.

 

 

2. The General Fund made a long-term loan in the amount of $50,000 to the Central Stores Fund, an internal service fund that services town departments.

 

 

3.  The General Fund paid its annual contribution of $100,000 to the debt service fund for interest and principal on general obligation bonds due during the year.

 

4. The $5,000 balance in the capital projects fund at the completion of construction of a new Town Hall was transferred to the General Fund.

 

 

5. A special revenue fund was awarded a $250,000 reimbursement grant.  The General fund advances $50,000 to the special revenue fund to cover initial costs associated with the grant’s purpose.  Assume loan is repaid during the current year.

16. The city of Hinton’s General Fund had the following post-closing trial balance at April 30, 2016, the end of its fiscal year:

 

Debit               Credit

Cash                                                                                        $97,000

Taxes Receivable – Delinquent                                               583,000

Allowance for uncollectible delinquent taxes                                                 189,000

Interest and penalties receivable                                             26,280

Allowance for uncollectible interest and penalties                                         11,160

Inventory of supplies                                                              16,100

Vouchers payable                                                                                            148,500

Due to federal government                                                                             59,490

            Fund balance nonspendable – inventory                                            16,100

                        Supplies                                                           ________        298,130

Fund balance – unassigned                                                     $722,380         $722,380

 

1. Record the effect of the following transactions on the General Fund and governmental activities for the year ended April 30, 2017.(if no entry is required for a transaction/event, select NO Journal entry required” in the first acct field)

 

Transaction                Fund               General Journal                    Debit               Credit

1. The budget for FY2017 provided for General Fund estimated revenues totaling $3,140,000 and appropriations totaling $3,100,000

 

2. The city council authorized temporary borrowing of $500,000 in the form of a 120-day tax anticipation note.  The loan was obtained from a local bank at a discount of 6% per annum (debit Expenditures for the discount in the General Fund journal and Expenses – General Government in the government activities journal.

 

3. The property tax levy for FY2017 was recorded.  Net assessed valuation of taxable property for the year was $43,000,000 and the tax rate was $5 per $100.  It was estimated that 3% of the levy would be uncollectible.

 

4. Purchase orders and contracts were issued to vendors and others in the amount of $2.060.000.

 

5. The county Board of Review discovered unassessed properties with a total taxable value of $500,000.  The owners of these properties were charged with taxes at the city’s General Fund rate of $5 per $100 assessed value.  (You need not adjust the Allowance for Uncollectible Current Taxes account).
6. $1,961,000 of current taxes, $383,270 of delinquent taxes, and $20,570 of interest and penalties were collected.

 

7. Additional interest and penalties on delinquent taxes were accrued in the amount of $38,430, of which 30% was estimated to be uncollectible.

 

8. Because of a change in state law, the city was notified that it will receive $80,000 less in intergovernmental revenues than was budgeted

 

9. Total payroll during the year was $819,490.  Of that amount, $62,690 was withheld for employee’s FICA tax liability, $103,170 for employee federal income tax liability, and $34,400 for state taxes;  the balance was paid to employees in cash
10. The employer’s FICA tax liability was recorded for $62,690

 

11. Revenues from sources other than taxes were collected in the amount of $947,000

 

12. Amounts due to the federal government as of April 30, 2017, and amounts due for FICA taxes, and state and federal withholding taxes during the year were vouchered.

 

13. Purchase orders and contracts encumbered in the amount of $1,988,040 were filled at a net cost of $1,97,570, which was vouchered

 

1. General Fund        Record the encumbrances outstanding for 2017
2. Governmental Activities   Record the total expenses against vouchers payable for 2017

 

14. Vouchers payable totaling $2,301,660 were paid after deducting a credit for purchases discount of $8,030 (credit Expenditures in the General Fund)
15. The tax anticipation note of $500,000 was repaid

 

16. All unpaid current year’s property taxes became delinquent.  The balances of the current tax receivables and related uncollectibles were transferred to delinquent accounts.

 

1. General Fund        Record the delinquent amount of unpaid property taxes

 

2. Governmental Activities   Record the delinquent amount of unpaid property taxes

 

17. A physical inventory of materials and supplies at April 30, 2017, showed a total of $19,100, Inventory is recorded using the purchases method in the General Fund; the consumption method is used at the government-wide level.  (Note. A period inventory system is used both in method in the General Fund and the government-wide level.  When inventory was purchased during the year, Expenditures were debited in the General Fund journal and expenses were debited in the governmental activities journal)

 

 

B.  Record in general journal form entries to close the budgetary and operating statement accounts in the General Fund only.  .(if no entry is required for a transaction/event, select NO Journal entry required” in the first acct field)

 

Transaction                Fund               General Journal                    Debit               Credit

1. Record the closure of budgetary statement account

 

2.  Record the closure of operating statements account

3. Prepare a general fund balance sheet as of April 30, 2017.

 

4. Prepare a statement of revenues, expenditures, and changes in fund balance for the year ended April 30, 2017.  Do not prepare the government-wide financial statements