Chapter 4 Recording Operating Transactions Affecting the General Fund and Governmental Activities at the Government-wide Level

 

Presented below are a number of transactions for the City of Smithville that occurred during the fiscal year for which the budget given in Chapter 3 was recorded, the calendar year 2014. Read all instructions carefully.

 

a. After opening the data file containing your data from Chapters 2 and 3 of this project, record the following transactions in the general journal for the General Fund and, if applicable, in the general journal for governmental activities at the government-wide level. For all entries, the date selected should be year 2014. For each of the paragraphs that requires entries in both the General Fund and governmental activities journals, you can either record them in both journals on a paragraph-by-paragraph basis or, alternatively, record all the General Fund journal entries first for all paragraphs, then complete the governmental activities journal entries for all paragraphs next. If you choose the latter method, it might be useful to print the General Fund general journal entries from the Reports menu to assist in making the entries in the governmental activities journal. Regardless of the method you choose, we recommend that you refer to the illustrative journal entries in Chapter 4 of the Reck, Lowensohn, and Wilson textbook (16h edition) for guidance in making all entries.

 

For each entry affecting budgetary accounts or operating statement accounts, the Detail Journal will automatically open, as was the case in Chapter 3, to record the appropriate amounts in the detail budgetary or actual accounts.

 

Please remember that before closing the City of Smithville, you must click on [File], and [Save/Save As] to save your work. Your work is NOT automatically saved.

 

1. [Para. 4-a-1] On January 2, 2014, real property taxes were levied for the year in the amount of $1,697,000. It was estimated that 3 percent of the levy would be uncollectible.

 

Required: Record this transaction in both the General Fund and governmental activities journal. (Note: Type 4-a-1 as the paragraph number in the [Transaction Description] box for this entry; 4-a-2 for the next transaction, etc. Careful referencing by paragraph number is very helpful should you need to determine where you may have omitted a required journal entry or made an error.) (Select “Accrued Revenue” in the drop down [Transaction Description] menu in the Detail Journal related to the General Fund entry.)

 

2. [Para. 4-a-2] Encumbrances were recorded in the following amounts for purchase orders issued against the appropriations indicated:

 

General Government $ 98,453

Public Safety 185,259

Public Works 247,675

Health and Welfare 173,469

Culture and Recreation 108,927

Miscellaneous 41,563

Total $855,346

 

Required: Record the encumbrances in the General Fund general journal and Detail Journal as appropriate. In the Detail Journal, select “Purchase Orders” from the drop down [Transaction Description] menu. You can also type in an alternative description, if desired.

 

3. [Para. 4-a-3] Cash was received during the year in the total amount of $5,821,280 for collections from the following receivables and cash revenues, as indicated:

 

Current Property Taxes $1,546,800

Delinquent Property Taxes 360,000

Interest and Penalties Receivable on Taxes 34,270

Due from State Government 500,000

Revenues: (total: $3,380,210)

Sales Taxes 1,886,860

Licenses and Permits 583,800

Fines and Forfeits 423,360

Intergovernmental 168,000

Charges for Services 225,070

Miscellaneous 93,120

Total $5,821,280

 

Required: Record the receipt of cash and the related credits to receivables and revenues accounts, as applicable, in both the General Fund and governmental activities journals. (Select “Received in Cash” in the drop down [Transaction Description] menu in the Detail Journal related to the General Fund revenue entries.)

 

For purposes of the governmental activities entries at the government-wide level assume the following classifications:

 

General Fund   Governmental Activities                      

Sales Taxes General Revenues—Taxes—Sales

Licenses and Permits Program Revenues—General Government—

Charges for Services

Fines and Forfeits Program Revenues—General Government—

Charges for Services

 

Intergovernmental Program Revenues—Public Safety—Operating

Grants and Contributions

Charges for Services Program Revenues—General Government—

Charges for Services, $140,100

Program Revenues—Culture and Recreation—

Charges for Services, $84,970

Miscellaneous General Revenues—Miscellaneous

 

4. [Para. 4-a-4] Additional interest and penalties were accrued on delinquent property taxes in the amount of $2,836, of which 10 percent was estimated to be uncollectible. (Note: Round the estimated uncollectible to the nearest whole dollar.)

 

Required: Record this accrual in both the General Fund and governmental activities general journals.

 

5. [Para. 4-a-5] General Fund payrolls for the year totaled $3,822,600. Of that amount, $472,040 was withheld for employees’ federal income taxes; $291,740 for employees’ share of FICA taxes; $171,610 for employees’ state income taxes; and the remaining $2,887,210 was paid to employees in cash. The City of Smithville does not record encumbrances for payrolls. The payrolls were chargeable against the following functions’ appropriations:

 

General Government $ 476,376

Public Safety 2,013,110

Public Works 612,881

Health and Welfare 397,673

Culture and Recreation 322,560

Total $3,822,600

 

Required: Make summary journal entries for payroll in both the General Fund and governmental activities general journals for the year.

 

6. [Para. 4-a-6] The city’s share of FICA taxes, $291,740, and the city’s contribution of $195,380 to retirement funds administered by the state government were recorded as liabilities.

 

Required: Record this transaction in both the General Fund and governmental activities general journals. Assume that the total $487,120 should be allocated in the same proportions as in paragraph 4-a-5 above; that is:

 

General Government: ($476,376/$3,822,600) x $487,120 = $60,705

Public Safety: ($2,013,110/$3,822,600) x $487,120 = $256,534

Public Works: ($612,881/$3,822,600) x $487,120 = $78,101

Health and Welfare: ($397,673/$3,822,600) x $487,120 = $50,676

Culture and Recreation: ($322,560/$3,822,600) x $487,120 = $41,104

(Note: The allocated amount for Public Works was rounded up one dollar to compensate for rounding error.)

 

7. [Para. 4-a-7] Invoices for some of the goods recorded as encumbrances in transaction 4-a-2 were received and vouchered for later payment, as listed below. Related encumbrances were canceled in the amounts shown (Select “Elimination” in the drop down [Transaction Description] menu in the Detail Journal):

 

Expenditures Encumbrances

General Government $ 93,838 $ 94,752

Public Safety 173,669 173,356

Public Works 190,596 190,512

Health and Welfare 176,400 173,124

Culture and Recreation 109,280 108,927

Miscellaneous 41,160 41,563

$784,943 $782,234

 

Required: Record the receipt of these goods and the related vouchers payable in both the General Fund and governmental activities journals. At the government-wide level, you should assume the city uses the periodic inventory method. Thus, the invoiced amounts above should be recorded as expenses of the appropriate functions, except that $27,800 of the amount charged to the Public Works function was for a vehicle (debit Equipment for this item at the government-wide level). Expenditures charged to the miscellaneous appropriation should be recorded in this case as General Government expenses at the government-wide level.

 

8. [Para. 4-a-8] During FY 2014, the City of Smithville received notification that the state government would remit $165,000 to it early in the next fiscal year, although this amount is intended to finance certain public safety operations of the current year. This amount had been anticipated and was included in the budget for the current year as “Intergovernmental Revenue.”

 

Required: Record this transaction as a receivable and revenue in the General Fund and governmental activities journals. (Note: Select “Accrued Revenue” in the [Transaction Description] box in the Detail Journal). At the government-wide level, assume that this item is an operating grant to the Public Safety function.

 

9. [Para. 4-a-9] Checks were written in the total amount of $2,809,090 during 2014. These checks were in payment of the following items:

 

Vouchers Payable $ 995,600

Tax Anticipation Notes Payable 375,000 (see Chapter 2)

Expenditures (Interest on tax 8,400

anticipation notes)

Due to Federal Government 1,068,400

Due to State Government 361,690

Total amount paid $2,809,090

 

(Note: Interest expenditures on tax anticipation notes were budgeted in the Miscellaneous category. Record them as a General Government expense at the government-wide level.)

 

Required: Record the payment of these items in both the General Fund and governmental activities general journals.

 

10. [Para. 4-a-10] Current taxes receivable uncollected at year-end, and the related Estimated Uncollectible Current Taxes account, were both reclassified as delinquent.

 

Required: Record these reclassifications in the General Fund and governmental activities journals.

 

11. [Para. 4-a-11] The city’s budget for 2014 was legally amended as follows:

 

Estimated Revenues:

Decreases Increases

Licenses and permits $ 5,000

Intergovernmental $ 5,000

Charges for Services 5,000

Miscellaneous 10,000

Total $10,000 $15,000

 

Appropriations:

General Government $22,000

Public Safety 3,500

Public Works 15,000

Health and Welfare 5,500

Culture and Recreation $8,000 $8,000 $46,000

 

Note: These amendments decrease the balance of the Budgetary Fund Balance account by $33,000.

Required: Record the budget amendments in the General Fund general journal only. Budgetary items do not affect the government-wide accounting records. (Note: Select “Budget Amendment” in the [Transaction Description] box in the Detail Journal.)

 

12. [Para. 4-a-12] Interest and penalties receivable on delinquent taxes was increased by $11,000; $3,500 of this was estimated as uncollectible.

 

Required: Record this transaction in the General Fund and governmental activities journals.

 

13. [Para. 4-a-13] Services received by the General Government function of the General Fund from the Solid Waste Disposal Fund amounted to $16,500 during the year. Of this amount, $10,100 was paid in cash and $6,400 remained unpaid at year-end.

 

Required: Record the receipt of these services, amounts paid during the year, and remaining liability in the General Fund and governmental activities journals. At the government-wide level the liability should be credited to Internal Payables to Business-type Activities. Do not record these items in the Solid Waste Disposal Fund until instructed to do so in Chapter 7 of this case.

 

14. [Para. 4-a-14] Delinquent taxes receivable in the amount of $17,150 were written off as uncollectible. Interest and penalties already recorded as receivable on these taxes, amounting to $8,820, were also written off. Additional interest on these taxes that had legally accrued was not recorded since it was deemed uncollectible in its entirety.

 

Required: Record this transaction in the General Fund and governmental activities journals.

 

15. [Para. 4-a-15] It was discovered that goods in the amount of $12,000 had been recorded in error as an expenditure against the General Government appropriation of the General Fund. These goods should have been charged to the Solid Waste Disposal Fund, an enterprise fund and a business-type activity at the government-wide level. This item had also been charged as an expense of the General Government function at the government-wide level. An interfund invoice was prepared to reduce expenditures of the General Fund for the $12,000 and recognize an interfund receivable. This item will be recognized later in Chapter 7 of this case as an expense of the Solid Waste Disposal Fund.

 

Required: Record this reimbursement transaction in the General Fund and governmental activities journals, debiting Due from Other Funds in the General Fund and Internal Receivables from Business-type Activities at the government-wide level. Do not make any entries in the Solid Waste Disposal Fund at this time. (Note: Select “Goods Received” in the [Transaction Description] box in the Detail Journal).

 

16. [4-a-16] In December 2014, the General Fund made a short-term loan of $20,000 to the Street Improvement Bond Debt Service Fund to assist with payment of an interest payment due on January 1, 2015.

 

Required: Record this transaction in the General Fund only. The transaction has no effect at the government-wide level since it occurs between two governmental activities.

 

17. [4-a-17] Adjusting Entry. A physical count of consumable supplies at year-end showed an ending balance of $66,000, an increase of $6,000 during the year. The city uses the purchases method of accounting for its inventory in the General Fund and the consumption method at the government-wide level. Since the city uses a periodic inventory system, both at the fund and governmental levels, it records all purchases of inventory as expenditures in the General Fund and as expenses at the government-wide level. These were included as part of the amounts recorded in paragraph 4-a-7. Adjustments to the expenses accounts should be made to the Public Works function, where most supplies are used.

 

Required: Prepare the adjusting journal entries in the General Fund journal to adjust the Inventory of Supplies and Fund Balance—Nonspendable—Inventory of Supplies accounts to the correct balances and the governmental activities journal to adjust the Expenses—Public Works and Inventory of Supplies accounts.

 

Post all journal entries to the general and subsidiary ledgers: After reviewing all entries for accuracy, including year and paragraph numbers, post all entries to the general ledger accounts and to all subsidiary ledger accounts, by clicking on [Post Entries]. Also post all entries in the governmental activities journal.

 

18. Closing Entry. Following the instructions in the next paragraph, prepare and post the necessary entries to close the Estimated Revenues and Appropriations accounts to Budgetary Fund Balance, and Revenues and Expenditures to Fund Balance—Unassigned. Because the City of Smithville honors all outstanding encumbrances at year-end, it is not necessary to close Encumbrances to Encumbrances Outstanding at year-end since encumbrances do not affect the General Fund balance sheet or statement of revenues, expenditures, and changes in fund balances. If, however, you would like to avoid having these accounts appear in the post-closing trial balance, you can opt to close Encumbrances to Encumbrances Outstanding. If the accounts are closed, they would need to be reestablished at the beginning of the next year, although entries are not required in this problem for the next year.

 

To close the temporary accounts, you must click on the check mark for [Closing Entry], “Closing Entry” will appear in the [Transaction Description] box. Be sure the check mark in the box for [Closing Entry] is showing before closing each individual account. Also, you will be sent to the Detail Journal where you must close each individual budgetary or operating statement account. To determine the closing amounts for both General Ledger and subsidiary ledger accounts, you should first print the pre-closing version of these ledgers for year 2014 from the [Reports] menu.

 

At year-end, an analysis by the city’s finance department determined the following constraints on resources in the General Fund. Prepare the appropriate journal entry in the General Fund to reclassify amounts between Fund Balance—Unassigned and the fund balance accounts corresponding to the constraints shown below. (Note: You should consider the beginning of year balances in fund balance accounts in calculating the amounts to be reclassified.)

 

Account Amount

Fund Balance—Restricted— $15,000

Public Safety

Fund Balance—Committed— 29,700

Public Works

Fund Balance—Assigned— 56,800

Culture and Recreation

 

 

Note: DO NOT PREPARE CLOSING ENTRIES FOR GOVERNMENTAL ACTIVITIES AT THIS TIME since governmental activities will not be closed until Chapter 9, after the capital projects fund (Chapter 5) and debt service fund (Chapter 6) transactions affecting governmental activities at the government-wide level have been recorded.

 

b. Select “Export” from the drop down [File] menu to create an Excel worksheet of the General Fund post-closing trial balance as of December 31, 2014. Use Excel to prepare in good form a balance sheet for the General Fund as of December 31, 2014. Follow the format shown in Illustration 4-3 of Reck, Lowensohn, and Wilson, Accounting for Governmental and Nonprofit Entities, 16th edition textbook (hereafter referred to as “the textbook”). Alternatively, you can click on [Reports] to print the post-closing trial balance and use the printed copy to manually prepare a balance sheet.

 

c. Select “Export” from the drop down [File] menu to create an Excel worksheet of the General Fund pre-closing subsidiary ledger account balances for the year 2014. Use Excel to prepare in good form a statement of revenues, expenditures, and changes in fund balance for the General Fund for the year ended December 31, 2014. (See Illustration 4-4 in the textbook for an example format.)

 

d. Use the Excel worksheet of the General Fund pre-closing subsidiary ledger account balances created in part c above to prepare in good form a schedule of revenues, expenditures, and changes in fund balance—budget and actual for the General Fund for the year ended December 31, 2014. (See Illustration 4-5 in the textbook for an example format.)

 

e. Prepare a reconciliation of total expenditures reported in your solution to part c of this problem with the total expenditures and encumbrances reported in your solution to part d of this problem. (In Chapter 4 below Illustration 4-5, see discussion and example which compares Illustrations 4-4 and 4-5.)

 

[Note: File the printouts of all your exported or printed documents and your completed financial statements in your cumulative problem folder until directed by your instructor to submit them, unless your instructor specifies submission of computer files via e-mail.]

 

Before closing the City of Smithville, click on [File], and [Save/Save As] to save your work. Your work is NOT automatically saved.

Chapter 5 Recording Capital Asset Transactions

 

Street Improvement Capital Projects Fund and Governmental Activities at the Government-wide Level

 

During late 2013, the voters of the City of Smithville authorized tax-supported bond issues totaling $10,000,000 as partial financing for a series of projects to construct streets, curbs, culverts, and storm sewers in various parts of the city. The estimated total cost of the series of projects, which are expected to extend over the next three years, was $11,200,000. In addition to the bond financing, voters also approved a special ½ cent sales tax to assist in financing the projects. The sales tax begins January 1, 2014 and will continue for three years. The sales tax is projected to generate $400,000 each year.

 

Required

 

a. Open a general journal for the Street Improvement Fund by recording the transactions listed under paragraph b below, as necessary. Use account titles listed under the drop-down [Account (# – Description)] menu. Select 2014 for each transaction in the [Year] box of the [Journal] view. Enter the paragraph reference, i.e. 5-b-[1, 2, 3, etc], in the [Transaction Description] box. The following account titles should appear in the [Accounts] view:

 

Cash

Investments

Taxes Receivable—Sales

Interest Receivable on Investments

Vouchers Payable

Judgments Payable

Contracts Payable

Contracts Payable—Retained Percentage

Fund Balance—Restricted

Encumbrances Outstanding—Elm Street Project

Encumbrances Outstanding—Spruce Street Project

Revenues

Other Financing Sources—Proceeds of Bonds

Construction Expenditures—Elm Street Project

Construction Expenditures—Spruce Street Project

Interest Expenditures—Spruce Street Project

Other Financing Uses—Interfund Transfers Out

Encumbrances—Elm Street Project

Encumbrances—Spruce Street Project

 

Please remember that before closing the City of Smithville, you must click on [File], and [Save/Save As] to save your work. Your work is NOT automatically saved.

 

b. Record journal entries in the general journal of the Street Improvement Fund, as appropriate, for each of the following transactions. Remember to enter the correct year and paragraph numbers. Do not record entries at this time in other affected funds; those entries will be made in the later chapters of this cumulative problem that cover the affected funds. You should, however, make all required entries in the governmental activities general journal at the government-wide level.

 

1. [Para. 5-b-1] In early 2014, design plans and specifications for the first project, the “Elm Street Project,” were submitted by a construction engineering firm. The firm billed the Street Improvement Fund for $40,000.

 

Required: Record this billing and the related Vouchers Payable liability in the Street Improvement Fund and governmental activities journals. (Note: this transaction was not encumbered.)

 

2. [Para. 5-b-2] On March 1, 2014, the city signed a $50,000, 90-day tax anticipation note bearing interest of 3 percent per annum.

 

Required: Record this transaction in the Street Improvement Fund and governmental activities journals.

 

3. [Para. 5-b-3] A $290 purchase order for advertisements soliciting bids for the Elm Street Project was issued during March 2014. The bill for advertising in the amount of $300 was received and a voucher for payment was issued.

 

Required: Record the encumbrance, billing, and the Vouchers Payable liability in the Street Improvement Fund and governmental activities journals, as appropriate.

 

4. [Para. 5-b-4] Sales tax revenue of $105,000 was received from the state government and recorded for the first quarter of 2014.

 

Required: Record this transaction in both the Street Improvement Fund and governmental activities general journals.

 

5. [Para. 5-b-5] Vouchers payable accumulated to date were paid on April 10, 2014.

 

Required: Record this transaction in both the Street Improvement Fund and governmental activities general journals.

 

6. [Para. 5-b-6] On April 15, 2014, construction bids were opened and analyzed. A bid of $2,000,000 was accepted, and the contract was awarded for the Elm Street Project. The contract provided for a retained percentage of 4 percent from each progress payment, and from the final payment, until final inspection and acceptance by the city’s public works inspectors.

 

Required: Record the signing of the contract in the Street Improvement Fund general journal. This transaction has no effect at the government-wide level.

 

7. [Para. 5-b-7] On May 6, 2014, 4% deferred serial bonds with a face value of $2,000,000 were sold for a total amount of $2,068,000, of which $28,000 was for accrued interest from the January 1, 2014, date of the bonds and $40,000 was a premium on the bonds sold. Cash in the amount of the accrued interest and premium was deposited directly in the Street Improvement Bond Debt Service Fund. Cash in the amount of $2,000,000 was deposited and recorded in the Street Improvement Fund. The city invested $1,000,000 of the bond proceeds in certificates of deposit maturing in six months and earning 3% per annum.

 

Required: Record these transactions in the Street Improvement Fund and governmental activities journals. (Hint: In addition to recording the liability for bonds payable in the governmental activities journal, you should record the premium on the bonds payable [credit Premium on 4% Deferred Serial Bonds] and accrued interest on bonds sold [we recommend that you credit Expense—Interest on Long-term Debt] in the governmental activities general journal for the $28,000 of accrued interest.) For now you should ignore the entries in the Street Improvement Bond Debt Service Fund to record the accrued interest and premium. Those entries will be made in Chapter 6 of this cumulative problem.

 

8. [Para. 5-b-8] The city repaid the $50,000 tax anticipation note plus interest of $375 ($50,000 X .03 X 90/360) (See transaction 2).

 

Required: Record this transaction in both the Street Improvement Fund and governmental activities general journals. The $375 of interest should be debited to Interest Expenditures in the Street Improvement Fund journal and to Expenses—General Government in the governmental activities journal.

 

9. [Para. 5-b-9] In July 2014, the contractor for the Elm Street Project reported that the project was one-half completed and requested a progress payment of $1,000,000. This amount was paid in late July, less the contractual retention of 4 percent.

 

Required: Record this transaction in both the Street Improvement Fund and governmental activities general journals.

 

10. [Para. 5-b-10] Construction engineers engaged by the city submitted design plans and specifications for the second street improvement project, the “Spruce Street Project.” Vouchers were approved in the amount of $30,000 in payment for the engineering services.

 

Required: Record this transaction in both the Street Improvement Fund and governmental activities journals. (Note: This transaction was not encumbered.)

 

11. [Para. 5-b-11] During August 2014, the city issued a purchase order in the amount of $350 for advertisements soliciting construction bids for the Spruce Street Project. Later in the month, a bill was received in the amount of $340 for the advertisements and a voucher was approved for payment.

 

Required: Record these transactions in both the Street Improvement Fund and governmental activities journals, as applicable.

 

12. [Para. 5-b-12] Two property owners along Elm Street claimed a new sidewalk was constructed further from the street than where they had granted easements. A resurvey confirmed that the sidewalk was constructed in the wrong place, but the city did not believe that the property owners were entitled to damages. The property owners sued the city in court and were awarded a total of $9,000, which was recorded as a judgment liability during October 2014. The amount will be borne by the Street Improvement Fund; it will not be recoverable from the contractor.

 

Required: Record this transaction in both the Street Improvement Fund and governmental activities journals. You should debit Construction Expenditures in the Street Improvement Fund and Construction in Progress at the government-wide level.

 

13. [Para. 5-b-13] Construction bids for the Spruce Street Project were opened and evaluated. A bid in the amount of $1,500,000 was accepted, and the contract, bearing a 4 percent retention clause was signed in October 2014.

 

Required: Record this transaction in the Street Improvement Fund.

 

14. [Para. 5-b-14] In November 2014, the 3% certificates of deposit matured; the face amount of $1,000,000 plus interest of $15,000 was collected. The interest is considered revenue of the Street Improvement Fund.

 

Required: Record this transaction in both the Street Improvement Fund and governmental activities journals.

 

15. [Para. 5-b-15] All outstanding vouchers were paid. In addition, the judgment payable (see Transaction 12) and interest thereon of $90 were paid on the same date. The interest is to be borne by the Street Improvement Fund and is not to be capitalized.

 

Required: Record these transactions in both the Street Improvement Fund and governmental activities journals. The $90 interest should be debited to Interest Expenditures in the Street Improvement Fund journal and to Expenses—General Government in the governmental activities journal.

 

16. [Para. 5-b-16] In late November 2014 the Elm Street project was completed and the contractor for the project requested a final payment of $980,000. This amount was recorded as a liability. Payment was made, less the retained percentage, on December 1, 2014.

 

Required: Record this transaction in both the Street Improvement Fund and governmental activities journals.

 

17. [Para. 5-b-17] Additional sales taxes were collected in the amount of $310,000 prior to December 1, 2014. $200,000 of this amount was invested in 3% U.S. Treasury notes at par. No interest was accrued on the notes at date of purchase.

 

Required: Record these transactions in both the Street Improvement Fund and governmental activities journals.

 

18. [Para. 5-b-18] Upon final inspection of the Elm Street Project, the city inspector determined that all work conformed to specifications. Retained percentages (Transactions 9 and 16) were paid to the contractor.

 

Required: Record this transaction in both the Street Improvement Fund and governmental activities journals. Total construction costs for the Elm Street Project should be capitalized in the Infrastructure account in governmental activities.

 

19. [Para. 5-b-19] Based on retail sales estimates from the state Department of Revenue, additional sales taxes were accrued in the amount of $40,000. On December 31, 2014, $500 of interest was accrued on the investment in Treasury notes. Fair market value of these notes was the same as cost on December 31, 2014.

 

Required: Record these transactions in both the Street Improvement Fund and governmental activities journals.

 

20. Verify the accuracy of all your preceding entries in the Street Improvements Fund and governmental activities general journals, then click [Post Entries] of each entity to post the entries to the respective general ledgers. For the Street Improvement Fund only, prepare year-end closing entries for 2014 and post them to the fund’s general ledger. (Note: You must click on the box for [Closing Entry] to check mark it; “Closing Entry” will appear in the [Transaction Description] box for the account being closed. Be sure the check mark is present for each account being closed.) Click [Post Entries] to post the closing entry. Under current GASB standards encumbrances and encumbrances outstanding are not reported in any financial statements. Consequently, there is no need to close these accounts since the Spruce Street Project is still underway at year-end. Closing entries will be made in the governmental activities general journal in Chapter 9 of this cumulative problem. Ignore those entries for now.

 

c. Export the post-closing trial balance for year 2014 to an Excel worksheet and use Excel to prepare a balance sheet for the Street Improvement Fund as of December 31, 2014. (See Illustration 4-3 in the textbook for an example of an appropriate format of a governmental fund balance sheet.). In addition, print the post-closing trial balance from the [Reports] drop-down menu.

 

d. Export the pre-closing trial balance for year 2014 to an Excel worksheet and use Excel to prepare a statement of revenues, expenditures, and changes in fund balance for the Street Improvement Fund for the year ended December 31, 2014. (See Illustration 5-3 in textbook for an example of the format of a capital projects fund statement of revenues, expenditures and changes in fund balance.). Print the pre-closing trial balance from the [Reports] drop-down menu.

 

[Note: Retain all required printouts and your financial statements in your cumulative folder until directed by your instructor to submit them, unless your instructor prefers to have computer files submitted via e-mail.]

 

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