Accounting for Other Governmental Funds

ACCT 621 INSTRUCTORS NOTES WITHOUT HOMEWORK

(12TH EDITION)
CHAPTER 5 Accounting for Other Governmental Fund Types: Capital Projects, Debt
Service, and Permanent
5-1.

THE SOLUTION TO THIS AND THE FIRST EXERCISE OF CHAPTERS 1 THROUGH 8 WILL
DIFFER FROM STUDENT TO STUDENT, ASSUMING EACH HAS A DIFFERENT CAFR.

5.2.

IN DETERMINING THE APPROPRIATE FUND TO RECORD THE TRUST, IT IS IMPORTANT TO

DETERMINE: (1) WHETHER THE TRUST BENEFITS THE GOVERNMENT OR ITS CITIZENRY
OR (2) ALTERNATIVELY WHETHER THE TRUST BENEFITS INDIVIDUALS, PRIVATE
ORGANIZATIONS OR OTHER GOVERNMENTS.
IF THE TRUST BENEFITS INDIVIDUALS, PRIVATE ORGANIZATIONS OR OTHER
GOVERNMENTS, IT SHOULD BE REPORTED IN THE PRIVATE-PURPOSE TRUST FUND, A
FIDUCIARY TYPE FUND.

IF THE TRUST BENEFITS THE GOVERNMENT OR ITS CITIZENRY, IT IS IMPORTANT TO

DETERMINE WHETHER THE TRUST PRINCIPAL MUST BE MAINTAINED OR ALTERNATIVELY,
IF IT CAN BE EXPENDED FOR PURPOSES SUPPORTED BY THE TRUST. IF THE TRUST
PRINCIPAL MUST BE MAINTAINED, THE TRUST SHOULD BE REPORTED IN A PERMANENT
FUND. IF THERE IS NO REQUIREMENT TO MAINTAIN THE PRINCIPAL, IT SHOULD BE
REPORTED IN A SPECIAL REVENUE FUND.

5-3.

AT THE INCEPTION OF THE LEASE, THE PRESENT VALUE OF THE MINIMUM LEASE
PAYMENTS SHOULD BE REPORTED AS A CAPITAL EXPENDITURE AND AN OTHER FINANCING
SOURCE WITHIN AN APPROPRIATE GOVERNMENTAL TYPE FUND (TYPICALLY THE
GENERAL FUND OR A CAPITAL PROJECTS FUND). RENTAL PAYMENTS WOULD TYPICALLY
BE REPORTED AS INTEREST AND PRINCIPAL EXPENDITURES IN THE GENERAL FUND OR A
DEBT SERVICE FUND.
AT FISCAL YEAR END, THE LEASED ASSET SHOULD BE REFLECTED IN THE GOVERNMENTWIDE STATEMENT OF NET POSITION AS A CAPITAL ASSET AT NET BOOK VALUE (I.E. THE
PRESENT VALUE OF THE MINIMUM LEASE PAYMENTS AT THE INCEPTION OF THE LEASE
LESS ACCUMULATED DEPRECIATION). SIMILARLY, THE UNPAID BALANCE OF THE LEASE
OBLIGATION SHOULD BE REPORTED IN THE GOVERNMENT-WIDE STATEMENT OF NET
POSITION AS A LIABILITY.

5-18

Accounting for Other Governmental Funds

5-4 (A)
SPENCER COUNTY
COURTHOUSE ANNEX CAPITAL PROJECTS FUND
GENERAL JOURNAL
CLOSING ENTRY
OTHER FINANCING SOURCES-PROCEEDS OF BONDS
OTHER FINANCING SOURCES-PREMIUM ON BONDS
INTERGOVERNMENTAL REVENUE
CAPITAL EXPENDITURES
OTHER FINANCING USES-TRANSFERS OUT
FUND BALANCE

DEBITS
2,000,000
45,000
400,000

BUDGETARY FUND BALANCE RESERVE FOR ENCUMBRANCES

E NCUMBRANCES

85,000

CREDITS

1,850,000
45,000
550,000
85,000

5-4 (B)
SPENCER COUNTY
COURTHOUSE ANNEX CAPITAL PROJECTS FUND
STATEMENT OF REVENUES, EXPENDITURES, AND
CHANGES IN FUND BALANCE
YEAR ENDED JUNE 30, 2015
REVENUES:
INTERGOVERNMENTAL GRANT

$ 400,000

EXPENDITURES:
CAPITAL OUTLAY

1,850,000

EXCESS (DEFICIENCY) OF REVENUES OVER EXPENDITURES

(1,450,000)

OTHER FINANCING SOURCES (USES)

PROCEEDS OF BONDS
BOND PREMIUM
TRANSFERS OUT

2,000,000
45,000
(45,000)

TOTAL OTHER FINANCING SOURCES (USES)

2,000,000

NET CHANGE IN FUND BALANCE

550,000

FUND BALANCE, JAN. 1, 2015

--0--

FUND BALANCE, DEC. 31, 2015

$ 550,000

5-19

Accounting for Other Governmental Funds

5-4 (C)

CASH

SPENCER COUNTY
COURTHOUSE ANNEX CAPITAL PROJECTS FUND
BALANCE SHEET
AS OF DECEMBER 31, 2015
$ 900,000

DUE FROM STATE GOVERNMENT

200,000

TOTAL ASSETS

$1,100,000

LIABILITIES:
CONTRACT PAYABLE

$ 550,000

FUND BALANCE:
RESTRICTED FOR COURTHOUSE ANNEX
TOTAL LIABILITIES AND FUND BALANCE

550,000
$1,100,000

5-6 (A).
ARMSTRONG COUNTY
COUNTY OFFICE BUILDING CONSTRUCTION FUND
CAPITAL PROJECTS FUND GENERAL JOURNAL
1.
2.
3.

4.

5.

DEBITS
8,500,000

CASH
OTHER FINANCING SOURCESPROCEEDS OF BONDS
ENCUMBRANCES CONTROL

CREDITS
8,500,000

BUDGETARY FUND BALANCE - RESERVE FOR ENCUMBRANCES

BUDGETARY FUND BALANCE - RESERVE FOR ENCUMBRANCES

ENCUMBRANCES CONTROL
CONSTRUCTION EXPENDITURES
CONTRACTS PAYABLE
CONTRACTS PAYABLE
CONTRACTS PAYABLE-RETAINED PERCENTAGE
CASH
BUDGETARY FUND BALANCE - RESERVE FOR ENCUMBRANCES

ENCUMBRANCES CONTROL
CONSTRUCTION EXPENDITURES
CONTRACTS PAYABLE
CONTRACTS PAYABLE
CONTRACTS PAYABLE-RETAINED PERCENTAGE
CASH
CONTRACTS PAYABLE-RETAINED PERCENTAGE

5-20

8,400,000

8,400,000

6,000,000
6,000,000
6,000,000
6,000,000
6,000,000
300,000
5,700,000
2,400,000
2,400,000
2,400,000
2,400,000
2,400,000
120,000
2,280,000
420,000

Accounting for Other Governmental Funds

CONSTRUCTION EXPENDITURES
ACCOUNTS PAYABLE
6A.. ACCOUNTS PAYABLE
CASH
6B. OTHER FINANCING USES-TRANSFERS OUT
CASH
7. OTHER FINANCING SOURCES-PROCEEDS OF BONDS
CONSTRUCTION EXPENDITURES
OTHER FINANCING USES-TRANSFERS OUT

5-21

97,000
517,000
517,000
517,000
3,000
3,000
8,500,000
8,497,000
3,000

Accounting for Other Governmental Funds

5-6 (B).
ARMSTRONG COUNTY
COUNTY OFFICE BUILDING CONSTRUCTION FUND
STATEMENT OF REVENUES, EXPENDITURES, AND
CHANGES IN FUND BALANCE
YEAR ENDED JUNE 30, 2015
REVENUES:

$ --0--

EXPENDITURES:
CAPITAL OUTLAY

8,497,000

EXCESS (DEFICIENCY) OF REVENUES OVER EXPENDITURES

(8,497,000)

OTHER FINANCING SOURCES (USES)

PROCEEDS OF BONDS

8,500,000

TRANSFERS OUT

(3,000)

TOTAL OTHER FINANCING SOURCES (USES)

8,497,000

NET CHANGE IN FUND BALANCE

--0--

FUND BALANCE, JULY 1, 2014

--0--

FUND BALANCE, JUNE 30, 2015

--0--

5-9 (A)
VILLAGE OF BUDEKVILLE
GENERAL JOURNAL
CAPITAL PROJECTS FUND
1.

CASH
OTHER FINANCING SOURCES-PROCEEDS OF BONDS

2.

NO ENTRY IN CAPITAL PROJECTS

3.

CONSTRUCTION EXPENDITURES
CASH

4.

DEBITS
3,000,000

CREDITS
3,000,000

2,997,000
2,997,000

OTHER FINANCING USES-TRANSFERS OUT

CASH

CE CAPITAL PROJECTS FUND

OTHER FINANCING SOURCES-PROCEEDS OF BONDS
CONSTRUCTION EXPENDITURES
OTHER FINANCING USES-TRANSFERS OUT

5-22

3,000
3,000
3,000,000
2,997,000
3,000

Accounting for Other Governmental Funds

5-9 (B)

VILLAGE OF BUDEKVILLE
GENERAL JOURNAL
DEBT SERVICE FUND
DEBITS

1.

NO ENTRY IN DEBT SERVICE FUND

2.

CASH
OTHER FINANCING SOURCES-TRANSFERS IN
($ 3,000,000 * 4% *6/12)

60,000

EXPENDITURES-INTEREST
CASH

60,000

CREDITS

60,000

60,000

3.

NO ENTRY IN DEBT SERVICE FUND

4.

CASH
OTHER FINANCING SOURCES-TRANSFERS IN

CE OTHER FINANCING SOURCES-TRANSFERS IN

EXPENDITURES-BOND INTEREST
FUND BALANCE

5-23

3,000
3,000
63,000
60,000
3,000

Accounting for Other Governmental Funds

5-9 (C)

VILLAGE OF BUDEKVILLE
STATEMENT OF REVENUES, EXPENDITURES,
AND CHANGES IN FUND BALANCES
GOVERNMENTAL FUNDS
FOR THE YEAR ENDED DECEMBER 31, 2015

GENERAL

REVENUES:
PROPERTY TAXES
OTHER
TOTAL REVENUES
REVENUES

TOTAL

EXPENDITURES:
CURRENT:
GENERAL GOVERNMENT
PUBLIC SAFETY
CAPITAL OUTLAY
DEBT SERVICE:
PRINCIPAL
INTEREST
TOTAL EXPENDITURES
EXCESS (DEFICIENCY) OF
REVENUES OVER
EXPENDITURES
OTHER FINANCING
SOURCES(USES):
PROCEEDS OF BONDS
TRANSFERS IN
TRANSFERS OUT
TOTAL OTHER FINANCING
SOURCES(USES)
TOTAL
REVENUES
NET CHANGE IN FUND
BALANCES
FUND BALANCESBEGINNING
FUND BALANCES-ENDING

POLICE
STATION

CONSTRUCTION

DEBT
SERVICE
FUND

TOTAL
GOVERNMENTAL
FUNDS

$ 512,000
200,000
712,000

$ 512,000
200,000
712,000

149,000
450,000

149,000
450,000
2,997,000

2,997,000

________
599,000

________
2,997,000

0
60,000
60,000

113,000

(2,997,000)

(60,000)

( 2,944,000)

3,000,000

0
60,000
3,656,000

( 125,000)

(3,000)

63,000
________

3,000,000
63,000
( 128,000)

(125,000)

2,997,000

63,000

2, 935,000

(12,000)

3,000

(9,000)

175,000

175,000

$163,000

$0

$ 3,000

$ 166,000

5-24

Accounting for Other Governmental Funds

5-10(A)

CITY OF GENOA
GENERAL JOURNAL
DEBITS

CREDITS

CAPITAL PROJECTS FUND 7/1/2014

EXPENDITURES-CAPITAL OUTLAY
OTHER FINANCING SOURCES-CAPITAL LEASE AGREEMENTS
CASH

$68,190
$53,190
15,000

(FUNDS PROVIDED FOR FUTURE LEASE AGREEMENTS =PRESENT VALUE OF FOUR $15,000 PAYMENTS,
DISCOUNTED AT 5 PERCENT = $53,190)
DEBT SERVICE FUND JULY 1, 2015
EXPENDITURES-INTEREST
EXPENDITURES-PRINCIPAL
CASH

2,660
12,340
15,000

(Interest = $53,190 x .05 = $2,660. Principal = $15,000 $2,660 = $12,340)

5-10 (B)
THE FIXED ASSET AND LONG-TERM LIABILITY ASSOCIATED WITH THIS CAPITAL LEASE
AGREEMENT WOULD BOTH BE REPORTED IN THE GOVERNMENT-WIDE STATEMENTS. AS
OF JULY 1, 2014, THE FIXED ASSET WOULD BE RECORDED IN THE AMOUNT OF $68,190.
ANNUAL DEPRECIATION WOULD BE BASED ON THAT AMOUNT. ON JULY 1, 2014, A
LONG-TERM LIABILITY WOULD BE RECORDED IN THE AMOUNT OF $53,190. ON JULY 1,
2015, THE LIABILITY WOULD BE REDUCED BY $12,340 TO $40,850.

5-11.

TOWN OF MCHENRY
DEBT SERVICE FUND
GENERAL JOURNAL
DEBITS
8,000,000

CASH
OTHER FINANCING SOURCES-REFUNDING BONDS ISSUED
OTHER FINANCING USES-REFUNDING OF EXISTING DEBT
CASH

5-25

CREDITS
8,000,000

8,000,000
8,000,000

Accounting for Other Governmental Funds

5-13 (A) SOLUTIONS TO THE EXCEL BASED EXERCISES ARE ALSO AVAILABLE IN EXCEL ON THE
INSTRUCTORS WEBSITE
Jefferson County
Capital Project Fund Journal Entries
December 31, 2015

Account Title
Cash
Other financing sources - proceeds of bonds
Other financing sources - premium on bonds
Other financing uses - transfers out
Cash

700,000
22,800

22,800

Due from other governments

Intergovernmental revenues

280,000
280,000

Encumbrances
1,000,000
Budgetary Fund Balance - Reserve for encumbrances
Capital expenditures
Contracts payable

1,000,000

612,000
612,000
612,000
612,000

Contracts payable
Cash

Credits

22,800

Budgetary Fund Balance - Reserve for

encumbrances
Encumbrances

Debits
722,800

587,000
587,000

Jefferson County
Debt Service Fund Journal Entries
December 31, 2015
Account Title
Debits
Cash
22,800
Other financing sources - transfers in
Cash
Other financing sources - transfers in

43,000

Expenditures - bond principal

Expenditures - bond interest
Cash

22,000
21,000

Credits
22,800

43,000

43,000

5-26

Accounting for Other Governmental Funds

Jefferson County
Permanent Fund (Elwood Family Book) Journal Entries
December 31, 2015

10

Account Title
Cash
Investments in corporate bonds
Receivable from grantor

Debits
130,000
370,000

Investment in US government securities

Cash

130,000

500,000

Cash
Revenues - investment income - interest

130,000
17,000
17,000

11

No entry - Permanent funds typically do not record encumbrances

12

Expenditures - Library
Accounts payable

13

14

Credits

12,700
12,700

Accounts payable
Cash

8,600

Accrued interest receivable

Revenues - investment income - interest

1,700

Investment in corporate bonds

Investment in US government securities
Revenues - net increase in fair value of
investments

3,000

8,600

5-27

1,700

600
2,400

Accounting for Other Governmental Funds

5-13 (C)

Jefferson County
Capital project Fund Closing Entries
December 31, 2015
Account Title

Debits

Intergovernmental revenue
OFS - proceeds of bonds
OFS - premium on bonds
Fund balance
Capital Expenditures
OFU - Transfers out

280,000
700,000
22,800
368,000
612,000
22,800

Budgetary Fund Balance - Reserve for

Encumbrances
Encumbrances

Account Title

388,000
388,000

Jefferson County
Debt service fund closing entries
December 31, 2015
Debits

OFS - transfers in
Expenditures - bond principal
Expenditures - bond interest
Fund balance

Account Title

Credits

Credits

65,800
22,000
21,000
22,800

Jefferson County
Permanent Fund Closing Entries
December 31, 2015
Debits

Revenues - investment income - interest

Credits

18,700

Revenues - net increase in fair value of

investments
Expenditures - Library
Fund Balance

2,400
12,700
8,400

5-28

Accounting for Other Governmental Funds

5-13 (D)

JEFFERSON COUNTY GOVERNMENTAL FUNDS

STATEMENT OF REVENUES, EXPENDITURES AND CHANGES IN FUND BALANCES
FOR THE YEAR ENDED 12-31-2015
General
Fund

Capital Projects
Fund

Debt
Service
Fund

Permanent
Fund

Total
Governmental
Funds

Revenues
Property Taxes
Intergovernmental revenues
Investment income:
Interest income
Net increase in fair value of investments
Total Revenues
Expenditures
Current:
General Government Operations
Library
Capital Outlay
Debt Service
Principal
Interest
Total Expenditures

262,075

262,075

280,000

280,000

$
-

$
-

221,460

5-18

612,000

612,000

22,000
21,000
43,000

262,075
280,000

18,700
2,400

18,700
2,400

21,100

563,175

12,700

181,560
12,700

12,700

651,900
22,000
21,000
889,160

181,560
39,900

Accounting for Other Governmental Funds

Excess (Deficiency) of Revenues Over

Expenditures

40,615

(43,00
0)

(332,000)

8,40
0

(325,985)

Other financing sources (uses)

Proceeds of bonds
Premium on bonds
Transfers in
Transfers out

(38,500)

(22,800)

total other financing sources (uses)

(38,500)

700,000

65,800

727,300

Net Change in Fund Balance

2,115

368,000

22,800

8,400

401,315

Fund Balance, January 1

Fund Balance, December 31

156,758
158,873

68,000
436,000

22,800

500,000
508,400

724,758
1,126,073

5-13 (E)

700,000
22,800

700,000
22,800
65,800
(61,300)

65,800

JEFFERSON COUNTY GOVERNMENTAL FUNDS

BALANCE SHEET
AS OF 12-31-2015
Capital
Projects
Fund

General Fund

Debt Service
Fund

Permanent
Fund

Total
Governmental
Funds

Assets
Cash
Investment in corporate bonds
Investment in US securities
Taxes Receivable - net

132,648

51,325

5-19

181,000

22,800

8,400
373,000
129,400

344,848
373,000
129,400
51,325

Accounting for Other Governmental Funds

Due from other governments

Accrued interest receivable
Supplies Inventory
Total Assets

280,000
1,700
$

Liabilities, Deferred Inflows and Fund Balances

Liabilities
Accounts Payable
Wages Payable
Contracts payable
Total Liabilities

461,000

22,800

2,000
850

Fund Balances
Nonspendable
Inventories
Permanent Fund principal
Restricted for low income housing projects
Assigned
General Government operations
Debt Service
Library purchases
Unassigned
Total Fund Balances

512,500

4,100
25,000
25,000

2,850

Deferred Inflows of Resources

- Property Taxes

Total Liabilities and Fund Balances

350
184,323

6,100
850
25,000
31,950

4,100

22,600

22,600

350

350
500,000
436,000
800
22,800
8,400
157,723
1,126,073

500,000
436,000
800

22,800
8,400

157,723
158,873
$

280,000
1,700
350
1,180,623

184,323

5-20

436,000
$

461,000

22,800
$

22,800

508,400
$

512,500

1,180,623