Answers

Problem 1
Budgetary entries:
Estimated revenues - property taxes 1,900,000
Estimated revenues - charges for services 360,000
Appropriations - General Government 320,000
Appropriations - Health & Sanitation 1,800,000
Budgetary fund balance 140,000

Operation entries:
1.
Encumbrances 1,756,000
Budgetary fund balance reserved for encumbrances 1,756,000

2.
Cash 2,187,500
Revenues 2,187,500

3.
Budgetary fund balance reserved for encumbrances 930,000
Encumbrances 930,000

4.
Expenditures 931,000
Cash 931,000

5.
Budgetary fund balance reserved for encumbrances 116,000
Encumbrances 116,000

6.
Expenditures 114,000
Cash 114,000

7.
Cash 81,00
Revenues 81,000
Problem 2
a. Closing entries:
Appropriations 99,000
Budgetary fund balance 2,000
Estimated revenues 101,000

Revenues - taxes 101,000

Revenues - other 1,080
Expenditures - personal services 93,700
Expenditures - supplies 5,680
Unassigned fund balance 2,700

b. Statement of Revenues, Expenditures and Changes in Fund Balance

Town
Special Revenue Fund
Statement of Revenues, Expenditures and Changes in Fund Balance
For the year ended June 30, 20XX
Revenues
Taxes 101,000
Other 1,080
Total revenues $102,080
Expenditures
Personal services 93,700
Supplies 5,680
Total expenditures $99,380
Excess of revenues over (under) expenditures 2,700
Fund balance, beginning of year 57,000
Fund balance, end of year $59,700

c. Balance Sheet
Town
Special Revenue Fund
Balance Sheet
At June 30, 20XX
Assets
Cash 5,200
Taxes receivable 41,000
Investment 65,000
Total assets $111,200
Liabilities
Vouchers payable 37,750
Tax anticipation notes payable 13,750
Total liabilities $51,500
Fund balance
Unassigned 59,700
Total liabilities and fund balance $111,200
Problem 3
a. CPF
Cash 950,000
Other financing source - long-term debt issued 950,000

b. CPF
Expenditure - building 800,000
Vouchers payable 800,000

c. CPF
Vouchers payable 800,000
Cash 800,000

d. GF
Transfer out to Debt Service Fund 65,000
Cash 65,000

DSF
Cash 65,000
Transfer in from General Fund 65,000

e. DSF
Expenditures - bond principal 25,000
Expenditures - interest 40,000
Matured bonds payable 25,000
Matured interest payable 40,000

f. DSF
Matured bonds payable 25,000
Matured interest payable 40,000
Cash 65,000

Problem 4
a.
Estimated other financing sources 2,500,000
Estimated revenues 1,500,000
Appropriations 4,000,000
b.
Cash 2,500,000
Transfer in from General Fund 2,500,000

c.
Cash 1,500,000
Advance on construction grant 1,500,000

d.
Encumbrances 3,750,000
Budgetary fund balance reserved for encumbrances 3,750,000

e.
Budgetary fund balance reserved for encumbrances 1,750,000
Encumbrances 1,750,000

Expenditures - construction costs 1,750,000

Construction contracts payable 1,662,500
Retainage payable 87,500

Advance on construction grant 525,000

Revenues - construction grant 525,000

f.
Construction contracts payable 1,662,500
Cash 1,662,500

g.
Encumbrances 300,000
Budgetary fund balance reserved for encumbrances 300,000

h.
Budgetary fund balance reserved for encumbrances 2,000,000
Encumbrances 2,000,000

Expenditures - construction costs 2,000,000

Construction contracts payable 2,000,000

Construction contracts payable 2,000,000

Retainage payable 87,500
Cash 2,087,500
 Advance on construction grant 500,000
Revenues - construction grant 500,000

Problem 5
a.
Property taxes receivable 600,000
Revenues - property taxes 600,000

b.
Cash 600,000
Property taxes receivable 600,000

c.
Investments 200,000
Cash 200,000

d.
Expenditures - bond principal 175,000
Expenditures - interest 125,000
Matured bond principal payable 175,000
Matured bond interest payable 125,000

e.
Matured bond principal payable 175,000
Matured bond interest payable 125,000
Cash 300,000

f.
Cash 207,000
Investments 200,000
Revenues interest earned on investments 7,000

Problem 6
a.
Cash 525,000
Transfer in from General Fund - capital contribution 525,000
b.
Photocopying equipment 500,000
Cash 500,000

c.
Supplies inventory 92,000
Accounts payable 92,000

d.
Accounts payable 92,000
Cash 92,000

e.
Salaries expense 365,000
Cash 365,000

f.
Pensions expenses 43,000
Cash 43,000

g.
Occupancy expense 36,000
Due to General Fund 36,000

h.
Due from General Fund 52,000
Due from Enterprise Fund 38,000
Revenues - photocopying services 90,000

i.
Cash 90,000
Due from General Fund 52,000
Due from Enterprise Fund 38,000

j.
Depreciation expense - printing equipment 37,500
Accumulated depreciation - printing equipment 37,500

k.
Supplies expense 86,000
Supplies inventory 86,000
l.
Salaries expense 12,500
Accrued expenses payable 12,500

Problem 7
a.
Cash 4,000,000
Revenue bonds payable 4,000,000

b.
Buses 2,000,000
Building 950,000
Cash 2,950,000

c.
Investments 250,000
Cash 250,000

d.
Repair parts inventory 52,000
Cash 52,000

e.
Cash 950,000
Revenues - bus fares 950,000

f.
Accounts receivables 15,000
Revenues - bus fares 15,000

g.
Salaries expense 525,000
Cash 525,000

h.
Cash 260,000
Investments 250,000
Investment revenue 10,000
i.
Revenue bonds payable 100,000
Interest expense 100,000
Cash 100,000
Calculation: Principal payment - $4,000,000 / 40 = $100,000. Interest - $4,000,000
for 6 month at 5% annual = $100,000

j.
Depreciation expense - buses 200,000
Depreciation expense - building 63,333.33
Accumulated depreciation - buses 200,000
Accumulated depreciation - building 63,333.33
Calculation: Buses depreciation - $2,000,000 / 10 = $200,000 annual, for 6 months
would be $100,000. Building depreciation - $950,000 / 30 / 2 = $63,333.33 in 6
months

k.
Repair parts expense 43,500
Repair parts inventory 43,500

l.
Salaries expense 14,000
Accrued expenses payable 14,000

m.
Interest expense 48,750
Interest payable 48,750
Calculation: Accrual interest - Remaining bonds of $3,900,000 / 12 months for 3
months (October to December) * 5% annual = $48,750

Problem 8
a.
Due to General Fund 250,000
Additions - pension contributions - employer 250,000

b.
Cash 250,000
Due from General Fund 250,000
c.
Cash 170,000
Additions - investment interest and dividends 170,000

d.
Cash 225,000
Investments 210,000
Additions - net appreciation interest and dividends 15,000

e.
Investments 265,000
Cash 265,000

f.
Deductions - retirement annuities 235,000
Cash 235,000

g.
Deductions - administrative expense 130,000
Cash 130,000

h.
Investments 245,000
Additions - net appreciation in fair value of investments 245,000

Problem 9
a.
Cash 7,500,000
Due to state and other governmental units 7,500,000

b.
Investments 7,500,000
Cash 7,500,000

c.
Due to state and other governmental units 7,500,000
Due to General Fund 4,900,000
Due to other governmental units 2,600,000
d.
Cash 7,600,000
Investments 7,500,000
Due to General Fund 100,000

e.
Due to General Fund 5,000,000
Due to other governmental units 2,600,000
Cash 7,600,000