ACCT350, Ch. 3, Assignment 3d
Instructions: Complete Problem 9 and Problem 11 by filling in the appropriate entries below.
Prob. 3-9: Interfund transactions. Interfund transactions are reciprocal or nonreciprocal. Prepare journal entries to
record the following interfund transactions. In addition, record in the far right column whether each transaction is
reciprocal or not.
a.
The General fund loans the Capital Projects fund $200,000 to hire an architect to start planning a
building.
b.
The Enterprise fund bills the General fund $30,000 for electrical power provided.
c.
The General fund pays the Enterprise fund power bill of $30,000.
d.
The General fund permanently transfers $200,000 in capital to an Enterprise fund to help it with startup expenses.
e.
The General fund transfers $25,000 to the Debt service fund to pay principal and interest on long-term
debt.
a.
b.
Answer.
General fund:
Due from Capital Projects Fund
Cash
Capital projects fund:
Enterprise fund:
General fund:
c.
General fund:
Enterprise fund:
d.
General fund:
Enterprise fund:
e.
General fund:
Debt service fund:
DR
200,000
CR
200,000
Reciprocal?
Yes
Prob. 3-11: Putting it all together.
A. Prepare journal entries to record the following transactions for a city by filling in the blank boxes below. Assume
the city had $1,000,000 in cash and unreserved fund balance at the beginning of the year.
a.
The budget is enacted into law permitting $3,000,000 in spending, and estimating $2,950,000 in
revenues will be received.
b.
Property tax revenues of $2,800,000 are levied during the fiscal period, and 5% are estimated to be
uncollectible.
c.
Employee salaries are paid totaling $1,900,000 during the fiscal period.
d.
Purchase orders are issued totaling $1,000,000 during the fiscal period.
e.
All goods are received from the purchase orders with invoices of $990,000.
f.
Property taxes are collected in the amount of $2,700,000.
g.
Property taxes become delinquent, and only 2% of the remaining delinquent taxes are estimated to be
uncollectible.
h.
License, permit, and fine revenues of $100,000 are received during the fiscal period.
i.
The vouchers payable outstanding are paid.
j.
Office supplies are ordered just before fiscal year-end (but not received) for $20,000.
k.
The budgetary accounts are closed at fiscal year-end.
Answer.
a.
Estimated Revenues
Budgetary Fund Balance
Appropriations
b.
Property Taxes Receivable - Current
Allowance for Uncoll. Prop. Tax - Current
Property Tax Revenue
c.
Expenditures-Salaries
Cash
d.
Encumbrances
Budgetary Fund Balance Reserved for Encumbrances
e.
Budgetary Fund Balance Reserved for Encumbrances
Encumbrances
Expenditures
Vouchers Payable
f.
Cash
Property Taxes Receivable - Current
Allowance for Uncollectible Property Taxes - Current
Property Tax Revenue
g.
Property Taxes Receivable - Delinquent
Property Taxes Receivable - Current
Allowance for Uncollectible Property Taxes - Current
Allowance for Uncollectible Property Taxes Delinquent
Property Tax Revenue
h.
Cash
License, Permit, and Fine Revenues
i.
Vouchers Payable
Cash
j.
Encumbrances
Budgetary Fund Balance Reserved for Encumbrances
k.
Appropriations
Expenditures
Budgetary Fund Balance
License, Permit, and Fine Revenues
Property Tax Revenues
Budgetary Fund Balance
Estimated Revenues
Budgetary Fund Balance
Unreserved Fund Balance
Budgetary Fund Balance Reserved for Encumbrances
Encumbrances
Unreserved Fund Balance
Fund Balance Reserved for Encumbrances
B. Complete the Statement of Activities and Balance Sheet below.
STATEMENT OF ACTIVITIES
Budget
Revenues
Expenditures & Encumbrances
Net
Cash
Prop. Tax. Rec. – Delinquent.
Allow. For Uncoll. PT – Del.
TOTAL ASSETS
Fund Balance
Reserved for Encumbrances
Unreserved
TOTAL FUND BALANCE
Actual
Variance
38,000F
BALANCE SHEET
Beg. Bal.
1,000,000
0
0
1,000,000
0
1,000,000
1,000,000
End. Bal.
1,008,000
1,008,000