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City of Walland
Preclosing Trial Balance
For the Year Ended June 30, 20X4
Advance to Enterprise Fund................................................................................. 1,000
Allowance for Uncollectible Taxes...................................................................... 300
Appropriations..................................................................................................... 8,850
Budgetary Fund Balance...................................................................................... 150
Cash...................................................................................................................... $5,000
Due from Special Revenue Fund......................................................................... 100
Encumbrances Outstanding................................................................................. 60
Encumbrances...................................................................................................... 60
Estimated Revenues............................................................................................. 9,000
Expenditures – Capital Outlay............................................................................. 2,500
Expenditures – Operating.................................................................................... 6,340
Fund Balance (July 1, 20X3)............................................................................... 9,505
Investments.......................................................................................................... 2,500
OFS – Proceeds from Sale of Vehicle.................................................................. 50
OFS – Transfer from Capital Projects Fund........................................................ 60
OFU – Transfer to Debt Service Fund................................................................. 100
OFU – Transfer to Enterprise Fund..................................................................... 200
Revenues – Other................................................................................................. 1,250
Revenues – Property Taxes.................................................................................. 7,500
Salaries Payable................................................................................................... 50
Special Item – Proceeds from Sale of Land......................................................... 350
Supplies................................................................................................................ 175
Taxes Receivable................................................................................................. 1,500
Vouchers Payable................................................................................................. 350
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Requirement #1
City of Walland
General Fund
Statement of Revenues, Expenditures, and Changes in Fund Balance
For the Fiscal Year Ended June 30, 20X4
Revenues
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Requirement #2
City of Walland
General Fund
Balance Sheet
June 30, 20X4
Assets
Cash $5,000
Investments 2,500
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Requirement #3
# Accounts Debit Credit
1 Appropriations 8,850
Budgetary Fund Balance 150
Estimated Revenues 9,000
Governmental and Nonprofit Accounting: Theory and Practice, 10e (Freeman)
Problems – Chapter 5
Problem 1 – Matching: Match the Resource Flow with the Type of Revenue
6Listed below in the left column are some events that may or may not be revenues for the General Fund.
Listed in the right column are the classifications of revenues for governmental funds. Correctly match
each event with the appropriate revenue classification. Unless specifically stated otherwise, assume all
amounts are earned, measurable, and available. If the event is not a revenue, state how the event would
be reported in the current year General Fund financial statements.
1. Sales taxes collected locally.
2. Ad valorem taxes for which the levy has been made but
are due and payable in the following fiscal year.
3. Billing for garbage services provided to the Enterprise
Fund by the Sanitation Department (accounted for in the
General Fund).
4. Realized gain from the sale of an investment.
5. Gas taxes collected by the state and allocated based on a
predetermined formula.
7A. Taxes
B. Licenses and Permits
C. Intergovernmental Revenues
D.Charges for Services
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6. Cash received from the issuance of long-term debt.
7. Property taxes levied, due, and payable in the prior fiscal
year and collected in the first 60 days of the current
fiscal year.
8. Payment from the Library Special Revenue Fund to the
General Fund for a utility bill originally paid from
General Fund resources for the entire government.
9. Payments made by the local university to the City in lieu
of paying property taxes on university-owned land.
10. Property taxes levied for the current year and collected
in the first 60 days of the following fiscal year.
11. Cash collections from speeding tickets enforced in
municipal court.
12. Unrealized loss on an investment at the end of the
current fiscal year.
13. Cash received from an operating grant where the time
restriction has not been reached.
14. Cash collected for electrical inspections made in new
home construction.
15. Interest earned on investments.
16. Pass through grant for which the City has administrative
responsibility.
17. Quarterly income tax payments from taxpayers.
18. Receipt of cash for a capital grant for which the
qualifying expenditures have not yet been made.
19. Cash received on next year’s property tax bill.
20. Cash received from a short-term borrowing.
E. Fines and Forfeits
F. Miscellaneous Revenues
G. Not a revenue
Answers:
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19. G – Unearned Revenue
20. G – Fund liability
Problem 2 – Property Tax Entries (enhanced)
The Jackson Independent School District began the year with the following accounts on its Balance Sheet
related to property taxes (all amounts are in thousands of dollars). All accounts have normal balances:
Taxes Receivable – Delinquent............................................................................................ 2,000
Allowance for Uncollectible Taxes – Delinquent................................................................. 400
Deferred Revenues............................................................................................................... 300
Selected transactions for the Jackson Independent School District are presented below.
5. On January 1 the school district levied property taxes of $8,000. The due date for the taxes is
March 31. Taxes are considered delinquent after that date. The school district expects to collect
all but 4% of the levy. In addition the district offers a 2% discount if the taxes are paid by
February 28. The district expects 40% of the tax to qualify for the discount.
6. Between January 2 and February 28, the district collected $4,800 of the taxes due. Of this
amount, $1,300 was due in the preceding fiscal year.
7. During March, an additional $3,500 of receivables were collected. Of this amount, $200 were for
the preceding fiscal year. The remaining delinquent taxes from the preceding fiscal year were
written off as uncollectible.
8. On April 1, the balance of the current year taxes is past due. A 10% penalty and 2% in interest
was immediately assessed on the delinquent debt. It is estimated that $30 of the total interest and
penalties will prove uncollectible.
9. On June 12 the school district wrote off $100 of property taxes, $10 in penalties, and $2 in
interest as uncollectible.
10. From March 31 to December 31 the school district collected $300 of the property taxes that were
levied on January 1. The school district expects to collect an additional $200 of these taxes during
the first two months of the next fiscal year.
Requirements:
1. Prepare the necessary journal entries. Dates and explanations may be omitted. If a transaction
requires no entry, do not leave it blank: state “No Entry Required” and explain why.
2. What was the total Revenues – Property Taxes earned in the current fiscal year.
3. Indicate the impact of each of the transactions on the Balance Sheet equation. If a transaction has
no effect or if the net effect is zero, indicate it with “NE”.
Answers:
Requirement #1
# Accounts Debit Credit
1 Deferred Revenues 300
Revenues – Property Taxes 300
Taxes Receivable – Current 8,000
Allowance for Uncollectible Taxes – Current 320
Allowance for Discounts on Taxes 64
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Revenues – Property Taxes 7,616
2 Cash 4,730
Allowance for Discounts on Taxes 64
Revenues – Property Taxes 6
Taxes Receivable – Delinquent 1,300
Taxes Receivable – Current 3,500
3 Cash 3,500
Taxes Receivable – Delinquent 200
Taxes Receivable – Current 3,300
Allowance for Uncollectible Taxes – Delinquent 400
Revenues – Property Taxes 100
Taxes Receivable – Delinquent 500
Requirement #2
Revenues deferred from previous year...................................................................... 300
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Requirement #3
Trans
# Assets
Deferred
Ouflows Liabiliies
Deferred
Inlows
Fund
Balance
1 NE NE NE (300) 300
Problem 3 – Investment Accounting
The following transactions occurred in the City of Mimosa during fiscal year 20X4 (all amounts are in
thousands of dollars):
1. Purchased investments in long-term participating, interest-bearing securities, $3,000.
2. Collected interest on its investments of $200.
3. Sold 10% of the investments for $304.
4. Purchased 6-month U.S. Treasury Bills for $100.
5. Accrued interest at year end amounted to $15.
6. The fair value of the investments in long-term participating, interest-bearing securities at
year end was $2,620. The fair value of the investments in U.S. Treasury Bills at year end
was $99.
Requirements:
1. Prepare the journal entries for each of these transactions.
2. What is the total interest revenue to be reported for FY 20X4?
3. Indicate the impact of each of the transactions on the Balance Sheet equation. If a transaction has
no effect or if the net effect is zero, indicate it with “NE”.
Requirement #1
# Accounts Debit Credit
1 Investments 3,000
Cash 3,000
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Requirement #2
Transaction #2 – Interest...................................................................................................... $200
Requirement #3
Trans
# Assets
Deferred
Ouflows Liabiliies
Deferred
Inlows
Fund
Balance
1 NE NE NE NE NE
Governmental and Nonprofit Accounting: Theory and Practice, 10e (Freeman)
Problems – Chapter 6
Problem 1 – Matching: Match the Resource Flow with the Type of Expenditure
8Listed below in the left column are events that may or may not be expenditures for the General Fund.
Listed in the right column are the classifications of expenditures for governmental funds. Correctly
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match each event with the appropriate expenditure classification. Unless specifically stated otherwise,
assume all amounts have been incurred. If the event is not an expenditure, state how the event would be
reported in the current year General Fund financial statements.
21. Interest on short-term debt.
22. Purchase of a vehicle that will be used in the Library
(accounted for as a Special Revenue Fund).
23. Signing a capital lease.
24. Claim against the government to be paid in a future
year.
25. Borrowing money with a short-term note.
26. Year-end accrual of interest on long-term debt.
27. Compensated absences earned and paid during the year.
28. Paying salaries and wages.
29. Amounts withheld from salaries and wages for taxes
and Social Security/Medicare.
30. Ordering supplies and materials (assume the purchases
method is used).
31. Receiving supplies (assume the purchases method is
used).
32. Using supplies (assume the purchases method is used).
33. Ordering supplies and materials (assume the
consumption method is used).
34. Issuing long-term debt.
35. Receiving supplies (assume the consumption method is
used).
36. Using supplies (assume the consumption method is
used).
37. Capital lease principal payment.
38. The General Fund reimbursed the Special Revenue
Fund (SRF) for salaries paid originally from SRF
resources.
39. Capital lease interest payment.
40. Repayment of a short-term note.
41. The General Fund received a payment from the Library
Fund (SRF) for its portion of the government electricity
bill.
42. Year-end accrual of interest on short-term note.
43. Compensated absences earned in the current year but to
be paid in future years.
44. Claim against the government to be paid in the current
year.
45. The General Fund received an electric bill for the entire
government. The General Fund paid the bill.
46. The General Fund transferred money to the Capital
Projects Fund to provide financing for the construction
of a major facility.
A. Expenditures – Operating
B. Expenditures – Intergovernmental
C. Expenditures – Capital Outlay
D. Expenditures – Debt Service –
Principal
E. Expenditures – Debt Service –
Interest
F. Not an expenditure
G. Event reduces expenditure (also
identify which of above
expenditures would be reduced)
Answers:
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