Chapter 04 – Accounting for Governmental Operating Activities—Illustrative Transactions and Financial Statements
4-21
Ch. 4, Solutions, Exercise 4-23 (Cont’d)
General Problem Information: Special revenue fund and voluntary nonexchange transactions
Learning Objective: 4-1, 4-4, 4-7
Topic: Special Revenue Funds
Bloom’s Taxonomy: Apply
Accreditation Skills tag: AACSB: Knowledge Application
Level of Difficulty: Medium
4-24.a. CITY OF EVERGREEN⎯JOURNAL ENTRIES
General Ledger Subsidiary Ledger
Debits Credits Debits Credits
General Fund:
1. ESTIMATED REVENUES 2,774,000
APPROPRIATIONS 2,693,000
BUDGETARY FUND
BALANCE 81,000
Estimated Revenues Ledger:
TAXES 1,943,000
LICENSES AND PERMITS 372,000
INTERGOVERNMENTAL
Chapter 04 – Accounting for Governmental Operating Activities—Illustrative Transactions and Financial Statements
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Ch. 4, Solutions, Exercise 4-24 a. (Cont’d)
General Ledger Subsidiary Ledger
Debits Credits Debits Credits
General Fund:
2. ENCUMBRANCES⎯2020 931,000
ENCUMBRANCES
OUTSTANDING⎯2020 931,000
Encumbrances Ledger—2020:
General Fund:
3. TAXES RECEIVABLE⎯
CURRENT 2,005,000
ALLOWANCE FOR
UNCOLLECTIBLE
Chapter 04 – Accounting for Governmental Operating Activities—Illustrative Transactions and Financial Statements
4-23
Ch. 4, Solutions, Exercise 4-24, a (4) (Cont’d)
General Ledger Subsidiary Ledger
Debits Credits Debits Credits
General Fund and Governmental Activities:
4. CASH 1,591,000
Expenditures Ledger—2020:
GENERAL GOVERNMENT 411,000
6. ENCUMBRANCES
Chapter 04 – Accounting for Governmental Operating Activities—Illustrative Transactions and Financial Statements
4-24
Ch. 4, Solutions, Exercise 4-24 a (6) (Cont’d)
General Ledger Subsidiary Ledger
Debits Credits Debits Credits
Encumbrances Ledger
⎯
2019:
PUBLIC SAFETY 14,000
EXPENDITURES⎯2019 14,000
EXPENDITURES⎯2020 470
General Fund:
7. ENCUMBRANCES—
OUTSTANDING—2020 851,200
ENCUMBRANCES—2020 851,200
Encumbrances Ledger—2020:
Chapter 04 – Accounting for Governmental Operating Activities—Illustrative Transactions and Financial Statements
4-25
Ch. 4, Solutions, Exercise 4-24 a (7) (Cont’d)
General Ledger Subsidiary Ledger
Debits Credits Debits Credits
Expenditures Ledger—2020:
GENERAL GOVERNMENT 52,700
Chapter 04 – Accounting for Governmental Operating Activities—Illustrative Transactions and Financial Statements
4-26
Ch. 4, Solutions, Exercise 4-24 a. (8) (Cont’d)
General Ledger Subsidiary Ledger
Debits Credits Debits Credits
Governmental Activities:
CASH 839,000
PROGRAM REVENUES—
GENERAL
General Fund and Governmental Activities:
9. VOUCHERS PAYABLE 2,505,000
CASH 2,505,000
Chapter 04 – Accounting for Governmental Operating Activities—Illustrative Transactions and Financial Statements
4-27
Ch. 4, Solutions, Exercise 4-24 a. (Cont’d)
Note: The Governmental Activities ledger is not shown here.
CITY OF EVERGREEN
GENERAL FUND
REVENUE LEDGER (NOT REQUIRED)
ESTIMATED
REVENUES
REVENUES
BALANCE
Debit (Credit)
1
1,943,000
1,943,000
3
1,940,000
3,000
1
372,000
372,000
8
373,000
(1,000)
1
397,000
397,000
8
400,000
(3,000)
1
62,000
62,000
8
66,000
(4,000)
Chapter 04 – Accounting for Governmental Operating Activities—Illustrative Transactions and Financial Statements
4-28
Ch. 4, Solutions, Exercise 4-24 a. (Cont’d)
GENERAL FUND
APPROPRIATIONS/ENCUMBRANCES/EXPENDITURES LEDGER
(NOT REQUIRED)
AVAILABLE
TRANSACTION APPROPRIATION ENCUMBRANCE EXPENDITURE BALANCE
GENERAL GOVERNMENT_______________________
1 471,000 471,000
PUBLIC SAFETY_________________________
1 886,000 886,000
2 250,000 636,000
5 635,000 1,000
6 (Note A) 470 530
7 (240,900) 236,200 5,230
PUBLIC WORKS_________________________
HEALTH AND WELFARE_____________________
1 600,000 600,000
MISCELLANEOUS ______________
1 86,000 86,000
Note A: The Public Safety account shown here is for 2020. In addition, a credit of
Chapter 04 – Accounting for Governmental Operating Activities—Illustrative Transactions and Financial Statements
4-29
Ch. 4, Solutions, Exercise 4-24 (Cont’d)
b. CITY OF EVERGREEN
GENERAL FUND
BUDGETARY COMPARISON SCHEDULE
FOR THE YEAR ENDED DECEMBER 31, 2020
VARIANCE
BUDGET WITH FINAL
(ORIGINAL BUDGET
AND OVER
FINAL) ACTUALA (UNDER)
REVENUES:
TAXES $1,943,000 $1,940,000 $ (3,000)
LICENSES AND PERMITS 372,000 373,000 1,000
INTERGOVERNMENTAL REVENUE 397,000 400,000 3,000
MISCELLANEOUS REVENUES 62,000 66,000 4,000
TOTAL REVENUES 2,774,000 2,779,000 5,000
Chapter 04 – Accounting for Governmental Operating Activities—Illustrative Transactions and Financial Statements
4-30
Ch. 4, Solutions, Exercise 4-24 b. (Cont’d)
NOTES:
A The actual expenditures in this statement include encumbrances of 2020
4-25. a. TOWN OF BIG SPRINGS
Debits Credits
1. General Fund:
EXPENDITURES 100,000
CASH 100,000
Chapter 04 – Accounting for Governmental Operating Activities—Illustrative Transactions and Financial Statements
4-31
Ch. 4, Solutions, Exercise 4-25 (Cont’d)
Debits Credits
2. General Fund:
INTERFUND LOANS RECEIVABLE 50,000
3. General Fund:
OTHER FINANCING USES—INTERFUND
TRANSFERS OUT 100,000
4. General Fund:
CASH 5,000
OTHER FINANCING SOURCES—
5. General Fund:
INTERFUND LOANS RECEIVABLE—
Chapter 04 – Accounting for Governmental Operating Activities—Illustrative Transactions and Financial Statements
4-32
Ch. 4, Solutions, Exercise 4-25, 5 (Cont’d)
Debits Credits
Internal Service Fund:
Chapter 04 – Accounting for Governmental Operating Activities—Illustrative Transactions and Financial Statements
4-33
Ch. 4, Solutions, (Cont’d)
4-26. a. JEDVILLE TOWNSHIP—JOURNAL ENTRIES
CONSUMPTION METHOD
GENERAL FUND
Debits Credits
1. ENCUMBRANCES 847,000
ENCUMBRANCES OUTSTANDING 847,000
2. ENCUMBRANCES OUTSTANDING 847,000
3. EXPENDITURES 780,000
INVENTORY OF SUPPLIES 780,000
Chapter 04 – Accounting for Governmental Operating Activities—Illustrative Transactions and Financial Statements
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Ch. 4, Solutions, Exercise 4-26 a. (Cont’d)
Debits Credits
5. ENCUMBRANCES OUTSTANDING 855,000
6. EXPENDITURES 870,000
INVENTORY OF SUPPLIES 870,000
Chapter 04 – Accounting for Governmental Operating Activities—Illustrative Transactions and Financial Statements
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b. JEDVILLE TOWNSHIP—JOURNAL ENTRIES
PURCHASES METHOD
GENERAL FUND
Debits Credits
1. ENCUMBRANCES 847,000
ENCUMBRANCES OUTSTANDING 847,000
2. ENCUMBRANCES OUTSTANDING 847,000
3. INVENTORY OF SUPPLIES 70,000
Chapter 04 – Accounting for Governmental Operating Activities—Illustrative Transactions and Financial Statements
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Ch. 4, Solutions, Exercise 4-26 b. (Cont’d)
Debits Credits
5. ENCUMBRANCES OUTSTANDING 855,000
6. FUND BALANCE—NONSPENDABLE 10,000