Chapter 03 – Governmental Operating Statement Accounts; Budgetary Accounting
3-15
Ch. 3, Solutions, Exercise 3-22 (Cont’d)
Appropriations Ledger:
GENERAL GOVERNMENT 5,400,000
PUBLIC SAFETY 8,550,000
MISCELLANEOUS 80,000
General Problem Information: Recording the budget
Learning Objective: 3-5
Topic: Budgetary Accounting
Bloom’s Taxonomy: Apply
3-23. TOWN OF LYNTON
General Ledger Subsidiary Ledger
Debits Credits Debits Credits
a. ENCUMBRANCES—20xx 2,294,315
ENCUMBRANCES
OUTSTANDING—20xx 2,294,315
Encumbrances Ledger:
GENERAL GOVERNMENT 550,000
b. ENCUMBRANCES
OUTSTANDING—20xx 1,727,763
ENCUMBRANCES—20xx 1,727,763
Chapter 03 – Governmental Operating Statement Accounts; Budgetary Accounting
Ch. 3, Solutions, Exercise 3-23 (Cont’d)
Encumbrances Ledger:
GENERAL GOVERNMENT 490,000
CULTURE AND
RECREATION 54,270
Expenditures Ledger:
GENERAL GOVERNMENT 490,000
PUBLIC SAFETY 720,013
PUBLIC WORKS 463,480
Note: Except Culture and Recreation, all functions received only portions of the products
requested. Therefore, the amount of the encumbrances cancelled is equal to the actual
cost of the products received. The total encumbrance for Culture and Recreation was
cancelled since it received everything ordered.
General Problem Information: Recording encumbrances and expenditures
Learning Objective: 3-5
Topic: Budgetary Accounting
3-17
3-24.
General Ledger Subsidiary Ledger
Debits Credits Debits Credits
a. ESTIMATED REVENUES 2,700,000
BUDGETARY FUND
BALANCE 50,000
APPROPRIATIONS 2,650,000
Estimated Revenues Ledger:
TAXES 1,900,000
LICENSES AND PERMITS 350,000
FINES AND FORFEITS 250,000
Appropriations Ledger:
GENERAL GOVERNMENT 500,000
PUBLIC SAFETY 1,600,000
PUBLIC WORKS 350,000
b.
General Ledger Subsidiary Ledger
Debits Credits Debits Credits
1. CASH 43,000
REVENUES 43,000
Revenues Ledger:
LICENSES AND PERMITS 31,000
FINES AND FORFEITS 12,000
Chapter 03 – Governmental Operating Statement Accounts; Budgetary Accounting
3-18
Ch. 3, Solutions, Exercise 3-24 (Cont’d)
General Ledger Subsidiary Ledger
Debits Credits Debits Credits
2. ENCUMBRANCES—20xx 29,900
ENCUMBRANCES
OUTSTANDING—20xx 29,900
Encumbrances Ledger:
GENERAL GOVERNMENT 7,400
PUBLIC SAFETY 11,300
PUBLIC WORKS 6,100
3. ENCUMBRANCES
OUTSTANDING—20xx 29,100
ENCUMBRANCES—20xx 29,100
Encumbrances Ledger:
GENERAL GOVERNMENT 7,400
PUBLIC SAFETY 10,700
PUBLIC WORKS 5,900
CULTURE AND RECREATION 4,200
MISCELLANEOUS 900
Expenditures Ledger:
GENERAL GOVERNMENT 7,300
PUBLIC SAFETY 10,800
PUBLIC WORKS 6,100
Chapter 03 – Governmental Operating Statement Accounts; Budgetary Accounting
3-19
Ch. 3, Solutions, Exercise 3-24 (Cont’d)
c. CALCULATION OF BUDGETED BUT UNREALIZED REVENUES
AS OF JULY 31
UNREALIZED
SOURCE BUDGETED ACTUAL REVENUE
PROPERTY TAXES $1,900,000 $ –0- $1,900,000
LICENSES AND PERMITS 350,000 31,000 319,000
Chapter 03 – Governmental Operating Statement Accounts; Budgetary Accounting
3-20
Ch. 3, Solutions, Exercise 3-24 (Cont’d)
d. CALCULATION OF AVAILABLE APPROPRIATIONS, AS OF JULY 31
AVAILABLE
APPROPRIATIONS ENCUMBRANCES EXPENDITURES APPROPRIATIONS
GENERAL GOVERNMENT $ 500,000 $ -0- $ 7,300 $ 492,700
CULTURE AND RECREATION 150,000 -0- 4,100 145,900
MISCELLANEOUS 50,000 -0- 900 49,100
TOTAL $2,650,000 $800 $29,200 $2,620,000
General Problem Information: Recording General Fund operating budget and operating transactions
Learning Objective: 3-5
Chapter 03 – Governmental Operating Statement Accounts; Budgetary Accounting
3-21
3-25. CITY OF AUGUSTA
a. Estimated revenues total $900,000, while appropriations total $860,000 (the sum of the
amounts designated as “Budget Authorization” in the Estimated Revenues and
Appropriations columns of the respective subsidiary ledgers).
b. 1. Intergovernmental Revenues (entry 103) was adjusted by $12,500 in the Revenues
2. Decreased. Both Estimated Revenues and Appropriations were increased; however, the
c. 1. There is a debit balance in the three Revenues ledger accounts totaling $912,500, while
there is a credit balance totaling $910,000 in the four accounts in the Appropriations
ledger.
3. Of the $912,500 estimated revenues (original budget plus amendment), $225,000 has
been recognized and $687,500 remains to be recognized. The city has authorizations to
spend $910,000, of which $1,700 is encumbered and $200,650 has been spent,
indicating that $707,650 may legally be spent as authorized.
General Problem Information: Subsidiary ledgers
Learning Objective: 3-5
Topic: Budgetary Accounting
3-26. CITY OF LEEVILLE
a. Generally, encumbrances are not used with salary and wage expenditures. The reason
encumbrances are not used is because salary and wage expenditures tend to be recurring
and relatively constant in amount.
c. Based strictly on spending to date, it would appear that Personnel, Materials & Supplies,
and Capital Outlays could overspend the appropriated amounts prior to the fiscal year end.
Personnel has spent 83% ($537,010/$647,000) of its appropriation, Materials & Supplies
has spent or encumbered 90% of its appropriation ([$979,968+$19,599]/$1,113,600), and
Capital Outlay has spent 94% ($110,250/$117,000) of its appropriation. It also appears that
Miscellaneous could underspend its appropriation since only 64%
Chapter 03 – Governmental Operating Statement Accounts; Budgetary Accounting
3-22
Ch. 3, Solutions, Exercise 3-26 (Cont’d)
d. ([$87,681+$4,384]/$144,928) of the appropriation has been spent or encumbered at the end
of the 3rd quarter.
e. Given that this city is located in the northeastern part of the United States it is likely that
the costs of snow removal and keeping streets clear during winter weather would cause a
greater use of Material & Supplies in the 1st and 2nd quarters of the fiscal year. It is also
possible that there would be a need for additional personnel or overtime costs during those
periods, causing the Personnel costs to be higher. Additionally, street maintenance
activities may be higher during the summer when the weather allows for street, curb and
General Problem Information: Departmental budgetary comparison report
Learning Objective: 3-3
Topic: Reporting Budgeted and Actual Results
Bloom’s Taxonomy: Analyze
Chapter 03 – Governmental Operating Statement Accounts; Budgetary Accounting
3-23
3-27.
WESTOVER VILLAGE
Statement of Activities (partial)
For the Year Ended June 30, 2023
Net (Expense)
Revenue and Changes
in Net Position
Program Revenues
Functions/Programs
Expenses
Charges for
Services
Operating
Grants
Capital
Grants
Governmental
Activities
Primary Government
General government
$ 9,571
$ 3,146
$ 843
$ (5,582)
Public safety
34,844
1,198
1,307
$ 62
(32,277)
Health and sanitation
5,612
Culture and recreation
12,352
3,995
2,450
Interest on long-term debt
6,068
_______
____
Total governmental activities
$ 69,573
$ 13,951
$ 62
(50,960)
General revenues:
Property taxes
56,300
Unrestricted grants and contributions
1,200
Investment earnings
1,958
Total general revenues
59,458
Special item—gain on sale of park land
3,473
Total general revenues and special
62,931
Change in net position
11,971
Net position—July 1, 2022
1,643
Net position—June 30, 2023
$ 13,614
Chapter 03 – Governmental Operating Statement Accounts; Budgetary Accounting
Ch. 3, Solutions, Exercise 3-27 (Cont’d)
General Problem Information: Government-wide statement of activities
Learning Objective: 3-1
Topic: Classification and Reporting of Expenses and Revenues at the Government-wide Level
Bloom’s Taxonomy: Apply
3-25
3-28.
a.
CITY OF GREENVILLE
General Fund
Statement of Revenues, Expenditures, and Changes in Fund Balances
for the Fiscal Year (amounts in thousands)
Revenues:
Taxes
$ 6,051
Fines and forfeits
308
Intergovernmental revenue
Charges for services
Total Revenues
500
Expenditures:
General government
$ 1,622
Public safety
3,361
Public works
Culture and recreation
Total Expenditures
1,443
Other Financing Sources and (Uses)
Interfund transfer out
(50)
Change in Fund Balances
31
Fund Balances, January 1
152
Fund Balances, December 31
Chapter 03 – Governmental Operating Statement Accounts; Budgetary Accounting
3-26
Ch. 3, Solutions, Exercise 3-28 (Cont’d)
b. CITY OF GREENVILLE
General Fund
Schedule of Revenues, Expenditures, and Changes in Fund Balances—Budget and Actual
for the Fiscal Year (amounts in thousands)
Budgeted Amounts
Actual Amounts
Variance with Final
Original
Final
Budget Basis
Budget Over(Under)
Revenues
Taxes
$ 6,048
$ 6,048
$ 6,051
$ 3
Fines and forfeits
303
303
308
5
Intergovernmental revenue
500
500
500
–
Charges for services
370
370
366
(4)
Total revenues
7,221
7,221
7,225
4
Expenditures and Encumbrances
General government
1,635
1,635
1,630
(5)
Public safety
3,375
3,375
3,372
(3)
Public works
1,448
1,448
1,446
(2)
Culture and recreation
724
724
718
(6)
Total Expenditures
7,182
7,182
7,166
(16)
Excess of revenues over expenditures
39
39
59
20
Other Financing Sources and (Uses)
Interfund transfers out
50
50
50
–
Excess of revenues over expenditures and other
financing sources
(11)
(11)
9
20
–
–
22
22
Chapter 03 – Governmental Operating Statement Accounts; Budgetary Accounting
3-27
General Problem Information: Governmental fund statement and schedule
Learning Objective: 3-3
Ch. 3, Solutions, Exercise 3-28 (Cont’d)
Increase in encumbrances outstanding
Increase in fund balances for the year
(11)
(11)
31
42
Fund balances, January 1
152
152
152
–
Fund balances, December 31