Chapter 04 – Accounting for Governmental Operating Activities—Illustrative Transactions and Financial Statements
4-21
Ch. 4, Solutions Exercise 4-22 (Cont’d)
General Problem Information: Preparing statements from revenue and appropriations ledgers
Accreditation Skills tag: AACSB: Knowledge Application, AICPA: FN Reporting
Level of Difficulty: Hard
4-23. CITY OF WATERVILLE
GENERAL JOURNAL
1. May 1
NO ENTRY REQUIRED – Eligibility requirements must be met before an
asset and revenue can be recognized.
2. May 5
3. During the year
EXPENDITURES 165,000
VOUCHERS PAYABLE 165,000
(4) December 13
CASH 165,000
DUE FROM STATE GOVERNMENT 165,000
Chapter 04 – Accounting for Governmental Operating Activities—Illustrative Transactions and Financial Statements
4-22
Ch. 4, Solutions, Exercise 4-23 (Cont’d)
(5) December 31
Debits Credits
REVENUES 165,000
EXPENDITURES 165,000
(No additional entries need to be made, since eligibility requirements have
not been met as of YE for the remaining $35,000 of grant funds awarded.)
General Problem Information: Special revenue fund and voluntary nonexchange transactions
Learning Objective: 4-1
Learning Objective: 4-4
4-24.a. CITY OF EVERGREEN⎯JOURNAL ENTRIES
General Ledger Subsidiary Ledger
Debits Credits Debits Credits
General Fund:
1. ESTIMATED REVENUES 2,774,000
ESTIMATED OTHER
Estimated Revenues Ledger:
TAXES 1,943,000
LICENSES AND PERMITS 372,000
INTERGOVERNMENTAL
REVENUE 397,000
MISCELLANEOUS REVENUES 62,000
Chapter 04 – Accounting for Governmental Operating Activities—Illustrative Transactions and Financial Statements
4-23
Ch. 4, Solutions, Exercise 4-24 a. (Cont’d)
General Ledger Subsidiary Ledger
Debits Credits Debits Credits
Appropriations Ledger:
GENERAL GOVERNMENT 471,000
PUBLIC SAFETY 886,000
PUBLIC WORKS 650,000
Estimated Other Financing Uses Ledger:
INTERFUND TRANSFERS OUT 22,000
General Fund:
2. ENCUMBRANCES⎯2023 931,000
Encumbrances Ledger—2023:
GENERAL GOVERNMENT 58,000
PUBLIC SAFETY 250,000
PUBLIC WORKS 392,000
Chapter 04 – Accounting for Governmental Operating Activities—Illustrative Transactions and Financial Statements
4-24
Ch. 4, Solutions, Exercise 4-24 a. (Cont’d)
General Ledger Subsidiary Ledger
Debits Credits Debits Credits
General Fund:
3. TAXES RECEIVABLE⎯
CURRENT 2,005,000
Revenues Ledger:
PROPERTY TAXES 1,940,000
Governmental Activities:
TAXES RECEIVABLE⎯
CURRENT 2,005,000
General Fund and Governmental Activities:
4. CASH 1,591,000
TAXES RECEIVABLE⎯
DELINQUENT 132,000
General Fund:
5. EXPENDITURES⎯2023 1,750,100
VOUCHERS PAYABLE 1,750,100
Chapter 04 – Accounting for Governmental Operating Activities—Illustrative Transactions and Financial Statements
4-25
Ch. 4, Solutions, Exercise 4-24, a (5) (Cont’d)
General Ledger Subsidiary Ledger
Debits Credits Debits Credits
Expenditures Ledger—2023:
GENERAL GOVERNMENT 411,000
MISCELLANEOUS 11,100
Governmental Activities:
EXPENSES—GENERAL
GOVERNMENT* 422,100
EXPENSES—PUBLIC SAFETY 635,000
EXPENSES—PUBLIC WORKS 254,000
General Fund:
6. ENCUMBRANCES
OUTSTANDING—2022 14,000
ENCUMBRANCES—2022 14,000
Encumbrances Ledger
⎯
2022:
PUBLIC SAFETY 14,000
Expenditures Ledger
⎯
2023:
PUBLIC SAFETY 470
Expenditures Ledger
⎯
2022:
PUBLIC SAFETY 14,000
Chapter 04 – Accounting for Governmental Operating Activities—Illustrative Transactions and Financial Statements
4-26
Ch. 4, Solutions, Exercise 4-24 a (6) (Cont’d)
General Ledger Subsidiary Ledger
Debits Credits Debits Credits
Governmental Activities:
EXPENSES—PUBLIC SAFETY 14,470
VOUCHERS PAYABLE 14,470
General Fund:
Encumbrances Ledger—2023:
GENERAL GOVERNMENT 52,200
PUBLIC SAFETY 240,900
EXPENDITURES⎯2023 850,500
VOUCHERS PAYABLE 850,500
Expenditures Ledger—2023:
GENERAL GOVERNMENT 52,700
PUBLIC SAFETY 236,200
PUBLIC WORKS 360,000
Chapter 04 – Accounting for Governmental Operating Activities—Illustrative Transactions and Financial Statements
4-27
Ch. 4, Solutions, Exercise 4-24 a (7) (Cont’d)
General Ledger Subsidiary Ledger
Debits Credits Debits Credits
Governmental Activities:
EXPENSES—GENERAL GOVT. 123,700
EXPENSES—PUBLIC SAFETY 236,200
General Fund:
8. CASH 839,000
REVENUES 839,000
Revenues Ledger:
LICENSES AND PERMITS 373,000
MISCELLANEOUS REVENUES 66,000
Governmental Activities:
CASH 839,000
PROGRAM REVENUES—
GENERAL
GOVERNMENT—
CHARGES FOR SERVICES 373,000
GENERAL REVENUES—
MISCELLANEOUS 66,000
Chapter 04 – Accounting for Governmental Operating Activities—Illustrative Transactions and Financial Statements
4-28
Ch. 4, Solutions, Exercise 4-24 a (Cont’d)
General Ledger Subsidiary Ledger
Debits Credits Debits Credits
General Fund:
9. OTHER FINANCING USES—
Governmental Activities:
NO EFFECT
General Fund and Governmental Activities:
Chapter 04 – Accounting for Governmental Operating Activities—Illustrative Transactions and Financial Statements
4-29
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)
TAXES
1
1,943,000
1,943,000
3
1,940,000
3,000
1
372,000
372,000
8
373,000
(1,000)
INTERGOVERNMENTAL REVENUE
1
397,000
397,000
8
400,000
(3,000)
1
8
CITY OF EVERGREEN
GENERAL FUND
ESTIMATED OTHER FINANCING USES LEDGER (NOT REQUIRED)
ESTIMATED
OTHER
FINANCING USES
1
9
OTHER
FINANCING USES
BALANCE
Debit (Credit)
Chapter 04 – Accounting for Governmental Operating Activities—Illustrative Transactions and Financial Statements
4-30
Ch. 4, Solutions, Exercise 4-24 a. (Cont’d)
GENERAL FUND
APPROPRIATIONS/ENCUMBRANCES/EXPENDITURES LEDGER
(NOT REQUIRED)
AVAILABLE
TRANSACTION APPROPRIATION ENCUMBRANCE EXPENDITURE BALANCE
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
HEALTH AND WELFARE_____________________
1 600,000 600,000
2 160,000 440,000
5 439,000 1,000
7 (130,100) 130,600 500
Note A: The Public Safety account shown here is for 2023. In addition, a credit of
$14,000 would be made to the Public Safety subsidiary account for 2022, at which
time that account would be placed in the “dead file” with other 2022 subsidiary
accounts that had been retired at the end of that fiscal year.
Chapter 04 – Accounting for Governmental Operating Activities—Illustrative Transactions and Financial Statements
4-31
Ch. 4, Solutions, Exercise 4-24 (Cont’d)
b. CITY OF EVERGREEN
GENERAL FUND
BUDGETARY COMPARISON SCHEDULE
FOR THE YEAR ENDED DECEMBER 31, 2023
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
EXPENDITURES (BUDGET BASIS):
GENERAL GOVERNMENT 471,000 469,500 (1,500)
PUBLIC SAFETY 886,000 880,770 (5,230)
PUBLIC WORKS 650,000 649,000 (1,000)
HEALTH AND WELFARE 600,000 599,500 (500)
OTHER FINANCING USES:
INTERFUND TRANSFERS OUT 22,000 22,000 – 0 –
INCREASE IN ENCUMBRANCES
OUTSTANDINGB -0- 65,800 65,800
INCREASE IN FUND BALANCES 59,000 141,930 82,930
Chapter 04 – Accounting for Governmental Operating Activities—Illustrative Transactions and Financial Statements
4-32
Ch. 4, Solutions, Exercise 4-24 b. (Cont’d)
NOTES:
A The actual expenditures in this statement include encumbrances of 2023
appropriations outstanding at year-end, but do not include the expenditures of
the 2022 appropriations recorded in Entry 6.
B Fund balances do not include encumbrances. Therefore, the $79,800 of
encumbrances that were included as part of actual expenditures for budgetary
General Problem Information: Transactions and budgetary comparison schedule
Learning Objective: 4-1
Learning Objective: 4-3
Topic: Illustrative Journal Entries
Bloom’s Taxonomy: Apply
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
4-33
Ch. 4, Solutions, Exercise 4-25 (Cont’d)
Debits Credits
2. General Fund:
INTERFUND LOANS RECEIVABLE 50,000
CASH 50,000
Governmental Activities:
NO EFFECT
3. General Fund:
OTHER FINANCING USES—INTERFUND
TRANSFERS OUT 100,000
CASH 100,000
Debt Service Fund:
CASH 100,000
OTHER FINANCING SOURCES—
INTERFUND TRANSFERS IN 100,000
4. General Fund:
CASH 5,000
OTHER FINANCING SOURCES—
INTERFUND TRANSFERS IN 5,000
5. General Fund:
INTERFUND LOANS RECEIVABLE—
NONCURRENT 50,000
CASH 50,000
Chapter 04 – Accounting for Governmental Operating Activities—Illustrative Transactions and Financial Statements
4-34
Ch. 4, Solutions, Exercise 4-25, 5 (Cont’d)
Debits Credits
Governmental Activities:
NO EFFECT
Internal Service Fund:
CASH 50,000
INTERFUND LOANS PAYABLE—
NONCURRENT 50,000
b. Proprietary funds, such as the enterprise fund, measure total economic
resources using the accrual basis of accounting. Since this is the same
measurement focus and basis of accounting used at the government-wide
level, there would be no difference between entries in the enterprise fund
Topic: Interfund Activity
Bloom’s Taxonomy: Apply
Accreditation Skills tag: Knowledge Application, AICPA: FN Reporting
Level of Difficulty: Medium
Chapter 04 – Accounting for Governmental Operating Activities—Illustrative Transactions and Financial Statements
4-35
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
ENCUMBRANCES 847,000
3. EXPENDITURES 780,000
INVENTORY OF SUPPLIES 780,000
FUND BALANCE—UNASSIGNED 70,000
FUND BALANCE—NONSPENDABLE 70,000
Chapter 04 – Accounting for Governmental Operating Activities—Illustrative Transactions and Financial Statements
4-36
Ch. 4, Solutions, Exercise 4-26 a. (Cont’d)
Debits Credits
4. ENCUMBRANCES 855,000
ENCUMBRANCES OUTSTANDING 855,000
5. ENCUMBRANCES OUTSTANDING 855,000
ENCUMBRANCES 855,000
6. EXPENDITURES 870,000
INVENTORY OF SUPPLIES 870,000
Chapter 04 – Accounting for Governmental Operating Activities—Illustrative Transactions and Financial Statements
Ch. 4, Solutions, Exercise 4-26 (Cont’d)
b. JEDVILLE TOWNSHIP—JOURNAL ENTRIES
PURCHASES METHOD
GENERAL FUND
Debits Credits
1. ENCUMBRANCES 847,000
ENCUMBRANCES OUTSTANDING 847,000
2. ENCUMBRANCES OUTSTANDING 847,000
ENCUMBRANCES 847,000
3. INVENTORY OF SUPPLIES 70,000
FUND BALANCE—NONSPENDABLE 70,000
4. ENCUMBRANCES 855,000
ENCUMBRANCES OUTSTANDING 855,000
5. ENCUMBRANCES OUTSTANDING 855,000
ENCUMBRANCES 855,000