ACG6506 Instructions City of Smithville soution 18th edition
Accompany18th Edition of Accounting for Governmental & Nonprofit Entitie
Journals, Ledgers & Trial Balances City of Smithville To Accompany18th Edition of Accounting for Governmental & Nonprofit Entities
Table of Contents
Completing Chapters 2 through 11 of the City of Smithville Full Version. 3
Chapter 2 Opening the Books. 4
Chapter 3 Recording the Annual Budget 8
Chapter 4 Recording Operating Transactions Affecting the General Fund and Governmental Activities at the Government-wide Level 10
Chapter 5 Recording Capital Asset Transactions. 18
Chapter 6 Transactions Affecting General Long-term Liabilities and Debt Service. 22
Chapter 7 Recording Transactions Affecting the Enterprise Fund and Business-type Activities 28
Chapter 8 Recording Transactions Affecting a Fiduciary Fund—a Tax Custodial Fund. 31
Chapter 9 Adjusting and Closing Entries for Governmental Activities, Government-wide Level; Preparation of Government-wide and Major Fund Financial Statements. 36
Chapter 2 Opening the Books
CITY OF SMITHVILLE General Fund Post-Closing Trial Balance As of December 31, 2019
Account Title Debits Credits Cash $ 376,290 Taxes Receivable—Delinquent 391,756 Allowance for Uncollectible Delinquent Taxes $ 11,752 Interest and Penalties Receivable on Taxes 40,126 Allowance for Uncollectible Interest and Penalties 3,611 Due from Other Funds 12,000 Due from State Government 165,000 Inventory of Supplies 66,000 Vouchers Payable 272,187 Due to Other Funds 6,400 Due to Federal Government 135,720 Due to State Government 32,600 Deferred Inflows of Resources 97,704 Fund Balance—Nonspendable—Inventory of Supplies 66,000 Fund Balance—Restricted—Public Safety 15,000 Fund Balance—Committed—Public Works 29,700 Fund Balance—Assigned—Culture and Recreation 56,800 Fund Balance—Unassigned 323,698 Totals $1,051,172 $1,051,172
Unpost capability. As mentioned in the “User Guide” page, the City of Smithville software program permits students to “unpost” a particular batch of posted transactions. Unposted entries then can be edited and re-posted. In addition, any omitted entries can be inserted above or below a selected journal line in any unposted batch of entries. Prior to unposting a batch, all batches must be posted.
CITY OF SMITHVILLE Governmental Activities Government-wide Level Post-Closing Trial Balance As of December 31, 2019
Account Title Debits Credits Cash $ 376,290 Taxes Receivable—Delinquent 391,756 Allowance for Uncollectible Delinquent Taxes $ 11,752 Interest and Penalties Receivable on Taxes 40,126 Allowance for Uncollectible Interest and Penalties 3,611 Due from State Government 165,000 Internal Receivables from Business-type Activities 12,000 Inventory of Supplies 66,000 Land 4,180,000 Infrastructure 9,862,000 Accumulated Depreciation—Infrastructure 2,713,944 Buildings 6,296,000 Accumulated Depreciation—Buildings 1,731,000 Equipment 3,556,800 Accumulated Depreciation—Equipment 1,765,480 Vouchers Payable 272,187 Due to Federal Government 135,720 Due to State Government 32,600 Internal Payables to Business-type Activities 6,400 Net Position—Net Investment in Capital Assets 17,684,376 Net Position—Restricted for Public Safety 15,000 Net Position—Unrestricted 573,902 Totals $24,945,972 $24,945,972
Before closing the City of Smithville it is recommended that you save a backup copy of your work to another location by clicking on [File] and [Save As] for Windows and Mac. Click on “Export my Project” if you are using the Chromebook version.
Chapter 3 Recording the Annual Budget
The following budget for the General Fund of the City of Smithville was legally adopted for the fiscal year ending December 31, 2020.
Estimated Revenues: Taxes: Real Property $1,841,126 Sales 1,578,000 Interest and Penalties on Taxes 37,000 Licenses and Permits 500,000 Fines and Forfeits 210,000 Intergovernmental Revenue 789,000 Charges for Services 624,720 Miscellaneous Revenues 91,300 Total Estimated Revenues $5,671,146
Appropriations: General Government $1,169,500 Public Safety 2,206,000 Public Works 834,000 Health and Welfare 700,000 Culture and Recreation 660,500 Total Appropriations $5,570,000
Estimated Other Financing Sources and Uses: Interfund Transfers Out $ 17,500
Required
When you have finished entering the estimated revenue detail information, verify that the correct total amount is shown in the Detail Journal, then click on [Add entry and return to Journal] and the total estimated revenues will be entered in the general journal Estimated Revenues control account. Follow the same procedure to record the budget detail for Appropriations. To complete this entry debit or credit Budgetary Fund Balance as appropriate to balance the budgetary entry.
To finish recording the budget debit Budgetary Fund Balance and credit Estimated Other Financing Uses—Interfund Transfer Out for $17,500. Note that budgetary entries have no effect on governmental activities at the government-wide level and thus the budget information is only recorded in the General Fund.
When you are satisfied you have made the entries correctly, post them to the general ledger by clicking on [Post entries]. Before posting, or after unposting as described previously, you can edit, delete or insert entries in the journal by placing the cursor in the line you want to adjust and then right-clicking. Note that the “Insert Entry” function will work if you are inserting an entry prior to a balance sheet account. However, it will not work when inserting an entry prior to any account that has an associated subsidiary ledger (e.g., estimated revenues, expenditures).
Before closing the City of Smithville it is recommended that you save a backup copy of your work to another location by clicking on [File] and [Save As] for Windows and Mac. Click on “Export my Project” if you are using the Chromebook version.
Chapter 4 Recording Operating Transactions Affecting the General Fund and Governmental Activities at the Government-wide Level
Presented below are a number of transactions for the City of Smithville that occurred during fiscal year 2020, the year for which the budget given in Chapter 3 was recorded. Read all instructions carefully.
For each entry affecting budgetary accounts or operating statement accounts, you will be directed to the Detail Journal to allow you to record the appropriate amounts in the detail budgetary or actual accounts, as was the case in Chapter 3.
1. [Para. 4-a-1] On January 2, 2020, real property taxes were levied for the year in the amount of $1,878,700. It was estimated that 2 percent of the levy would be uncollectible.
Required: Record this transaction in both the General Fund and governmental activities journal. (Note: Type 4-a-1 as the paragraph number in the [Add description] field for this entry; 4-a-2 for the next transaction, etc. Careful referencing by paragraph number is very helpful should you need to determine where you may have omitted a required journal entry or made an error.) For the General Fund you will be directed to the Detail Journal. Select “Accrued Revenue” in the drop down [Description] menu in the Detail Journal related to the General Fund entry.
General Government $ 193,220 Public Safety 442,900 Public Works 208,300 Health and Welfare 154,295 Culture and Recreation 143,580 Total $1,142,295
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Chapter 7 Recording Transactions Affecting the Enterprise Fund and Business-type Activities
The City of Smithville accounts for its solid waste collection and disposal activities in an enterprise fund. The balance sheet for the Solid Waste Disposal Fund as of December 31, 2019 appears below.
CITY OF SMITHVILLE
Solid Waste Disposal Fund
Post-closing Trial Balance
As of December 31, 2019
Account Title Debits Credits
Cash $ 265,000
Customer Accounts Receivable 117,100
Allowance for Doubtful Accounts $ 6,140
Due from Other Funds 6,400
Inventories 54,060
Land 600,000
Buildings 1,650,000
Accumulated Depreciation—Buildings 791,250
Equipment 1,340,400
Accumulated Depreciation—Equipment 755,640
Vouchers Payable 45,180
Due to Other Funds 12,000
Accrued Payroll and Fringe Benefits 166,720
Net Position—Net Investment in Capital Assets 2,043,510
Net Position—Unrestricted 212,520
Totals $4,032,960 $4,032,960
Required
- Open a general journal as of December 31, 2019, for the Solid Waste Disposal Fund by entering each of the accounts and amounts shown in the above post-closing trial balance. Enter 2019 from the drop-down [Year] menu. Each of the account titles will be found in the drop down menu [Account] in the [Journal] view of the program. Be sure to enter 7-a as your paragraph number in the [Add description] field and enter the appropriate paragraph number for all subsequent journal entries. Verify the accuracy of your journal entry and post it to the general ledger by clicking [Post entries]. Unless your instructor specifies electronic submission, print a post-closing trial balance as of December 31, 2019, and retain it in your cumulative file until directed by your instructor to submit it.
Entries in this enterprise fund are not recorded at the government-wide level since enterprise funds and business-type activities at the government-wide level both use the same (accrual) basis of accounting and same (economic resources) measurement focus. Thus, the same information recorded in the accounts of the enterprise fund can also, with only slight modification, be reported as business-type activities at the government-wide level.
- Record the following events and transactions, which occurred during the year ended December 31, 2020. Be sure that 2020 appears in the [Year] menu.
- [Para. 7-b-1] Billings to customers for Charges for Services of the Solid Waste Disposal Fund totaled $2,584,662 for the year, including $18,200 billed to City of Smithville departments accounted for in the General Fund. For the amount billed to City of Smithville departments you should debit Due from Other Funds.
- [Para. 7-b-2] Equipment costing $395,300 was purchased on July 1, 2020. Cash in the amount of $195,300 was paid at the time of purchase; the vendor accepted revenue anticipation notes in the amount of $200,000 to finance the remainder of the equipment. Of this amount, $100,000 of the notes will be payable on July 1, 2021; the other $100,000 will be payable on July 1, 2022. All notes bear interest at the rate of 3.5 percent per year. Record only the purchase and the related payment of cash and issuance of notes at this time; interest will be recorded in a later transaction.
- [Para. 7-b-3] Vouchers for materials and supplies to be used in the operations of the fund were issued in the total amount of $896,320 (debit Inventories).
- [Para. 7-b-4] Collections from customers totaled $2,551,541 during 2020. This amount included $21,800 collected from the General Fund (see 7-a balance and 7-b-1 above).
- [Para. 7-b-5] Payrolls and fringe benefits paid in cash during the year totaled $1,463,379 including the amount accrued at December 31, 2019.
- [Para. 7-b-6] Accrued salaries and fringe benefits at year-end amounted to $175,264. Inventories of materials and supplies used in operations during the year amounted to $875,797, at cost.
- [Para. 7-b-7] Vouchers in the amount of $848,600 and the amount Due to Other Funds were paid during the year.
- [Para. 7-b-8] The city uses the following annual straight-line depreciation rates: Buildings, 2.5 percent; Equipment, 10 percent (equipment purchased during the year need not be depreciated because it was not held for more than 6 months of the year). Apply these rates to the original cost of buildings and equipment as of December 31, 2019, assuming no residual or salvage value.
- [Para. 7-b-9] Interest of $3,500 had accrued on the notes payable as of year-end (see transaction 7-b-2).
- [Para. 7-b-10] Management decided to increase the allowance for doubtful accounts by $960 at year-end.
- After verifying the accuracy of all entries for the preceding transactions, post amounts to the general ledger accounts by clicking [Post entries].
- Prepare entries to close all operating statement accounts at the end of 2020 and to reclassify the two net position accounts, as appropriate. Be sure that the check mark for [Closing Entry] is on for each account being closed and that “Closing Entries” appears next to the [Add credit] field. When completed, post the closing entries to the general ledger by clicking [Post entries].
- Click on [File>Export] to export a post-closing trial balance for year 2020, and use Excel to prepare a statement of net position (see Illustration 7-6 in textbook) for the Solid Waste Disposal Fund as of December 31, 2020.
- Export a pre-closing trial balance for year 2020, and use Excel to prepare a statement of revenues, expenses, and changes in net position (see Illustration 7-7 in textbook) for the Solid Waste Disposal Fund for the year ended December 31, 2020. Interest expense should be considered a nonoperating item.
- Use the post-closing trial balance for year 2019 from Part a of this chapter and the trial balances from parts d and e above to prepare and save an Excel version statement of cash flows (see Illustration 7-8 in textbook) for the Solid Waste Disposal Fund for the year ended December 31, 2020.
[Note: Copy all the Excel exports to the appropriate tab in your Excel Project Workbook]
Before closing the City of Smithville it is recommended that you save a backup copy of your work to another location by clicking on [File] and [Save As] for Windows and Mac. Click on “Export my Project” if you are using the Chromebook version.
Chapter 8 Recording Transactions Affecting a Fiduciary Fund—a Tax Custodial Fund
The City of Smithville administers a tax custodial fund that bills and collects property taxes levied by the governing bodies of the Smithville Consolidated School District (CSD), Smith County, and the Smith County Fire Protection District (FPD), in addition to those levied by the City of Smithville for its General Fund. (Note: Beginning in FY 2021, the tax custodial fund will also account for property tax billing and collection for the City of Smithville’s debt service fund. That fund will not levy property taxes for FY 2020.) As permitted by state law, the City of Smithville charges a collection fee of 1 percent of all taxes collected for the other governments.
CITY OF SMITHVILLE
Tax Custodial Fund
Post-closing Trial Balance
As of December 31, 2019
Account Title Debits Credits
Taxes Receivable for Other Funds and $1,977,075
Governments—Delinquent (including
related interest and penalties)
Due to Other Funds and Governments $1,977,075
Totals $1,977,075 $1,977,075
Required
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- Open a general journal as of December 31, 2019, for the Tax Custodial Fund by entering the two accounts and amounts shown in the above post-closing trial balance. Enter 2020 from the drop-down [Year] menu. Each of the account titles will be found in the drop down menu [Account] in the [Journal] view of the program. Be sure to enter 8-a as your paragraph number in the [Add description] field. Verify the accuracy of your journal entry and post it to the general ledger by clicking [Post entries]. Unless your instructor specifies electronic submission, print a post-closing trial balance as of December 31, 2019 and retain it in your cumulative file until directed by your instructor to submit it.
[Note: Entries in this fund are not recorded at the government-wide level. Fiduciary activity information is reported only in the fiduciary fund statements and not at the government-wide level.]
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- The following schedule shows the tax rates that have been established by the various taxing authorities for fiscal year 2020.
Tax Rates Applicable to Governments
Served by the Tax Custodial Fund
Fiscal Year 2020
(All amounts rounded to next higher dollar)
Tax Rate
(Per $100 Assessed Tax
Governments/Funds of Assessed Valuation) Valuation Levy
City of Smithville:
General Fund $0.58 $323,913,790 $1,878,700
Total city rate and levy $0.58 $1,878,700
Smithville CSD:
General Fund $2.40 $370,931,790 $8,902,363
Debt service fund 0.12 445,119
Total CSD rate and levy $2.52 $9,347,482
Smith County:
General Fund $0.30 $370,931,790 $1,112,796 County Road and Bridge Fund 0.32 1,186,982
Total county rate and levy $0.62 $2,299,778
Smith County FPD:
General Fund $0.95 $155,336,546 $1,475,698
Fire Station Construction Fund 0.30 466,010
Total county FPD rate and levy $1.25 $1,941,708
Grand Total tax rates and levies* $4.97 $15,467,668
* Note: Each property owner will receive a tax bill equal to the tax rates of all taxing authorities that have jurisdiction over his/her property times the assessed valuation of his/her property. Shown above are the aggregate taxes levied by each government, which are also the total amounts billed by the Tax Custodial Fund to all taxpayers in each jurisdiction.
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Solution: ACG6506 Instructions City of Smithville soution 18th edition