worksheetEnter all amounts as positive numbers. The worksheet is formatted to add debits to assets & expenses and add credits to revenues, liabilities & equity#Journal Entriesdebitscredits (enter as negatives)Gov'tal Fund Balances Adjustments & EliminationsBalances for Gov't-wide Stmtstype accounts to be debited hereDebitsCreditstype accounts to be credited hereDEBITS:Cash2,123,2492,123,249Taxes Receivable, net559,000559,000Inventories116,000116,000Capital Assets (net)--Expenditures (expenses) Current General Govt. Operations1,490,5011,490,501 Public Safety1,495,0001,495,000 Education1,115,0001,115,000Other Expenditures (expenses) - Debt Service Principal93,75093,750 - Interest (expenditure/expense)187,500187,500 - Capital Outlay1,250,0001,250,000 - Depreciation-Other Fin. Uses - Transfers Out911,250911,250Total Debits9,341,2509,341,250CREDITS:Accounts Payable35,00035,000Due to Other Funds115,000115,000Contracts Payable400,000400,000Accrued Interest Payable-Short Term Notes Payable300,000300,000Bonds Payable-Premium on Bonds---RevenuesProperty Taxes3,589,0003,589,000Sales Taxes838,000838,000Interest-Fees, Licenses & Permits312,000312,000Miscellaneous80,00080,000Intergovernmental Grant for - General Gov't Operations450,000450,000-Other Financing SourcesProceeds of Bonds2,500,0002,500,000Premium on Bonds80,00080,000Transfers In611,250611,250Net Position at beginning of year31,00031,000Total Credits9,341,2509,341,250 column totals for JE's000
Worksheet to convert Governmental fund basis information to accrual basis
ActivityProgram RevenuesNet (Expense) Revenue and Change in Net PositionExpensesCharges for ServicesOperational Grants and ContributionsCapital Grants and ContributionsGovernmental ActivitiesBusiness-Type ActivitiesTotalFunctions/ProgramsGovernmental Activities: General Government$ -$ - Public Safety-- Education-- Interest-- Depreciation-- Total Governmental Activities------Business Type Activities Water and Sewer-- Total Government$ -$ -$ -$ -$ -$ --General RevenuesTaxes: Property Taxes- Sales Taxes- Fees, Licenses and Permits-Transfers -Enter transfers out as negative and transfers in as positive amounts Total General Revenues---Change in Net Position---Net Position, Beginning--Net Position, Ending$ -$ -$ -
PROVINCE OF EUROPA
STATEMENT OF ACTIVITIES GOVERNMENT-WIDE BASIS
FOR THE YEAR ENDED DECEMBER 31, 2091
Net positionGovernmental ActivitiesBusiness-Type ActivitiesTotalAssetsCash$ -Accounts Receivable (Net)-Taxes Receivable (Net)-Internal Balances Current-Enter payables to other funds as negative, receivables as positve amountsInventories-Capital Assets, Net of Accumulated Depreciation- Total Assets$ -$ -$ -LiabilitiesAccounts Payable-Contracts Payable-Accrued Interest Payable-Short Term Notes Payable-General Obligation Bonds Payable-Premium on Bonds Sold- Total Liabilities---Net PositionNet Investment in Capital As.
worksheetEnter all amounts as positive numbers. The worksheet is .docx
1. worksheetEnter all amounts as positive numbers. The
worksheet is formatted to add debits to assets & expenses and
add credits to revenues, liabilities & equity#Journal
Entriesdebitscredits (enter as negatives)Gov'tal Fund Balances
Adjustments & EliminationsBalances for Gov't-wide Stmtstype
accounts to be debited hereDebitsCreditstype accounts to be
credited hereDEBITS:Cash2,123,2492,123,249Taxes
Receivable,
net559,000559,000Inventories116,000116,000Capital Assets
(net)--Expenditures (expenses) Current General Govt.
Operations1,490,5011,490,501 Public Safety1,495,0001,495,000
Education1,115,0001,115,000Other Expenditures (expenses) -
Debt Service Principal93,75093,750 - Interest
(expenditure/expense)187,500187,500 - Capital
Outlay1,250,0001,250,000 - Depreciation-Other Fin. Uses -
Transfers Out911,250911,250Total
Debits9,341,2509,341,250CREDITS:Accounts
Payable35,00035,000Due to Other
Funds115,000115,000Contracts Payable400,000400,000Accrued
Interest Payable-Short Term Notes
Payable300,000300,000Bonds Payable-Premium on Bonds---
RevenuesProperty Taxes3,589,0003,589,000Sales
Taxes838,000838,000Interest-Fees, Licenses &
Permits312,000312,000Miscellaneous80,00080,000Intergovern
mental Grant for - General Gov't
Operations450,000450,000-Other Financing SourcesProceeds of
Bonds2,500,0002,500,000Premium on
Bonds80,00080,000Transfers In611,250611,250Net Position at
beginning of year31,00031,000Total Credits9,341,2509,341,250
column totals for JE's000
Worksheet to convert Governmental fund basis information to
accrual basis
2. ActivityProgram RevenuesNet (Expense) Revenue and Change
in Net PositionExpensesCharges for ServicesOperational Grants
and ContributionsCapital Grants and
ContributionsGovernmental ActivitiesBusiness-Type
ActivitiesTotalFunctions/ProgramsGovernmental Activities:
General Government$ -$ - Public Safety-- Education--
Interest-- Depreciation-- Total Governmental Activities-----
-Business Type Activities Water and Sewer-- Total
Government$ -$ -$ -$ -$ -$ --General RevenuesTaxes:
Property Taxes- Sales Taxes- Fees, Licenses and Permits-
Transfers -Enter transfers out as negative and transfers in as
positive amounts Total General Revenues---Change in Net
Position---Net Position, Beginning--Net Position, Ending$ -$
-$ -
PROVINCE OF EUROPA
STATEMENT OF ACTIVITIES GOVERNMENT-WIDE BASIS
FOR THE YEAR ENDED DECEMBER 31, 2091
Net positionGovernmental ActivitiesBusiness-Type
ActivitiesTotalAssetsCash$ -Accounts Receivable (Net)-Taxes
Receivable (Net)-Internal Balances Current-Enter payables to
other funds as negative, receivables as positve
amountsInventories-Capital Assets, Net of Accumulated
Depreciation- Total Assets$ -$ -$ -
LiabilitiesAccounts Payable-Contracts Payable-Accrued Interest
Payable-Short Term Notes Payable-General Obligation Bonds
Payable-Premium on Bonds Sold- Total Liabilities---
Net PositionNet Investment in Capital Assets---Unrestricted---
Total Net Position$ -$ -$ -
PROVINCE OF EUROPA
STATEMENT OF NET POSITION
AS OF DECEMBER 31, 2091
Enterprise fundJournal EntriesdebitscreditsDUE FROM3Feb.
1Cash300,000 CASH OTHER FUNDS
3. SUPPLIESACCOUNTS RECEIVABLETransfer in - capital
contribution300,000bb-bb-bb-bb-To record contribution from
GF----ALLOWANCE FORUNCOLLECTIBLE
ACCTSBUILDINGS & STRUCTEQUIPMENTGEOTHERMAL
GENERATORS-
bbbb450,000bb150,000bb650,000450,000150,000650,000-
ACCUMULATED DEPRACCUMULATED
DEPRACCUMULATED DEPRBUILDINGS & STRUCTEQUIP
& MACHINERYGEOTHERMAL GENERATORSbbbbbb---
ACCOUNTS PAYABLECONTRACTS PAYABLEINTEREST
PAYABLEST NOTE PAYABLE-bb-bb-bbbb----BONDS
PAYABLENET POSITION OPERATING REVENUE:
OPERATING EXPENSES1,250,000bbbbCHARGES FOR
SERVICES SALARIES EXPENSE1,250,000---OPERATING
EXPENSESOPERATING EXPENSES NONOPERATING
EXPENSESTRANSFER IN - SUPPLIES
EXPENSEDEPRECIATION EXPENSE
INTERESTCAPITAL CONTRIBUTIONS----T.
Debits1,250,000T. Credits1,250,000-
&"Arial Rounded MT Bold,Regular"&16ENTERPRISE FUND -
GENERAL LEDGER
ActivityBusiness-Type Activities: Enterprise Funds - Electricity
and WaterOperating Revenues Charges for Services Total
Current Assets- Operating Expenses Salaries Supplies
Depreciation Total Operating ExpensesNoncurrent
Assets-Operting Income- Nonoperating Revenues (Expenses)
Interest ExpenseExpenses entered as negative amountsIncome
before Contributions-Capital ContibutionsChange in Net
Position-Net Position, January 1, 2091-Net Position, December
31, 2091$ -
PROVINCE OF EUROPA
STATEMENT OF REVENUES, EXPENSES, AND CHANGES
IN FUND NET POSITION
PROPRIETARY FUNDS
FOR THE YEAR ENDED DECEMBER 31, 2091
4. Balance SheetBusiness-Type Activities: Enterprise Funds -
Electricity and WaterAssetsCurrent AssetsCashCustomer
Accounts Receivable (gross) Less: Allowance Uncollectible
AccountsDue from General FundInventories Total Current
Assets-Noncurrent AssetsBuildings and Structures Less:
Accumulated DepreciationEquipment and Machinery Less:
Accumulated DepreciationGeothermal Generators Less:
Accumulated Depreciation Total Noncurrent Assets-
Total Assets$ -LiabilitiesCurrent LiabilitiesAccounts
PayableContracts Payable Interest PayableShort Term Note
Payable Total Current Liabilities-Noncurrent
LiabilitiesRevenue Bonds Payable Total Noncurrent
Liabilities- Total Liabilities-Net PositionNet
Investment in Capital Assets-Unrestricted- Total Net
Position$ -
PROVINCE OF EUROPA
STATEMENT OF NET POSITION
PROPRIETARY FUNDS
AS OF DECEMBER 31, 2091
Cash FlowBusiness-Type Activities: Enterprise Funds -
Electricity and WaterCash Flows from Operating Activities
Cash Received from Customers Cash Paid for Supplies Cash
Paid to EmployeesNet Cash Provided by Operating Activities-
Cash Flows from Non-Capital Related Financing Activities
Borrowing for OperationsNet Cash Provided by Non-Capital
Related Financing Activities-Cash Flows from Capital Related
Financing Activities Acquisition of Capital Assets Contributed
Capital from General FundNet Cash Used in Capital Related
Financing Activities- Cash Flows from Investing ActivitiesNet
Cash Provided from Investing Activities-Net Increase in Cash-
Cash and Cash Equivalents, January 1, 2091-Cash and Cash
Equivalents, December 31, 2091$ -Reconciliation of Operating
Income to Net Cash Provided by Operating Activities Operating
IncomeAdjustments to Reconcile Operating Income to Net Cash
5. Provided by Operating Actitities Depreciation (Increase)
Decrease in Customer Accounts Receivable- net
(Increase)Decrease in Interfund Receivables (Increase)
Decrease in Inventories Increase (Decrease) in Accounts
PayableNet Cash Provided by Operating Activities$ -Noncash
Investing, Capital and Non-capital Related Financing Activities
Acquisition of building through contracts payable
PROVINCE OF EUROPA
STATEMENT OF CASH FLOWS
PROPRIETARY FUNDS
FOR THE YEAR ENDED DECEMBER 31, 2091
General Fund#dateJournal Entriesdebitscredits
CASH1Jan. 1Encumbrances11,806bb18,000ALLOWANCE FOR
Budgetary Fund Balance Reserve for
Encumbrances11,806TAXES RECEIVABLEUNCOLLECTIBLE
TAXES SUPPLIESadditional debit accountTo re-establish
outstanding encumbrances bb--bbbb13,000--13,000-18,000
SHORT-TERM DUE TO (total)additional credit
accountACCOUNTS PAYABLE NOTE PAYABLEOTHER
FUNDSFUND BALANCE-bb-bb-bb31,000bb----31,000FEES,
LICENSES &INTERGOVERNMENTALEDUCATION
PROGRAM RESERVE FOR
ENCUMBRANCESPROPERTY TAX REVENUESALES TAX
REVENUEPERMITS REVENUE REVENUESFEE
REVENUE-----GENERAL GOVERNMENTPUBLIC
SAFETYEDUCATIONOTHER FINANCINGOTHER
FINANCING USES
EXPENDITURESEXPENDITURESEXPENDITURES
SOURCESTRANSFERS OUT-----BUDGETARY
ACCOUNTSESTIMATED OTHER
BUDGETARYESTIMATED
REVENUESAPPROPRIATIONSFINANCING USESFUND
BALANCE---- BUDGETARY FUND
BALANCEENCUMBRANCES RESERVE FOR
6. ENCUMBRANCES-bb111,80611,806111,80611,806T.
Debits42,806T. Credits42,806-
&"Arial Rounded MT Bold,Regular"&18General Fund - General
Ledger
Debt Service#dateJournal EntriesdebitscreditsDEBT SERVICE
FUND GENERAL LEDGERtype accounts to be debited heretype
accounts to be credited here CASHFUND
BALANCEbb--bb--OTHER FINANCING SOURCES
EXPENDITURESEXPENDITURES TRANSFERS INBOND
PRINCIPALBOND INTEREST---T. Debits-T. Credits-
Capital Projects#dateJournal EntriesdebitscreditsCAPITAL
PROJECTS FUND GENERAL LEDGERtype accounts to be
debited heretype accounts to be credited hereDUE FROM
OTHER CASH FUNDSCONTRACTS PAYABLEbb-
bb--bb--- (Beginning) CAPITALOTHER FINANCING
USESFUND BALANCEEXPENDITURESTRANSFERS OUT-
bb---OTHER FINANCING SOURCESOTHER FINANCING
SOURCESOTHER FINANCING SOURCES TRANSFERS
INPROCEEDS OF BONDSPREMIUM ON BONDS---
BUDGETARY ACCOUNTS BUDGETARY FUND
BALANCE RESERVE FOR
ENCUMBRANCESENCUMBRANCES-bb--T. Debits-T.
Credits-
Account Groups#dateJournal EntriesdebitscreditsGENERAL
FIXED ASSET ACCOUNT GROUPtype accounts to be debited
heretype accounts to be credited
hereCONSTRUCTIONBUILDINGS & STRUCTEQUIPMENT
IN PROCESSbb1,395,000bb480,000bb-1,395,000480,000-
ACCUMULATED DEPRACCUMULATED
DEPRINVESTMENT INBUILDINGS & STRUCTEQUIP &
MACHINERYGEN. FIXED ASSETSbbbb1,875,000bb--
1,875,000GENERAL LONG-TERM DEBT ACCOUNT
GROUPAMOUNT TO BEPROVIDED FOR DEBTBOND
PREMIUMBONDS
PAYABLEbb1,875,000bb1,875,000bb1,875,000-1,875,000T.
7. Debits3,750,000T. Credits3,750,000
Activity StatementGeneralDebt ServiceCapital ProjectsTotal
Governmental FundsRevenuesProperty Taxes$ -Sales Taxes-
Fees, Licenses and Permits-Intergovernmental Revenues-
Education Program Fee Revenues- Total Revenues----
ExpendituresCurrent: General Government Operations- Public
Safety- Education-Capital Outlay-Debt Service- Principal-
Interest- Total Expenditures----Excess (Deficiency) of
Revenues Over Expenditures----Other Financing Sources
(Uses)-Proceeds of Bonds-Premium on Bonds Sold-Transfers
In-Transfers Out-Enter transfers out as negative and transfers in
as positive amounts Total Other Financing Sources
(Uses)----Net Change in Fund Balance----Fund Balance, January
1, 2091---Fund Balance, December 31, 2091$ -$ -$ -$ -
PROVINCE OF EUROPA
GOVERNMENTAL FUNDS
STATEMENT OF REVENUES, EXPENDITURES, AND
CHANGES IN FUND BALANCE
FOR THE YEAR ENDED DECEMBER 31, 2091
Balance SheetGeneralDebt ServiceCapital ProjectsTotal
Governmental FundsAssetsCash$ -Taxes Reveivable - Gross -
Less: Allowance uncollectibles taxes-Supplies Inventory-
Total Assets$ -$ -$ -$ -Liabilities and Fund
EquityLiabilitiesAccounts Payable$ -Contracts Payable-Short
Term Notes Payable-Due to Other funds- Total
Liabilities----Fund BalancesNonspendable - supplies-Committed
- contractual obligations-Assigned for:- Debt Service-
Capital Acquisitions-Unassigned- Total Fund
Balance---- Total Liabilities and Fund Equity$ -$ -
$ -$ -
PROVICE OF EUROPA
GOVERNMENTAL FUNDS
BALANCE SHEET
AS OF DECEMBER 31, 2091
8. Budget Budgeted AmountsOriginalFinalActual Amounts
(Budgetary Basis)Variance with Final BudgetRevenuesProperty
Taxes$ -Sales Taxes-Fees, Licenses and Permits-
Intergovernmental Revenues-Education Program Fee Revenues-
Total Revenues----ExpendituresCurrent year Expenditures &
Encumbrances: General Government Operations- Public
Safety- Education-- Total Expenditures----Excess
(Deficiency) of Revenues Over Expenditures----Other Financing
Sources (Uses)-Transfers Out- Total Other Financing
Sources (Uses)----Net Change in Fund Balance$ -$ -$ -$ -
Reconciliation:Excess of 2090 Reserved for Encumbrances over
Related Actual Expenditure in 2091Reserve for encumbrances,
December 31, 2091Unassigned Fund Balance, January 1,
2091Total fund balance less encumbrances at 12/31/2090Total
fund balance, December 31, 2091$ -
PROVINCE OF EUROPA
STATEMENT OF REVENUES, EXPENDITURES, AND
CHANGES IN FUND BALANCE - BUDGET AND ACTUAL
GENERAL FUND
FOR THE YEAR ENDED DECEMBER 31, 2091
GOVERNMENTAL ACCOUNTING PRACTICE SET
Part A due:
Part B due:
Introduction
The date is December 31, 2091. You have just risen from a
three month cryogenic sleep during which you traveled from
Earth to Europa, the only inhabited moon of Jupiter.
Europa has been colonized since the early 2060's. To encourage
development the United Earth Council (roughly equivalent to a
9. federal government for the planet Earth) gave land grants to
colonists willing to leave Earth and settle this new world. The
Council also built a series of water purification and power
generating plants. These plants utilize the natural geothermal
resources of Europa to generate electrical power.
Most of the inhabitants are engaged in the operation of the
quarter million acre farms which span the temperate zones on
either side of the equator. The labor is performed by robots
through a centralized computer under the direction of the
owner/farmer and family members. Harvests are transported by
freighter to Earth. It is lonely, although profitable life with an
average of 10 harvests per Earth year. All banking is performed
on Earth through electronic funds transfers. A substantial
business sector has developed, servicing the farming operations.
After several decades of hard work the inhabitants of Europa
are beginning to enjoy the rewards of their labors and are
seeking some of the services which can only be provided by a
local centralized government. They naturally sought to
establish this government on Europa and petitioned the United
Earth Council for admission to the Council as a member
province (roughly equivalent to the 20th century state
governments).
Province status was granted by a vote of the Council and the
citizens of Europa acted quickly to organize their new
government, which officially began operations on January 1,
2091. One of the tasks facing the new government was to hire
qualified people to carry on the day to day business of the
government. You represent one of these people, having been
highly trained in the subtleties of governmental accounting.
Ownership of public facilities which were constructed by the
United Earth Council (Buildings, roads & the electrical power
utility) was transferred to the new province as of midnight on
12‑31‑2090. In return, the Province issued long‑term bonds
10. payable which provide for interest and principle payments to the
United Earth Council over the next 20 years.
Having no qualified governmental accountants on Europa, the
province administrator has simply made notes summarizing the
transactions which have occurred since the beginning of
operations. Your task is to establish a fund accounting system,
prepare summary journal entries recording all transactions, and
prepare the year end 12‑31‑2091 financial statements for the
Province.
** Report:
Your completed projects should include (in this order):
Part A:
1. Cover sheet with names of group members
2. Fund-basis financial statements, including a Budget
Comparison Statement for the General Fund.
3. Ledgers (t-accounts) with journal entries for each fund and
account group
Part B:
1. Cover sheet with names of group members
2. Government-wide Financial Statements
3. Worksheets and journal entries for the governmental
activities portion of the Government-wide financial statements
Check figures:
General fund cash:
11. $ 143,249
General fund unassigned fund balance
85,229
Governmental funds: Total fund balance 1,948,249
Enterprise fund cash:
69,500
Enterprise fund net position:
54,183
A set of Excel templates (Excel) are available for your use.
Please turn in the printed copy of each worksheet.
PROVINCE OF EUROPA
Transaction list
for the year ended December 31, 2091
Account Structure:
Because the Province has a limited number of revenue sources,
revenue control accounts are not used. Rather, General Fund
revenues are directly recorded into the following accounts
(property taxes, sales taxes, fees licenses and permits, program
fees, and intergovernmental grants) Similarly, expenditures are
recorded directly into the following accounts: (general
government operations, public safety, education, capital outlay,
12. and debt service: principal and interest).
The Province established the Bureau of Electricity and Water to
operate as an enterprise fund. The enterprise fund reports
expenses by object category using the following account titles:
(salaries, supplies, depreciation, and interest).
There are no fiduciary, special revenue, permanent, or internal
service funds. The government uses account groups to record
general fixed assets and general long-term debt.
Beginning Balances:
1. At 12-31-2090, the remaining cash and supplies on hand in
the government offices were transferred to the new Province
government. The opening trial balance for the Province for 1-1-
2091 was as follows:
GENERAL FUND
trial balance
Jan. 1, 2091
debitscredits
Cash
18,000 Fund Balance:
Supplies 13,000 Assigned (Reserved
for encumbrances
)
11,806
_______ Unassigned
13. 19,194
31,000
31,000
The supplies were office supplies for general government
operations. The reserve for encumbrances relates to a
purchase order placed in December of 2090 for engineering
services (see item # 7,below). The Province honors outstanding
encumbrances from previous years and the encumbrance should
be re-established for 2091. For purposes of the Budgetary
Comparison Statement, amounts are charged to the budget in the
year they are initially encumbered, regardless of when the
expenditure is incurred.
2. On December 31, 2090, the United Earth Council (U.E.C.)
transferred the fixed assets which have been constructed with
U.E.C. funds. The Province Council assigned custody of these
assets to the general Province government and the Bureau of
Electricity and Water as follows:
Useful Salvage
Government Bureau Life Value
Buildings, roads, and
other structures $1,395,000 $ 450,000 10 $ 0
Equipment 480,000 150,000 5 0
14. Geothermal Generators 0 650,000 5 0
Total $1,875,000 $1,250,000
========== ==========
In return for these assets, the Province government issued
$1,875,000, 10 percent general obligation serial bonds.
Principal payments of $93,750 and interest payments on the
bonds are to be paid at the end of each year starting on
December 31, 2091.
Similarly, the Bureau of Electricity and Water issued (at face
value) $1,250,000, 10 percent long-term revenue bonds in
exchange for the capital assets listed above. The bonds call for
annual interest payments on January 1 and mature on January 1,
2101. Since these events occurred on the last day of 2090, they
represent beginning balances for 2091.
Current Year Transactions:
3. The government of the Europa Province established the
Bureau of Electricity and Water. The Bureau of Electricity and
Water is in charge of providing the power and water for
residents and the Province government. On January 1, 2091, the
Province government agreed to contribute $300,000 for
establishment of the Bureau of Electricity and Water, and
transferred cash on February 1, 2091.
4. On January 1, 2091, The Province Council approved budgets
for 2091 as follows:
15. Budget Items
Province Government (General Fund)
Capital Additions
Bureau of Electricity and Water
Revenue and other financing sources
Property Taxes
Sales Taxes
Fees, Licenses and Permits
Charges for Services (Bureau)
Program Fees: Education
Intergovernmental grants
Transfer from General Fund
Proceeds from Bond Issues
$3,720,000
750,000
250,000
70,000
470,000
$ 250,000
2,500,000
$3,250,000
16. 300,000
1,250,000
Budget continued on next page
Expenditures/expenses and other
financing uses:
General government operations
Public Safety
Education
Operating expenses (Bureau)
Capital Outlays
Transfers to other funds
1,500,000
1,400,000
1,250,000
850,000
2,750,000
3,000,000
1,875,000
5. On January 10, 2091, a cash grant of $450,000 was received
from the United Earth Council for operation of the Province.
The grant provisions stipulate the funds are to be used for
general operations of the government.
6. On January 31, 2091, $3,700,000 in property taxes were
17. levied. Of this, $111,000 (3% of property taxes) is estimated to
be uncollectible. The remaining tax bills are expected to be
collected within 60 days following the end of the fiscal year.
During 2091, $3,030,000 was collected and $104,000 are
identified as uncollectible and written off.
7. On January 5, 2091 the engineering report ordered in
December of the previous year (see item 1 above) was received
along with an invoice for of $ 11,501. The invoice was
immediately paid. The engineering report was for general
government operations.
8. During 2091, the Province government placed orders
amounting to $940,000 for supplies. All the supplies ordered
were received during the year with an invoice price of $935,000
(there are no outstanding encumbrances for supplies). $900,000
was paid during the year. The supplies were distributed by
major functions of government as follows:
General Public
Operation Safety Education Total
Order placed
$ 390,000 $ 400,000 $ 150,000 $ 940,000
Invoice prices 395,000 400,000 140,000
935,000
The government uses the consumption method of recording
supplies – (i.e. expenditure is determined by the amount of
supplies used – not purchased – during a period).
18. 9. During 2091 the Bureau of Electricity and Water placed
orders amounting to $1,200,000 for supplies. The supplies were
received with an invoice price of $1,100,000. Of this
$1,045,000 was paid before year end.
10. The Province Council approved the construction of a new
school building at an estimated cost of $2,750,000. The
issuance of $2,500,000 in general obligation long-term bonds
was authorized to finance the cost of construction. In addition,
the Province government agreed to provide $250,000 for the
construction project.
11. On March 31, 2091, the Province government transferred
$250,000 to the school building capital project.
12. On April 1, 2091, $2,500,000 in 10 percent general
obligation long-term bonds were issued for $2,580,000. The
premium of $80,000 was reserved for redemption of the bonds
while the principal was set aside for construction of the school.
The bonds call for annual interest payments on March 31, and
mature on April 1, 2111.
13. On June 1, 2091, the school building contract was awarded
to the lowest bidder for $2,600,000, including planning and
architect's fees.
14. On November 30, 2091, the progress billings of $1,250,000
for the school building were received from the contractor and $
850,000 was paid on December 31, 2091. The remaining
balance is expected to be paid in January, 2092. Liabilities
resulting from capital additions are recorded in “Contracts
Payable”, (rather than Accounts Payable).
15. The Board of the Bureau of Electricity and Water approved
the construction of an office building at an estimated cost of
19. $880,000.
16. On July 1, 2091, the office building contract was signed in
the amount of $865,000, including planning and architect's fees.
17. On October 30, 2091, construction was completed and
$632,500 was paid on the contract. The remaining portion ($
232,500) will be paid following final inspection on January 15,
2092. Liabilities resulting from capital additions are recorded
in “Contracts Payable”, (rather than Accounts Payable)
18. At the end of November, ground transportation units were
ordered for the public safety department at an estimated cost of
$167,020. The units have not been delivered as of December 31,
2091.
19. During 2091, the Province government received the
following cash collections:
Sales taxes
$ 838,000
Permits, fees & licenses
312,000
Program Fees: Education 80,000
20. $1,230,000
=========
20. Salaries and wages of $4,150,000 were incurred and paid by
the Province government and the Bureau of Electricity and
Water during 2091. Salaries and wages are classified by
governmental functions as follows:
Incurred
& Paid
General operation
$ 837,000
21. Public safety 775,000
Education 725,000
Bureau of Electricity Water 1,813,000
Total
$ 4,150,000
============
21. During 2091, the Bureau of Electricity and Water billed the
Province government and the residents for electricity and water
services in the amounts of $920,000 and $2,120,000
respectively. The Bureau estimated that 2% of the gross
revenue from the residents will be uncollectible. During 2091,
$805,000 and $1,805,000 of the bills sent to the Province
government and the residents, respectively, are collected.
22. $18,500 of the bills sent to the residents are identified as
uncollectible and written off.
The electricity and water services provided to the Province
government were charged by government functions as follows:
General operation
$ 350,000
Public safety 320,000
Education 250,000
22. $281,250 was removed from general government funds and
set aside for payments on outstanding general obligation serial
bonds.
23. On December 31, 2091, the Province government made
principal payment of $93,750 and annual interest of $187,500
on the general obligation serial bonds.
24.
As of December 31, 2091, physical inventories of supplies on
hand report the following:
General operation
23. $ 116,000
Public safety 0
Education 0
Bureau of Electricity Water 14,000
25. On December 31, 2091, the Bureau of Electricity and Water
accrued annual interest on the 10% bonds ($1,250,000 face
value) described in item # 2.
26. The Province government and the Bureau of Electricity and
Water recorded depreciation for 2091 using the straight-line
method. The new office building is estimated to have zero
salvage value and 10-year useful life and is depreciated on a
monthly basis, beginning with the month (November) it was
placed in service.
27. On December 31, 2091 the Bureau of Electricity and Water
borrowed $650,000 on a 90 day note payable to cover a
temporary cash shortfall.
28. On December 31, 2091, $300,000 was borrowed on a 60 day
note payable to cover a temporary cash shortfall in general
government operations.
29. The bond premium is amortized using the straight-line basis
over 20 years. (9 months of amortization is recognized in
24. 2091).
30. For purposes of classifying fund balances in the
governmental funds, assume:
· Supplies are the only nonspendable resource,
· The outstanding encumbrances in the capital project fund are
classified as Committed by contractual obligation,
· The outstanding encumbrances in the General Fund are
classified as Assigned for capital asset acquisitions
· The residual balances of the debt service and capital projects
funds are classified as assigned.
31. Prepare closing entries, where appropriate
Entries required for Government-wide
financial statements.
A review of the governmental type transactions for the year
suggests the following worksheet journal entries
are necessary for preparation of the Government-wide
Statements:
1. The fixed assets and debt acquired in Transaction 2 should be
entered in the beginning balances column on the worksheet.
2. Capital expenditures should be eliminated.
3. Depreciation expense should be recorded.
4. Bond proceeds should be eliminated.
5. The premium on the 20 year bonds in Transaction 12 should
be amortized using the straight line method (9 months).
25. 6. Nine months of interest should be accrued on the bonds in
transaction 12.
7. Interfund transfers should be eliminated, but not the portion
paid to Business-type funds.
8. Expenditures for bond principal should be eliminated.
�(Prepare the journal entries and enter them on the worksheet
used to convert governmental funds to the accrual basis, but do
not post the entries in the journals of the funds.)
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