Instructions_Bingham_17ed 2016 Revised.doc
Table of Contents
Chapter 1
Introducing City of Bingham
Welcome………………………………………………………. 4
System Requirements
4
Licensing
4
Running or Removing Cities of Smithville and Bingham
Running the Cities of Smithville and Bingham
5
Removing the Cities of Smithville and Bingham
5
General Operating Instructions
Opening the Cities of Smithville and Bingham
5
Creating a new project
6
Opening an existing project
6
Saving the current project
7
City of Bingham Main Window
Adding and posting journal entries
8
Editing/deleting/unposting journal entries
8
Working with the ledgers screen
10
Working with the detail journal screen
10
Printing Reports
11
Exporting Trial Balances
12
Completing Chapters 2 through 11 of the
City of Bingham Cumulative Problem
12
Chapter 2 Opening the Books
13
Chapter 3 Recording the Annual Budget
17
Chapter 4 Recording Operating Transactions Affecting
the General Fund and Governmental Activities at the
Government-wide Level
19
Chapter 5 Recording Capital Asset Transactions
26
Chapter 6 Recording General Long-term Liabilities and
Debt ServiceTransactions
28
Chapter 7 Recording Enterprise Fund and
Business-type ActivitiesTransactions
33
Chapter 8 Recording Fiduciary FundTransactions —
Tax Agency Fund
39
Chapter 9 Adjusting and Closing Entries for
Governmental Activities, Government-wide Level;
Preparation of Government-wide and Major Fund
Financial Statements
41
Chapter 10 Analysis of Financial Condition
43
Chapter 11 Preparation of Audit Report
43
CHAPTER 1
INTRODUCING THE CITY OF BINGHAM
Welcome
Thank you for purchasing the Cities of Smithville and Bingham Governmental Accounting Software. This software is designed to be used with the McGraw-Hill textbook Accounting for Governmental and Nonprofit Entities, 17th Edition.
System Requirements
To use the Cities of Smithville and Bingham accounting software application, you must have the following:
· Windows
· 2.33GHz or faster x86-compatible processor, or Intel Atom™ 1.6GHz or faster processor for netbook class devices
· Microsoft® Windows Server 2008, Windows 7, or Windows 8 Classic
· 512MB of RAM (1GB recommended)
Mac OS
· Intel® Core™ Duo 1.83GHz or faster processor
· Mac OS X v10.7, and above
· 512MB of RAM (1GB recommended)
· Adobe AIR 15 or latest version
· Recommended screen resolution of 1024 x 768 minimum
· Spreadsheet program (in order to easily view the exported CSV files)
· Excel 2003 or later (in order to view the exported Excel files)
· Adobe Reader 9 or later to read saved report files
Licensing
This manual was written for use with the Cities of Smithville and Bingham software. The manual and the software described in it are copyrighted, with all rights reserved. This manual and the Cities of Smithville and Bingham software may not be copied, except as otherwise provided in your software license or as expressly permitted in writing by McGraw-Hill Higher Education.
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Instructions_Bingham_17ed 2016 Revised.docTable of Content.docx
1. Instructions_Bingham_17ed 2016 Revised.doc
Table of Contents
Chapter 1
Introducing City of Bingham
Welcome………………………………………………………. 4
System Requirements
4
Licensing
4
Running or Removing Cities of Smithville and Bingham
Running the Cities of Smithville and Bingham
5
Removing the Cities of Smithville and Bingham
5
General Operating Instructions
Opening the Cities of Smithville and Bingham
5
2. Creating a new project
6
Opening an existing project
6
Saving the current project
7
City of Bingham Main Window
Adding and posting journal entries
8
Editing/deleting/unposting journal entries
8
Working with the ledgers screen
10
Working with the detail journal screen
10
Printing Reports
11
Exporting Trial Balances
12
Completing Chapters 2 through 11 of the
City of Bingham Cumulative Problem
12
Chapter 2 Opening the Books
13
3. Chapter 3 Recording the Annual Budget
17
Chapter 4 Recording Operating Transactions Affecting
the General Fund and Governmental Activities at the
Government-wide Level
19
Chapter 5 Recording Capital Asset Transactions
26
Chapter 6 Recording General Long-term Liabilities and
Debt ServiceTransactions
28
Chapter 7 Recording Enterprise Fund and
Business-type ActivitiesTransactions
33
Chapter 8 Recording Fiduciary FundTransactions —
Tax Agency Fund
39
Chapter 9 Adjusting and Closing Entries for
Governmental Activities, Government-wide Level;
Preparation of Government-wide and Major Fund
Financial Statements
41
Chapter 10 Analysis of Financial Condition
43
Chapter 11 Preparation of Audit Report
43
CHAPTER 1
4. INTRODUCING THE CITY OF BINGHAM
Welcome
Thank you for purchasing the Cities of Smithville and Bingham
Governmental Accounting Software. This software is designed
to be used with the McGraw-Hill textbook Accounting for
Governmental and Nonprofit Entities, 17th Edition.
System Requirements
To use the Cities of Smithville and Bingham accounting
software application, you must have the following:
· Windows
· 2.33GHz or faster x86-compatible processor, or Intel Atom™
1.6GHz or faster processor for netbook class devices
· Microsoft® Windows Server 2008, Windows 7, or Windows 8
Classic
· 512MB of RAM (1GB recommended)
Mac OS
· Intel® Core™ Duo 1.83GHz or faster processor
· Mac OS X v10.7, and above
· 512MB of RAM (1GB recommended)
· Adobe AIR 15 or latest version
· Recommended screen resolution of 1024 x 768 minimum
· Spreadsheet program (in order to easily view the exported
CSV files)
· Excel 2003 or later (in order to view the exported Excel files)
· Adobe Reader 9 or later to read saved report files
Licensing
This manual was written for use with the Cities of Smithville
and Bingham software. The manual and the software described
in it are copyrighted, with all rights reserved. This manual and
5. the Cities of Smithville and Bingham software may not be
copied, except as otherwise provided in your software license or
as expressly permitted in writing by McGraw-Hill Higher
Education, Inc.
Use of the Cities of Smithville and Bingham governmental
accounting software (the “Software”) and its documentation are
governed by the terms set forth in your license. Such use is at
your sole risk. The software and its documentation (including
this manual) are provided “AS-IS” and without warranty of any
kind.
[Note: Read the following instructions before beginning your
first assignment in Chapter 2. Refer back to this information as
needed.]
RUNNING OR REMOVING THE Cities of Smithville and
BinghamRunning the Cities of Smithville and Bingham
The software application can be run by clicking on the “Cities
of Smithville and Bingham”icon/program as indicated in the
“Opening the Cities of Smithville and Bingham” instructions
below. Click “Install” and follow the installation prompts. It is
recommended to save this file in your Programs/Applications or
Desktop.
You may exit the program by clicking the "X" button at the top
right corner on a PC or top left corner on a MAC.
Removing the Cities of Smithville and Bingham
You can remove the software application by uninstalling the
“Cities ofSmithville and Bingham” program.GENERAL
OPERATING INSTRUCTIONS
Opening the Cities of Smithville and Bingham
You can open the Cities of Smithville and Bingham at any time
by clicking on the “Cities of Smithville and
Bingham”icon/program.Creating a New Project
6. To access the instructions for the Bingham project click on
Open Instructions in the opening window and select and print
the Binghamproject instructions file.To create a new project,
click on “Create New Project.” The Create New Project window
will appear, as shown below.
Enter your first and last name, then select City of Bingham as
your project and click [Create]. The main project window will
pop-up once the project is created and you will be ready to
begin entering journal entry data for your first assignment. This
step creates the accounts and funds that you will need to
complete the “City of Bingham” project. After you have
completed the journal entries for each assignment, you should
save your project data file in a folder that you have created on
your computer. For your own protection against hard-drive
failure or file corruption, we recommend that you create a dated
backup file on a removable device (e.g., flash drive)or cloud
storage at the end of each session.This will permit you to
reopen your project to the current stage of completion should
you make serious errors on the next session.Opening an Existing
Project
After your initial data entry session, click on “Open Existing
Project,” and then select and open the data file you saved at the
end of your first session. Saving the Current Project
During, or at the end of each assignment, click on <File> and
<Save/Save As>. If a filename has already been specified, the
current filename should be displayed in the Save dialog but may
be changed if desired.
City Of Bingham Main Window
If you have opened a project file, the main project window
should appear as follows:
7. To navigate between the Journal, Ledger, and Account screens,
simply click on the [TAB] for that particular screen.
To switch between different funds and governmental activities,
government-wide, choose the desired entity from the drop-down
menu.
You can verify which entity you are working on by the caption
on the upper right corner of the window. It will show the title
of your project, and the current fund you are in.
The main window has the same standard window controls as
most other applications. To close down your project, simply
click on the [X] box. If you click on the [X] box you will be
asked whether you want to close the program without saving
changes. Remember the folder location where you save your file
so it will be easier to retrieve it when you want to reopen the
file.Adding and Posting Journal Entries
You need to be in the Journal view before you can add any
journal entries. Once you are in the Journal view, you will see
the journal entry panel on the lower portion of the window.
Before ANY entry can be added to the Journal, a transaction
description, account # - description, and debit or credit amount
must be specified.
Once you have filled in the necessary fields, simply click on
[Add Entry] to add the entry to the journal. If the entry being
made is a closing entry, you must click on the check mark for
[Closing Entry].
If one of the fields is missing a value or contains an illegal
character, the [Add Entry] button will remain disabled.
8. If the account selected from the drop-down [Account (# -
Account Description)] menu is a control account, the detail
journal will automatically open for entering the transaction
detail. When entering data in the detail journal, you must first
select an item from the drop-down [TransactionDescription] or
type your own description in the box before selecting the
account. When you have completed your entries the detail total
for the transaction will be entered into the control account.
Once you have entered a batch of entries into the general
journal, you can post them to the general ledger at any time by
clicking the [Post Entries] button. In the case of the General
Fund, posting transactions also posts entries from the detail
journal to the Revenue ledger and Appropriations,
Encumbrances, Expenditures ledgers. The [Post Entries] button
only posts entries for the fund/entity that is currently open.
Editing/Deleting/Unposting Journal Entries
To edit entries that have already been entered, double click or
right click on the entry, and select edit. You will know you are
in edit mode when the entry form turns red and the boxes fill in
with the data from the journal. If you wish to delete an entry,
right click on the item and select [Delete] or choose [Edit]-
[Delete].
As in real-world systems, the software usually does not allow
you to edit entries that have already been posted. So, it is
recommended that you verify the accuracy of entries before
clicking [Post Entries]. However, for your convenience we have
added the capability to “unpost” individual batches of posted
transactions. To unpost simply highlight any entry within the
batch you want to unpost and either right click and select
[Unpost] or select [Unpost] from the Edit menu. Make all
necessary editing changes to the appropriate accounts then click
[Post Entries] and your corrections will be made to the
appropriate accounts. If you need to add a missing entry to a
previously posted journal entry, then unpost as described above,
9. highlight the line below which a new entry is to be added, and
right click and select “Insert New Entry.”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).
Screen shot of “right clicking” on a journal entry.
Enter the data for the new entry and click “Add Entry” to insert
the new entry. A provision also allows you to clear all of the
transactions from the current fund or entity. Under [File]-
[Student Assistance] you will find the option [Wipe out data for
current fund or governmental activities]. The wipe out function
should be used as a last resort since making changes by editing
is quite easy. Once you select this option, there is no going
back. It will remove ALL of the transactions for the current
fund or entity.
Working with the Ledger Screen
Switch to the Ledgers screen by clicking on the Ledger tab.
Switch entities at any time by changing the selection.Depending
on the fund or entity on which you are working, there may be
different ledgers for you to view. Choose the ledger you want
to view from the drop-down list.
If you want to print out a ledger, you should open the [Reports]
menu, and select the report to print.
Working with the Detail Journal Screen
The General Fund of the City of Bingham uses a Detail Journal
to avoid recording operating or budget detail in the general
10. journal/ledgers.
If you choose a control account that has subsidiary detail
associated with it, you will be taken directly to the Detail
Journal. If you attempt to edit a journal entry that has
associated subsidiary detail, you will automatically be prompted
to also open the Detail Journal for editing, if desired.
The Detail Journal screen for the General Fund appears as
shown on the following page.
The Detail Journal operates very similar to the entry screen on
the General Journal. Fill in the boxes or, in the case of the
[Transaction Description] box, select a description from the
drop-down menu, and click [Add Entry]. The balance of the
entries for this transaction is automatically updated. When you
exit the Detail Journal the balance will be copied into a single
control account amount in the General Journal. Please note that
the year and reference numbers of these transactions are based
on the originating entry (the line in the General
Journal).Printing Reports
All of the reports for the City of Bingham are available through
the Reports menu. Simply go to the menu and click on the
report you want.To print, click on the “Print” icon and print in
the normal manner. If you need to create a “Save as Printable
PDF File,”accept the default file name and save location, or
change the name and/or location if you prefer.Exporting Trial
Balances
To make it easier to prepare financial statements/schedules,
spreadsheet files for all trial balances for each entity and each
year of transactions, as well as detail subsidiary account
balances (General Fund only), can be exported to either Excel
or CVS for non-Microsoft applications. To export an item,
select it from the [File][Export] menu, accept the default file
11. name and folder location, and save it. You can change the file
name and/or location if you prefer. Completing Chapters 2
through 11 of the City of Bingham
This version of a cumulative problem written for the computer
presents a series of transactions, covering activities of the City
of Bingham, assuming the city utilizes the dual-track accounting
approach to the GASB governmental reporting model described
in Reck andLowensohn, Accounting for Governmental and
Nonprofit Entities, 17th Edition. The transactions presented
relate to the city’s General, capital projects, debt service,
enterprise, and fiduciary funds, as well as to an additional
accounting entity, Governmental Activities at the government-
wide level. The transactions and instructions in this series are
designated Chapter 2, Chapter 3, etc., corresponding to the
chapters of Reck and Lowensohn, Accounting for Governmental
and Nonprofit Entities, 17thEdition.
You should begin the project with Chapter 2 of the instructions
as you complete Chapter 2 of the textbook. Some problems
require you to print trial balances or other documents. Other
problems require the preparation of financial statements or
other documents. The specified documents can either be turned
in chapter by chapter or retained in a cumulative folder until the
end of the project, depending on your instructor’s preference
and instructions. Some instructors may prefer that you
electronically submit your project data file and either Excel or
PDF files containing your trial balances, financial statements,
and other, rather than submitting printed copies.
To minimize errors, you should read and follow all instructions
carefully. Students find that this computerized cumulative
problem significantly enhances their learning if they complete
each City of Bingham chapter as the corresponding chapter of
the textbook is covered. Conversely, students who procrastinate
often find that the project takes much more time than they
12. expected and that it is harder to recall how to make the journal
entries covered in the earlier chapters. Thus, delaying until the
deadline for your project is nearly due may increase the total
time it takes you to do the project and leave you little time for
anything else that week. So, our advice is to stay current with
the project.
Chapter 2Opening the Books
The City of Bingham has installed a new computerized
accounting system, which provides files for general journal
entries and posting to appropriate general ledger/subsidiary
ledger accounts. Budgetary, operating statement, and balance
sheet accounts are provided for the General Fund and the other
governmental fund types. Operating statement accounts and
balance sheet accounts are also provided for governmental
activities at the government-wide level and the proprietary and
fiduciary funds used by the City of Bingham that you will use in
Chapters 5-9 of the problem. To begin this case, you must enter
the city’s initial accounting information as of December 31,
2016, so that all transactions can be recorded for the next fiscal
year beginning January 1, 2017.
Required
Open the City of Bingham software by double clicking on the
Cities of Smithville and Bingham program. If creating a new
project, click [Create New Project], when the [Create New
Project] window appears choose City of Bingham from the
[Choose a City] drop down menu. In addition, in the [Enter
your name] box please type in your first and last name so that
your name will appear on all printable reports and click
[Create]. This will create the project and provide access to all
of the funds and accounts that you will need to complete the
“City of Bingham” cumulative problem.
To protect yourself from possible hard drive failure or
13. corruption of your project data file, we recommended that you
save your file to a removable device (e.g., flash drive or the
cloud), creating a dated backup file for your project at the end
of each session.
To open an existing project, click on [Open Existing Project] in
the opening window.
a. If it is not already displayed, select [General Fund] in the
[Current Accounting Entity] window and the [Accounts] tab.
Clicking on the [Accounts] tab allows you to see the chart of
accounts that will be used for the [General Fund]. A different
chart of accounts is provided for each of the accounting entities.
Next, select the [Journal] tab and click the drop down menu for
[Account (# - Description)]. You should see the same general
ledger accounts that were listed when you clicked on the
[Accounts] tab. (Note: For purposes of this exercise, date
suffixes are omitted from the Expenditures and Encumbrances
accounts as expenditures from more than one year’s
appropriations do not occur in this problem.)
b. The post-closing trial balance for the General Fund of the
City of Bingham as of December 31, 2016, is shown on the
following page. Select the [Journal] view and create a journal
entry to enter the balance sheet accounts and amounts shown in
the trial balance (review software operating procedures in
Chapter 1 of these instructions if necessary). Be sure to enter
2016from the drop-down [Year] menu and enter the paragraph
number from these instructions in the [Transaction Description]
box of the [Journal] view. For this entry you should enter 2-
b.Select the appropriate accounts individually and insert the
appropriate amounts. (Note: Enter all dollar amounts without
dollar signs, without commas, and without decimal points. All
amounts in this project should be rounded to the nearest whole
dollar. For all entries, it is vitally important that the correct
year be selected.)You must enter each account and amount one
14. line at a time by clicking [Add Entry].
The year and transaction description need only be entered for
the first line of the journal entry; it should remain in the boxes
for the rest of the accounts. When you have completed entering
all account data and amounts, verify the accuracy of all your
entries, including date and paragraph numbers. When you are
sure that your entries are correct, click [Post Entries] to post the
items to the General Ledger of the General Fund.
Unpost capability. As discussed in Chapter 1 of these
instructions, the City of Bingham software program permits
students to “unpost” a particular batch of posted transactions.
Unposted entries then can be edited or missing entries can be
inserted before re-posting entries. Prior to unposting a batch all
batches must be posted.
Select [Reports, Trial Balances, Post-Closing Trial Balance] and
print or save as a PDF file the post-closing trial balance for year
2016. If printed, retain the printed trial balance in your
personal cumulative folder until the due date assigned by your
instructor for the project. The PDF file can be submitted as
directed by your instructor.
CITY OF BINGHAM
General Fund
Post-closing Trial Balance
As of December 31, 2016
Account Title DebitsCredits
Cash
$ 151,000
Taxes Receivable—Delinquent
517,000
Allowance for Uncollectible Delinquent Taxes
15. $ 46,750
Interest and Penalties Receivable on Taxes
26,059
Allowance for Uncollectible Interest and Penalties
1,434
Vouchers Payable
433,400
Due to Other Funds
14,300
Deferred Inflow of Resources—Operating
Grants and Contributions
30,000
Fund Balance—Committed—Public Safety
16,720
Fund Balance—Committed—Public Works
31,130
Fund Balance—Assigned—Health and Welfare
33,616
Fund Balance—Unassigned
86,709
Totals
$ 694,059$ 694,059
c. Select [Governmental Activities—Government-Wide] in the
[Current Accounting Entity] drop-down menu and the
16. [Accounts] view tab. You will see all of the accounts included
in the trial balancebelow, plus many other accounts that will be
used in the various chapters of the City of Bingham project.
d. Select the [Journal] view and create a journal entry to enter
the statement of net position (i.e., balance sheet) accounts and
amounts shown in the following trial balance. It is necessary to
enter these items in the accounts of the governmental activities
category at the government-wide level as the general journal
and general ledger for governmental activities comprise a
separate “set of books” from those for the General Fund. Be
sure to enter 2016from the drop-down [Year] menu and enter 2-
d in the Transaction Description box. Select each account
individually and insert the appropriate debit or credit amount
for each account. When you have completed entering the initial
data, verify the accuracy of all entries and click [Post Entries]
to post the entries to the governmental activities, government-
wide general ledger.
CITY OF BINGHAM
Governmental Activities, Government-wide Level
Post-closing Trial Balance
As of December 31, 2016
Account Title DebitsCredits
Cash
$ 1,101,000
Taxes Receivable—Delinquent
602,000
Allowance for UncollectibleDelinquent Taxes
$ 100,750
17. Interest and Penalties Receivable on Taxes
35,659
Allowance for Uncollectible Interest and Penalties
2,394
Land
1,210,000
Improvements Other than Buildings
9,900,000
Accumulated Depreciation—Improvements
Other Than Buildings
2,310,000
Infrastructure
32,109,000
Accumulated Depreciation—Infrastructure
12,408,000
Buildings
10,230,000
Accumulated Depreciation—Buildings
2,310,000
Equipment
8,360,000
Accumulated Depreciation—Equipment
18. 4,030,400
Vouchers Payable
433,400
Accrued Interest Payable on Long-term Debt
50,000
Internal Payables to Business-type Activities
14,300
Current Portion of Long-term Debt
500,000
Serial Bonds Payable—2%
9,500,000
Deferred Inflow of Resources—Operating Grants
and Contributions
30,000
Net Position—Net Investment in Capital Assets
30,750,600
19. Net Position—Restricted for Debt Service
939,640
Net Position—Unrestricted
168,175
Totals
$63,547,659$63,547,659
e. Select [Reports, Trial Balances, Post-Closing Trial
Balance]andprint the trial balance for 2016 or save the report as
a PDF. If printed, retain the printed trial balance in your
personal cumulative folder until the due date assigned by your
instructor for the project. The PDF file can be submitted as
directed by your instructor. Also, we recommend that you save a
dated backup file on a removable device, as discussed
previously.
Before closing the City of Bingham, click on [File], and
[Save/Save As] to save your work.If you close the file by
clicking on the [X] box you will be asked if you want to save
your changes before closing.
Chapter 3Recording the Annual Budget
The following budget for the General Fund of the City of
Bingham was legally adopted for the fiscal year ending
December 31, 2017.
Estimated Revenues:
Real Property Taxes
$6,600,000
Sales Taxes
20. 750,000
Interest and Penalties on Taxes
47,000
Licenses and Permits
480,000
Fines and Forfeits
510,000
Intergovernmental Revenue
525,000
Charges for Services
360,000
Miscellaneous Revenues
225,000
Total Estimated Revenues
$9,497,000
Appropriations:
General Government
$1,710,000
Public Safety
21. 3,485,000
Public Works
1,735,000
Health and Welfare
965,000
Culture and Recreation
970,000
Miscellaneous
195,000
Total Appropriations
$9,060,000
Estimated Other Financing Uses:
Interfund Transfers Out
$50,000
Required
a. After opening the data file you created for Chapter 2 of this
project, record the budget in the general journal, providing
entries in the Detail Journal when directed. Begin by selecting
[General Fund] in the [Current Accounting Entity] drop-down
box and the [Journal] tab. In the [Year] box, be sure to select
the year 2017. Enter 3-a in the [Transaction Description] box.
Select “Estimated Revenues” in the drop down [Account (# -
Description)] window. This will take you automatically to the
22. Detail Journal where you will enter the detail for each estimated
revenue source. In the Detail Journal, select “Budget
Authorization” from the drop-down menu for [Transaction
Description].
When you have finished entering the estimated revenue detail
information, verify that the correct balance is shown in the
Detail Journal, then click on [Return to General 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 the budgetary entry credit Estimated Other Financing
Uses—Interfund Transfer Out and debit or credit Budgetary
Fund Balance as appropriate to balance the budgetary entry.
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 your journal entries by placing the cursor in the line
you want to edit, then right-clicking and selecting “Edit.” After
unposting, any entry can be edited or deleted, and any omitted
entry can be inserted above a highlighted entry. 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).
b. Go to [Reports], print the pre-closing subsidiary ledgers and
pre-closing trialbalance for year 2017 from the “Reports”
window for retention in your cumulative file until directed by
your instructor to submit them, or submit saved versions of
these documents electronically if directed to do so by your
instructor. As of this time, only the budget has been recorded.
This is your last opportunity to print or export these documents
23. with budget information only. After operating transactions
have been journalized and posted in Chapter 4, subsidiary
ledgers and trial balances will contain both budgetary and
operating accounts and balances.
Before closing the City of Bingham, click on [File], and
[Save/Save As] to save your work.If you close the file by
clicking on the [X] box you will be asked if you want to save
your changes before closing.
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
Bingham that occurred during the 2017 fiscal year; the year for
which the budget given in Chapter 3 was recorded. Read all
instructions carefully.
a. After opening the data file containing your data from
Chapters 2 and 3 of this project, record the following
transactions in the general journal for the General Fund and, if
applicable, in the general journal for governmental activities at
the government-wide level. For all entries, the date selected
should be year 2017. For each of the paragraphs that requires
entries in both the General Fund and governmental activities
journals, you can either record them in both journals on a
paragraph-by-paragraphbasis or, alternatively, record all the
General Fund journal entries first for all paragraphs, then
complete the governmental activities journal entries for all
paragraphs. If you choose the latter method, it might be useful
to print the General Fund general journal entries to assist in
making the entries in the governmental activities journal.
Regardless of the method you choose, we recommend that you
refer to the illustrative journal entries in Chapter 4 of the Reck
and Lowensohn textbook (17th edition) for guidance in making
all entries.
For each entry affecting budgetary accounts or operating
statement accounts, the Detail Journal will automatically open
24. 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]Property taxes were levied in the amount of
$6,875,000. It is estimated that 4 percent of the tax will 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 [Transaction Description] box 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.) Select “Accrued Revenue” in the drop down
[Transaction Description] menu in the Detail Journal related to
the General Fund entry.
2. [Para. 4-a-2] Tax anticipation notes were issued in the
amount of $500,000.
Required: Record the issuance of this note in both the General
Fund and governmental activities general journals.
3. [Para. 4-a-3]Purchase orders, contracts, and other
commitment documents were issued in the following amounts
for the following functions:
General Government
$ 395,000
Public Safety
1,095,000
Public Works
25. 945,750
Health and Welfare
665,725
Culture and Recreation
625,125
Miscellaneous
138,000
Total
$3,864,600
Required: Record the encumbrances in the General Fund
general journal and Detail Journal as appropriate. In the Detail
Journal, select “Purchase Orders” from the drop down
[Transaction Description] menu. You can also type in an
alternative description, if desired.
4. [Para. 4-a-4] Grant funds of $30,000 recorded as Deferred
Inflow of Resources-Operating Grants and Contributions at the
end of FY 2016 were recognized as revenue when timing
requirements were met.
Required: Record the revenue in both the General Fund and
governmental activities general journals by debiting Deferred
Inflow of Resources-Operating Grants and Contributions and
crediting Revenue. (This amount was included as
Miscellaneous Revenue in the General Fund and Program
Revenues-Culture and Recreation-Operating Grants at the
government-wide level.)
5. [Para. 4-a-5] The General Fund paid $385,000 on the
vouchers payable that were outstanding at the end of FY 2016.
Required: Record the payment of this amount in both the
General Fund and governmental activities general journals.
6. [Para. 4-a-6] The General Fund collected the following
26. amounts in cash:
Current year Real Property Taxes
$6,364,000
Delinquent Taxes
468,000
Interest and Penalties Receivable on Taxes 23,860
Sales Taxes
748,000
Licenses and Permits
478,000
Fines and Forfeits
525,000
Intergovernmental Revenues
510,000
Charges for Services
27. 361,000
Miscellaneous Revenues
226,500
Total
$9,704,360
Required: Record the receipt of cash and the related credits to
receivables and revenues accounts, as applicable, in both the
General Fund and governmental activities journals. (Select
“Received in Cash” in the drop down [Transaction Description]
menu in the Detail Journal related to the General Fund revenue
entries.) For governmental activities at the government-wide
level, all Licenses and Permits and Charges for Services were
attributable to the General Government function as Program
Revenue. Fines and forfeits were collected by General
Government departments in the amount of $200,000 and by
Public Safety departments in the amount of
$325,000.Intergovernmental Revenues should be credited to
“Program Revenues—General Government—Operating Grants
and Contributions.”
7. [Para. 4-a-7] The General Fund paid the $14,300 reported as
Due to Other Funds at the end of FY 2016. This amount was
reported as Internal Payables to Business-type Activities at the
government-wide level. (Note: Do not record this transaction in
the Water Utility Fund until instructed to do so in Chapter 7 of
this case.)
Required: Record the payment of this amount in both the
General Fund and governmental activities general journals.
8. [Para. 4-a-8] Delinquent taxes receivable in the amount of
28. $26,000 were written off as uncollectible. Interest and penalties
accrued on these taxes in the amount of $1,300 were also
written off.
Required: Record the writeoffs in both the General Fund and
governmental activities general journals.
9. [Para. 4-a-9]General Fund payrolls for the year totaled
$5,083,038. Of that amount, $772,395 was withheld for
employees' federal income taxes; $860,456 for federal payroll
taxes; $290,798 for employees’ state income taxes; $320,152 for
retirement funds administered by the state government; and the
remaining $2,839,237 was paid to employees in cash. The City
of Bingham does not record encumbrances for payrolls. The
payrolls were chargeable against the following functions’
appropriations:
General Government
$ 1,300,376
Public Safety
2,331,644
Public Works
790,481
Health and Welfare
311,673
29. Culture and Recreation
348,864
Total
$5,083,038
Required: Make summary journal entries for payroll in both the
General Fund and governmental activities general journals for
the year.
10. [Para. 4-a-10]Invoices for some of goods and services
ordered in transaction 4-a-3 were received and vouchered for
later payment. (Select “Elimination” in the drop down
[Transaction Description] menu in the Detail Journal):
Actual
Estimated
General Government
$ 395,940
$ 394,060
Public Safety
1,086,650
1,088,600
Public Works
922,300
927,620
Health and Welfare
661,200
663,600
30. Culture and Recreation
593,750
597,000
Miscellaneous
138,000138,000
Totals
$3,797,840$3,808,880
Required: Record the receipt of these goods and the related
vouchers payable in both the General Fund and governmental
activities journals. At the government-wide level, you should
assume the city uses the periodic inventory method. Thus, the
invoiced amounts above should be recorded as expenses of the
appropriate functions, except for $72,500 of playground
equipment ordered by Culture and Recreation. The equipment
meets the city’s threshold for capitalization (debit Equipment
for this item at the government-wide level). Expenditures
charged to the miscellaneous appropriation should be recorded
in this case as General Government expenses at the government-
wide level.
11. [Para. 4-a-11] The General Fund paid vouchers during the
year in the amount of $3,200,000 as well as its liabilities for
employees’ federal and state income taxes withheld and payroll
taxes.
Required: Record the payment of these items in both the
General Fund and governmental activities general journals.
12. [Para. 4-a-12] The General Fund transferred $50,000 to the
debt service fund so the debt service fund could make a bond
31. interest payment.
Required: Record this transaction in the General Fund only.
The transaction has no effect at the government-wide level since
it occurs between two governmental activities. (Do not record
this transaction in the debt service fund until instructed to do so
in Chapter 6 of this case.)
13. [Para. 4-a-13]Tax anticipation notes issued by the General
Fund were paid at maturity at the face amount plus interest of
$10,000.
Required: Record the payment of these items in both the
General Fund and governmental activities general journals. For
the General Fund charge Miscellaneous for the interest
expenditure. At the government-wide level, debit Expenses—
Interest on Tax Anticipation Notes.
14. [Para. 4-a-14]The General Fund recorded liabilities of
$50,000 to other funds for services received from the Water
Utility Fund during the year.Of this amount, $39,000 should be
charged to Public Safety and $11,000 to General Government.
Required: Record the receipt of these services and the
associated liability in the General Fund and governmental
activities journals. At the government-wide level the liability
should be credited to Internal Payables to Business-type
Activities. Do not record these items in the Water Utility Fund
until instructed to do so in Chapter 7 of this case.
15. [Para. 4-a-15] The balances in the current taxes receivable
and related estimated uncollectiblesaccounts were reclassified
as delinquent. Interest and penalties of $56,580 were recorded
on the delinquent taxes, of which $10,500 was estimated to be
uncollectible.
Required: Record this transaction and reclassification in the
General Fund and governmental activities journals.
16. [Para. 4 a-16] In view of unexpected revenue and
32. expenditure developments the city council revised the budgets
for the current year as shown below:
Budget Adjustments
Estimated Revenues:
Intergovernmental Revenue
$ 15,000 decrease
Fines and Forfeits
15,000 increase
Miscellaneous Revenue
31,500 increase
Appropriations:
Public Safety
$ 20,000 decrease
Health and Welfare 10,000 increase
Miscellaneous 50,000 decrease
Required: Record the budget amendments in the General Fund
general journal only. Budgetary items do not affect the
government-wide accounting records. (Note: Select “Budget
Amendment” in the [Transaction Description] box in the Detail
Journal.)
Post all journal entries to the general and subsidiary ledgers:
After reviewing all entries for accuracy, including year and
paragraph numbers, post all entries to the general ledger
accounts and to all subsidiary ledger accounts, by clicking on
[Post Entries]. Also post all entries in the governmental
activities journal.
33. 17. [Closing Entry]Following the instructions in the next
paragraph, prepare and post the necessary entries to close the
Estimated Revenues, Appropriations, and Estimated Other
Financing Uses accounts to Budgetary Fund Balance; and
Revenues, Expenditures, and Other Financing Uses to Fund
Balance—Unassigned. Because the City of Bingham honors all
outstanding encumbrances at year-end, it is not necessary to
close Encumbrances to Encumbrances Outstanding at year-end
since encumbrances do not affect the General Fund balance
sheet or statement of revenues, expenditures, and changes in
fund balances. However, if you would like to avoid having
these accounts appear in the post-closing trial balance, you can
opt to close Encumbrances to Encumbrances Outstanding. If the
accounts are closed, they would need to be reestablished at the
beginning of the next year, although entries are not required in
this problem for the next year.
To close the temporary accounts, you must click on the check
mark for [Closing Entry], “Closing Entry” will appear in the
[Transaction Description] box. Be sure the check mark in the
box for [Closing Entry] is showing before closing each
individual account. Also, with the exception of Estimated Other
Financing Uses—Interfund Transfers Out and Other Financing
Uses—Interfund Transfers Out, you will be sent to the Detail
Journal where you must close each individual budgetary or
operating statement account. To determine the closing amounts
for both General Ledger and subsidiary ledger accounts, you
should first print the pre-closing version of these ledgers for
year 2017 from the [Reports] menu.
At year-end, an analysis by the city’s finance department
determined the following constraints on resources in the
General Fund. Prepare the appropriate journal entry in the
General Fund to reclassify amounts between Fund Balance—
Unassigned and the fund balance accounts corresponding to the
constraints shown below. (Note: You should consider the
34. beginning of year balances in fund balance accounts in
calculating the amounts to be reclassified.)
AccountAmount
Fund Balance—Assigned—Culture and Recreation
$57,650
Fund Balance—Assigned—Health and Welfare
25,000
Fund Balance—Committed—Public Safety
12,300
Fund Balance—Committed—Public Works
33,790
Note: DO NOT PREPARE CLOSING ENTRIES FOR
GOVERNMENTAL ACTIVITIES AT THIS TIME since
governmental activities will not be closed until Chapter 9, after
the capital projects fund (Chapter 5) and debt service fund
(Chapter 6) transactions affecting governmental activities at the
government-wide level have been recorded.
b.
Select “Export” from the drop down [File] menu to create an
Excel or other worksheet of the General Fund post-closing trial
balance as of December 31, 2017. Use Excel or other
spreadsheet software to prepare in good form a balance sheet
for the General Fund as of December 31, 2017. Follow the
format shown in Illustration 4-3 of Reck and Lowensohn,
Accounting for Governmental and Nonprofit Entities, 17th
edition textbook (hereafter referred to as “the textbook.”)
Alternatively, you can click on [Reports] to print the post-
closing trial balance and use the printed copy to manually
35. prepare a balance sheet.
c.
Refer to the General Fund Revenues and
Appropriations/Encumbrances/Expenditures Subsidiary Ledgers
found under “Reports” and “Ledgers.” Use Excelor other
spreadsheet software to prepare in good form a statement of
revenues, expenditures, and changes in fund balances for the
General Fund for the year ended December 31, 2017. (See
Illustration 4-4 in the textbook for an example format.)
d.
Refer to the General Fund Revenues and
Appropriations/Encumbrances/Expenditures Subsidiary Ledgers
found in part c above to prepare in good form a statement of
revenues, expenditures, and changes in fund balances—budget
and actual for the General Fund for the year ended December
31, 2017. (See Illustration 4-5 in the textbook for an example
format.)
e.
Prepare a reconciliation of total expenditures reported in your
solution to part c of this problem with the total expenditures
and encumbrances reported in your solution to part d of this
problem. (See example in Chapter 4 of the textbook following
Illustration 4-5, which compares Illustrations 4-4 and 4-5.)
[Note: File the printouts of all your exported or printed
documents and your completed financial statements in your
cumulative problem folder until directed by your instructor to
submit them, unless your instructor specifies submission files
electronically.]
Before closing the City of Bingham, click on [File], and
[Save/Save As] to save your work.If you close the file by
clicking on the [X] box you will be asked if you want to save
your changes before closing.
36. Chapter 5 Recording Capital Asset and Capital Project
Transactions
City Hall Annex Construction Fund and Governmental
Activities at the Government-wide Level
During fiscal year 2016, the voters of the City of Bingham
approved the issuance of 3 percent tax-supported serial bonds in
the face amount of $7,500,000 to constructand equip an annex
to the City Hall. The bonds are to mature in blocks of $375,000
every six months over a 10-year period commencing January 1,
2018.
Required
a. Prepare general journal entries as necessary to record the
following transactions in the general journals of theCity Hall
Annex Construction Fundand, if applicable, in the governmental
activities general journal at the government-wide level. Do not
record entries at this time in any other affected funds; those
entries will be made in later chapters of this cumulative
problem that cover those funds. Use account titles listed under
the drop-down [Account (#-Account Description)] menu. Be
sure the year 2017 is selected from the drop-down [Year] menu
and the appropriate paragraph number shown in bold-face font
below is in the [Transaction Description] box.
Before closing the City of Bingham, click on [File], and
[Save/Save As] to save your work.If you close the file by
clicking on the [X] box you will be asked if you want to save
your changes before closing.
1. [Para. 5-a-1] On the first day of the 2017 fiscal year (January
1, 2017), the bond issue was sold at 101. Cash in the face
amount of the bonds, $7,500,000, was deposited in the City Hall
Annex Construction Fund; the premium was deposited in the
debt service fund, as required by state law.
Required: Record these transactions in the City Hall Annex
Construction Fund and governmental activities journals. (Hint:
37. In addition to recording the liability for bonds payable in the
governmental activities journal, you should record the premium
on the bonds payable [credit Unamortized Premium on Serial
Bonds] in the governmental activities general journal.) Wait
until instructed in Chapter 6 to make the corresponding entry in
the debt service fund.
2. [Para. 5-a-2] The city invested $5,000,000 of the bond
proceeds in 90-day notes.
Required: Record this transaction in both the City Hall Annex
Construction Fund and governmental activities general journals.
3. [Para. 5-a-3] The City Hall Annex Construction Fund
purchased land for the annex for $500,000. This amount was
vouchered.
Required: Record this transaction in both the City Hall Annex
Construction Fundand governmental activities general journals.
In the governmental activities general journal at the
government-wide level, this purchase should be debited to Land.
(Note: This transaction was not encumbered.)
4. [Para. 5-a-4] A contract for architectural services was signed
at an estimated amount of $325,000 for the design of the City
Hall Annex.
Required: Record the encumbrance in the City Hall Annex
Construction. This transaction has no effect at the government-
wide level.
5. [Para. 5-a-5] Legal and other capitalizable costs of the bond
issue were vouchered in the amount of $150,000.
Required: Record this transaction in both the City Hall Annex
Construction Fund and governmental activities general journals.
(Note: This transaction was not encumbered.)
6. [Para. 5-a-6] Preliminary plans were received (related to the
contract signed in paragraph 5-a-4) for which architectural fees
of $95,000 were vouchered.
Required: Eliminate the encumbrance and record a Vouchers
38. Payable liability in the City Hall Annex Construction Fund and
governmental activities journals, as appropriate.
7. [Para. 5-a-7] Construction bids were opened and analyzed. A
contract was signed with the firm that submitted the winning
bid of $6,000,000. A provision of the contract permits the city
to withhold 5 percent of payment pending final acceptance of
the completed project.
Required: Record the signing of the contract in the City Hall
Annex Construction Fund general journal. This transaction has
no effect at the government-wide level.
8. [Para. 5-a-8] Vouchers payable were recorded in the amount
of $220,000 for the final architectural plans and specifications
for the construction project (see para. 5-a-4).
Required: Eliminate the remaining encumbrance for the
architectural services and record a Vouchers Payable liability in
the City Hall Annex Construction Fund and governmental
activities journals, as appropriate.
9. [Para. 5-a-9] The 90-day notes matured, paying $37,500 in
interest (see para. 5-a-2).
Required: Record this transaction in both the City Hall Annex
Construction Fund and governmental activities general journals.
The interest should be recorded as general revenue in the
governmental activities journal.
10. [Para. 5-a-10] The contractor submitted a billing for
$3,000,000. This amount was recorded as a contract payable.
Required: Record this transaction in both the City Hall Annex
Construction Fund and governmental activities general journals.
11. [Para. 5-a-11] The contractor’s billing (see para. 5-a-10)
39. was paid, less a 5 percent retained percentage.
Required: Record this transaction in both the City Hall Annex
Construction Fund and governmental activities general journals.
12. [Para. 5-a-12] All pending vouchers were approved and
paid.
Required: Record this transaction in both the City Hall Annex
Construction Fund and governmental activities general journals.
13. [Para. 5-a-13] Furniture and equipment for the annex were
ordered at an estimated total cost of $465,000.
Required: Record this transaction in the City Hall Annex
Construction Fund. It has no effect on the governmental
activities general journal.
14. [Para. 5-a-14] The contractor completed construction,
submitted the final bill, and requested payment of the balance
due. A liability was recorded in the amount of $3,100,000.
Required: Record this transaction in both the City Hall Annex
Construction Fund and governmental activities general journals.
The encumbrance account should be reduced by the remaining
$3,000,000 construction contract balance.
15. [Para. 5-a-15] After final inspection, a final payment was
made to the contractor, including the amount retained in para.
5-a-11.
Required: Record this transaction in both the City Hall Annex
Construction Fund and governmental activities general journals.
16. [Para. 5-a-16] Furniture and equipment were received (see
para. 5-a-13) at a total cost of $465,500. Invoices were
vouchered for payment.
Required: Record this transaction in both the City Hall Annex
40. Construction Fund and governmental activities general journals.
This amount exceeds the city’s capitalization threshold, so
Equipment should be debited.
17. [Para. 5-a-17] The City Hall Annex Construction Fund paid
all outstanding liabilities on December 31, 2017.
Required: Record this transaction in both the City Hall Annex
Construction Fund and governmental activities general journals.
Total construction costs for the City Hall Annex Construction
Project should be capitalized in the Infrastructure account in
governmental activities.
18. [Para. 5-a-18] Remaining cash in the City Hall Annex
Construction Fund was transferred to the debt service fund.
Required: Record this transaction in the City Hall Annex
Construction Fund. Do not record the transfer in the debt
service fund until you are instructed to do so in Chapter 6. This
transaction involves two governmental funds, thus it has no
effect on the governmental activities general journal.
19. Verify the accuracy of all your preceding entries in the
general journals of the City Hall Annex Construction Fund and
governmental activities at the government-wide level, then click
[Post Entries] of each entity to post the entries to the respective
general ledgers. For the City Hall Annex Construction Fund
only, prepare year-end closing entries for 2017 and post them to
the fund’s general ledger.(Note: You must click on the box for
[Closing Entry] to check mark it;“Closing Entry” will appear in
the [Transaction Description] box for the account being closed.
Be sure the check mark is present for each account being
closed.) Click [Post Entries] to post the closing entry. Closing
entries will be made in the governmental activities general
journal in Chapter 9 of this cumulative problem. Ignore those
entries for now.
41. b. Export the pre-closing trial balance for year 2017 to an
Excel worksheet to prepare a statement of revenues,
expenditures, and changes in fund balances for the City Hall
Annex Construction Fund for the year ended December 31,
2017. (See Illustration 5-3 in the textbook for an example of
the format of a capital projects fund statement of revenues,
expenditures and changes in fund balance.). Print the pre-
closing trial balance from the [Reports] menu. (Note: A balance
sheet is not required since the capital project fund was closed
prior to end of FY 2017.)
[Note: Retain all required printouts and your financial
statements in your cumulative folder until directed by your
instructor to submit them, unless your instructor prefers to have
files submitted electronically, in which case you will need to
save a .pdf version of your trial balance.]
Chapter 6 Transactions Affecting General Long-Term Liabilities
and Debt Service
The City of Bingham utilizes a single debt service fund to
account for the service of all issues of tax-supported and special
assessment long-term debt. As of December 31, 2016, one issue
of tax-supported serial bonds was outstanding.
The post-closing trial balance of the debt service fund as of
December 31, 2016, is shown below. The issue of tax-
supported serial bonds issued on October 1, 2016 and
outstanding on December 31, 2016, amounted to $10,000,000.
Bonds of this issue in the amount of $500,000 mature on
September 30 of each year, beginning in 2017. This bond issue
bears interest at the annual rate of 2 percent, payable on
March31 and September 30 each year. The cash balance of the
debt service fund on December 31, 2016, is restricted for the
repayment of tax-supported bond principal and interest
payments, such as the principal maturing on September 30,
2017, and bond interest due in 2017.
42. a.
Record the following accounts and balances in the debt service
fund general journal, selecting 2016 from the [Year] menu and
using para. 6-a for the [Transaction Description].When
completed select [Post Entries] to post the entries in the general
ledgers.(Note: These opening balances were previously recorded
in the governmental activities general journal in Chapter 2 of
this project.)
CITY OF BINGHAM
Debt Service Fund
Trial Balance
AsofDecember 31, 2016
Debits
Credits
Cash
$ 950,000
Taxes Receivable—Delinquent
85,000
Allowance for Uncollectible Delinquent
$ 54,000
Taxes
43. Interest and Penalties Receivable on Taxes
9,600
Allowance for Uncollectible Interest and
Penalties
960
Fund Balance—Restricted
989,640
Totals
$1,044,600$1,044,600
Additional Information:
On January 1, 2017, the City of Bingham sold a 12-year issue of
tax-supported serial bondsto finance the construction and
equipping of an annex to City Hall. As describedin Chapter 5 of
this cumulative problem, the total amount of bonds issued on
that date was $7,500,000, sold at 101. The issue bears interest
at the annual rate of 3 percent, payable on January 1 and July 1
of each year; bonds in the amount of $375,000 will mature on
January 1, 2018, and every six months thereafter until maturity.
The premium on these bonds will be amortized using the
straight-line method over 24 periods. Cash for the payment of
interest in 2017 will be provided by the General Fund (see
Chapter 4).
Before closing the City of Bingham, click on [File], and
44. [Save/Save As] to save your work.If you close the file by
clicking on the [X] box you will be asked if you want to save
your changes before closing.
Required:
b.
Prepare general journal entries, as necessary to record the
following transactions in the debt service fund general journal
and, if applicable, in the governmental activities general
journal. Use account titles listed under the drop down [Account
(# - Description)] menu. Be sure the year 2017 is selected from
the drop-down [Year] menu and the appropriate paragraph
number shown in bold-face font below is in the [Transaction
Description] box.
1. [Para. 6-b-1] From the data given about the bond issue
already outstanding on January 1, 2017, and the City Hall
Annex Construction Fund bond issue sold on that date, city
officials adopted a legal budget for the fiscal year ended
December 31, 2017.
Required: Record the budget for the Bingham Debt Service
Fund for year 2017. Budgetary entries have no effect on the
government-wide accounting records.The budget provides for
estimated revenues of $700,000 from property taxes, $2,000 of
interest and penalties on taxes, and $9,000 of earnings on
investments. It also provides for estimated other financing
sources for premiums on bonds of $75,000 and interfund
transfers in from the General Fund of $50,000. Appropriations
of $812,500 were provided for the payment of bond principal of
$500,000 maturing on September 30 and $312,500 for bond
interest payments due on March 31, July 1, and September 30,
2017 (.02 X 6/12 X $10,000,000 + .03 X 6/12 X $7,500,000 +
.02 X 6/12 X $10,000,000). (In the Debt Service Fund, the City
opts not to budget for the subsequent year January 1 interest
payment.)
2.
[Para. 6-b-2] Taxes were levied by the debt service fund in the
amount of $705,000. Of this amount, $5,000 was expected to be
45. uncollectible.
Required: Record these transactions in both the debt service
fund and governmental activities journals.
3.
[Para. 6-b-3] Cash in the amount of the $75,000 premium on the
bonds sold on January 1, 2017 was received and recorded in the
debt service fund.
Required: Record this transaction in the debt service fund. No
entry is required at this time in the governmental activities
general journal since the bond issue, including the related
premium and accrued interest, was recorded in the governmental
activities general journal in transaction 5-a-1.
4.
[Para. 6-b-4] Temporary investments were purchased in the
amount of $500,000.
Required: Record this transaction in both the debt service fund
and governmental activities journals.
5.
[Para. 6-b-5] Checks were written and mailed to bondholders for
interest payable on March 31, 2017.
Required: Record this transaction in both the debt service fund
and governmental activities journals. In the governmental
activities general journal, debit Accrued Interest Payable for the
portion of these amounts expensed on December 31, 2016, the
end of the preceding fiscal year.
6.
[Para. 6-b-6] Current taxes receivablewere collected in the
amount of $675,000. Also, delinquent taxes receivable were
collected in the amount of $10,000, along with Interest and
Penalties Receivable on Taxes of $600.
Required: Record these transactions in both the debt service
fund and governmental activities journals.
46. 7.
[Para. 6-b-7] Interest on temporary investments was received in
cash in the amount of $7,500.
Required: Record this transaction in both the debt service fund
and governmental activities journals.
8.
[Para. 6-b-8] Temporary investments amounting to $300,000
were sold at par.
Required: Record this transaction in both the debt service fund
and governmental activities journals.
9. [Para. 6-b-9] On July 1, the debt service fund received
$50,000 from the General Fund for interest payment on the 3%
serial bonds. Checks were written and mailed to bondholders
for all of the interest payments due July 1, 2017.
Required:Record the transfer in the debt service fund and the
interest payment in both the debt service fund and governmental
activities journals. At the government-wide level, $3,125 was
debited for amortization of the premium on the 3% serial bonds.
10. [Para. 6-b-10] Cash to close the City Hall Annex
Construction Fund was received in the amount of $7,000. (See
Chapter 5, para. 5-a-18). The city council authorized a budget
amendment for this unexpected transfer.
Required: Record the budget amendment and transfer in the
debt service fund. This transaction involves two governmental
funds, thus it has no effect on the governmental activities
general journal.
11.
[Para. 6-b-11] On September 30, the debt service fund made the
principal and interest payments associated with the 2% serial
bond.
47. Required: Record this transaction in both the debt service fund
and governmental activities journals.
12.
[Para. 6-b-12] Theuncollected balance of current taxes
receivableand the related estimated uncollectible account were
reclassified as delinquent. Interest and penalties of $1,200 were
accrued, of which $120 was estimated to be uncollectible.
Required: Record this transaction in both the debt service fund
and governmental activities journals.
13.
[Para. 6-b-13] At December 31, 2017, accrued interest expense
on the two outstanding bond issues was recorded in the
governmental activities general journal. Amortization of the
premium on the 3% bonds sold was also recorded in the amount
of $3,125.
Required: Record the accrual in the governmental activities
journal.
14.
Verify the accuracy of all your preceding journal entries in the
debt service fund and governmental activities general journals,
then click [Post Entries] of each entity to post the entries to the
respective general ledgers. For the debt service fund only,
make the entries needed to close the budgetary and operating
statement accounts at the end of fiscal year 2017 and post them
to the fund’s general ledger. (Note: You must click on the box
for [Closing Entry] to check mark it; “Closing Entry” will
appear in the [Transaction Description] box for the account
being closed. Be sure the check mark is present for each
account being closed.) Click [Post Entries] to post the closing
entry. Closing entries will be made in the governmental
activities general journal in Chapter 9 of this cumulative
problem. Ignore those entries for now.
48. c. Export the post-closing trial balance for year 2017 to an
Excel worksheet and use Excel to prepare a balance sheet for
the debt service fund as of December 31, 2017. (See
Illustration 4-3 in the textbook for an example of an appropriate
format of a governmental fund balance sheet.). In addition,
print the post-closing trial balance from the [Reports] drop-
down menu.
d. Export the pre-closing trial balance for year 2017 to an
Excel worksheet and use Excel to prepare a statement of
revenues, expenditures, and changes in fund balance for the
Debt Service Fund for the year ended December 31, 2017. (See
Illustration 4-4 in textbook for an example of the format of a
statement of revenues, expenditures and changes in fund
balance.) Print the pre-closing trial balance from the [Reports]
drop-down menu.
e. Prepare in good form a statement of revenues, expenditures,
and changes in fund balances—budget and actual for the Debt
Service Fund for the year ended December 31, 2017. (See
Illustration 4-5 in the textbook for an example format.)
f. Assuming that the assessed valuation of property within the
City of Bingham is $450,000,000, and the legal general
obligation debt limit is 8 percent of assessed valuation, compute
the legal debt margin of the city as of December 31, 2017.
Prepare a schedule in good form showing calculation of the
legal debt limit, debt subject to the limit, and debt margin.
(Note: There is no requirement stating what amount of the
restricted fund balance must be dedicated to principal versus
interest payment, so in this instance treat the entire amount of
restricted fund balance as restricted for principal when
performing your calculations.) (See Illustration 6-3 for an
example).
[Note: Retain all required printouts and your financial
statements in your cumulative folder until directed by your
instructor to submit them, unless your instructor prefers to have
files submitted electronically, in which case you will need to
save a .pdf version of your trial balance.]
49. Chapter 7 Recording Transactions Affecting the Enterprise Fund
and Business-Type Activities
The city water utility is owned and operated by the City of
Bingham. The water utility was originally constructed and
operated by a private corporation, but it was sold to the city 30
years before the year for which transactions are given. The post-
closing trial balance of the Water Utility Fund, as of December
31, 2016, follows:
CITY OF BINGHAM
Water Utility Fund
Trial Balance
AsofDecember 31, 2016
Debits
Credits
Cash
$ 513,395
Restricted Cash—Customer Deposits
62,920
Customer Accounts Receivable
176,484
Accumulated Provision for
Uncollectible Accounts
$ 5,192
50. Inventory of Supplies
103,560
Due from Other Funds
14,300
Utility Plant in Service
20,900,429
Accumulated Depreciation—
Utility Plant
4,612,406
Construction Work in Progress
1,308,340
Vouchers Payable
81,662
Customer Deposits
62,920
Accrued Interest Payable
477,510
Revenue Bonds Payable
51. 15,917,000
Unamortized Bond Discounts
on Revenue Bonds Payable
71,720
Net Position—Net Investmentin Capital
Assets
1,751,083
Net Position—Unrestricted
243,375
Totals
$23,151,148$23,151,148
Additional information:
The following information is provided about accounts shown on
the December 31, 2016, trial balance:
Accrued Interest Payable represents six months’ accrual of
interest on 6% revenue bonds payable. Interest is payable
semiannually on January 1 and July 1 of each year. Unamortized
Bond Discount is credited every six months for the amortization
applicable to the interest payment period. Amortization is
computed by the straight-line method. The balance of $71,720 is
to be amortized over the remaining 20 years of the bond
52. maturity.Required
a. Open a general journal as of December 31, 2016 for the
Water Utility Fund by entering each of the accounts and
amounts shown in the above post-closing trial balance. Enter
2016 from the drop-down [Year] menu. Each of the account
titles will be found in the drop down menu [Account (# -
Description)] in the [Journal] view of the program. Be sure to
enter 7-a as your paragraph number in the [Transaction
Description] box 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, 2016, and retain it in your cumulative file until directed by
your instructor to submit it.
Entries in this enterprise fund do not have to be 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.
Before closing the City of Bingham, click on [File], and
[Save/Save As] to save your work.If you close the file by
clicking on the [X] box you will be asked if you want to save
your changes before closing.
b. Record the following events and transactions, which
occurred during the year ended December 31, 2017. Be sure
that 2017appears in the [Year] menu.
1. [Para. 7-b-1] Bond interest due on January 1, 2017 was paid
to holders of the revenue bonds.
53. 2. [Para. 7-b-2] Billings to customers for water service for the
year totaled $3,076,500. Billings to the City of Bingham
General Fund for water service totaled $50,000.
3.
[Para. 7-b-3]Collections from customers totaled $2,996,100;
$14,300 was also received from the city’s General Fund.
4. [Para. 7-b-4]A$625,000 contract was signed for a
construction project expected to cost $970,000. Water utility
employees will complete $345,000 of the project.
5.
[Para. 7-b-5]Materials and supplies were ordered and received
during the period in the amount of $610,500. The invoices
agreed with the purchase orders and receiving reports and were
recorded as vouchers payable. A perpetual inventory system is
used for all materials and supplies.
6. [Para. 7-b-6] Payrolls were paid totaling $685,250 for
operations; $155,400 for maintenance; and $170,500 for
construction.
7. [Para. 7-b-7] Materials and supplies issued during the period
amounted to $255,000 for operations; $132,000 for
maintenance; and $166,000 for construction.
8. [Para. 7-b-8] Bond interest due on July 1, 2017was paid. As
part of the journal entry, 1/40th of the Unamortized Bond
Discount on Revenue Bonds Payable should be amortized.
9. [Para. 7-b-9]Interest of $32,000 that was recorded as an
expense was determined to have been incurred during
construction and should becharged to Construction Work in
Progress.
10. [Para. 7-b-10]A progress billing for $385,000 was received
from the construction contractor and paid.
11. [Para. 7-b-11]Someassets under construction at the start of
the year and some started during the year were completed and
placed in service. The costs incurred on this construction
totaled $1,102,750.
12. [Para. 7-b-12]Collection efforts were discontinued on bills
54. amounting to $5,150; the customers owing the bills had paid
deposits and interest to the water utility in the amount of
$1,450. (Note: Remember to adjust cash accounts for amounts
no longer restricted.)
13. [Para. 7-b-13]Customer deposits and interest thereon
amounting to $2,500 were applied to the final bills of customers
discontinuing service. Additional deposits and interest
amounting to $2,950 were refunded by check to customers
discontinuing service. (Note: Remember to adjust cash accounts
for amounts no longer restricted.)
14. [Para. 7-b-14]Deposits totaling $7,304 were received from
new customers.
15. [Para. 7-b-15] Vouchers Payable paid during the year
amounted to $343,600 for operating supplies and $166,000 for
materials used in construction, or $509,600 in total.
16. [Para. 7-b-16]Interest paid on customer deposits amountedto
$2,154 (charge Operation Expense). This interest was added to
the customer deposit accounts, and the restricted cash and cash
accounts were adjusted.
17. Adjusting entry - [Para. 7-b-17a] Depreciation on utility
plant was calculated using a straight-line rate of 2 percent of
the beginning gross balance (round charge to the nearest dollar).
[Para. 7-b-17b] The Accumulated Provision for Uncollectible
Accounts should equal $5,820 at year-end.
[Para. 7-b-17c] An adjusting entry for accrual of six months’
interest on bonds payable and amortization of 1/40 of the debt
discount using the straight-line basis was recorded.
After verifying the accuracy of all entries for the preceding
transactions, post amounts to the general ledger accounts by
clicking [Post Entries].
c.
Prepare entries to close all operating statement accounts at the
end of 2017 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 Entry”
55. appears in the [Transaction Description] box. When completed,
post the closing entries to the general ledger by clicking [Post
Entries].
d.
Click on [File]-[Export] to export a post-closing trial balance
for year 2017, and use Excel to prepare a statement of net
position for the Water Utility Fund as of December 31, 2017.
e.
Click on [File]-[Export] to export a pre-closing trial balance for
year 2017, and use Excel to prepare a statement of revenues,
expenses, and changes in net position for the Water Utility Fund
for the year ended December 31, 2017. Interest Expense should
be considered a nonoperating item.
f.
Use the post-closing trial balance for year 2016 from Part aof
this chapter,the trial balances from parts d and e above, and
Excel to prepare and save a statement of cash flows for the
Water Utility Fund for the year ended December 31, 2017.
[Note: Retain a printout of all worksheets and your financial
statements in your cumulative file until directed by your
instructor to turn it in, unless your instructor specifies computer
files electronically.]
Chapter 8 Recording Transactions Affecting a Fiduciary Fund—
An Investment Trust Fund
The city council of the City of Bingham decided in late 2017 to
create an investment pool that would put the city’s investments
under professional management. The pool will be accounted for
as an investment trust fund. The name of the fund, when it is
established in early 2018, will be the Investment Pool Fund.
The initial participants in the Investment Pool Fund will be the
city’s debt service fund and the BinghamConsolidated School
56. District (CSD). The pool will be accounted for in accordance
with GASB standards applicable to fiduciary funds; therefore,
the city’s debt service fund assets managed by the investment
pool will not be reported in the Investment Pool Fund financial
statements. Unless there is a request for a withdrawal,
investment earnings and changes in the fair value of
investments are distributed to participants only at year-end.
During the year, investment earnings are added to an
Undistributed Earnings on Pooled Investments account and
changes in fair value are added to or subtracted from an
Undistributed Change in Fair Value of Investments Account.
a. Record the following transactions that occurred during 2018
in the Investment Pool Fund. Do not forget to click on [Year] to
change the date to 2018.
Before closing the City of Bingham, click on [File], and
[Save/Save As] to save your work.If you close the file by
clicking on the [X] box you will be asked if you want to save
your changes before closing.
1. [Para. 8-a-1] On March 1, 2018, the Investment Pool Fund
was formally established with the receipt of $220,000 in cash
from the city’s own debt service fund, plus receipt from the
Bingham CSD of cash bonds having a market value of $622,000
on this date. The bonds purchased by the Bingham CSD had a
book value of $620,000 on March 1, 2018. The bonds receive
semi-annual interest of 3 percent per annum, on July 1 and
January 1 each year. The CSD’s equity is to also be credited
for $3,100, which represents the two months of interest
receivable on the bonds for January and February 2018.
2. [Para. 8-a-2] The Investment Pool Fund manager purchased
4.5 percent bonds on March 1 in the amount of $200,000.
Because the bonds pay interest semi-annually on January 1 and
July 1, $1,500 in accrued interest was also paid. (Note: Interest
Receivable on Investments should be debited for the accrued
interest.)
57. 3. [Para. 8-a-3] On March 1, the Investment Pool Fund manager
also purchased a 9-month certificate of deposit (CD) for
$10,000. The interest rate on the CD is 2 percent per annum.
4. [Para. 8-a-4] On July 1, interest on both bonds in the amount
of $13,800 ($9,300 and $4,500) was received in cash. (Note:
Adjust for accrued interest.)
5. [Para. 8-a-5] On November 30, the 9-month CD matured and
interest was received.
6. [Para. 8-a-6] On December 31, interest was accrued on bond
investments.
7. [Para. 8-a-7]. On December 31, the fair value of investments
in bonds was $826,000. (Note: Credit Undistributed Change in
Fair Value of Investments for the increase in fair value.)
8. [Para. 8-a-8]. On December 31, the proportionate equities of
the city’s debt service fund and the Bingham CSD were
calculated and investment earnings and changes in fair value of
investments were distributed accordingly. In the journal entries
round all calculations to the nearest whole dollar. (Note: You
should complete 8-c below prior to making this journal entry.)
9. [Para. 8-a-9]. Subsequent to the distribution of earnings and
changes in fair value, the Bingham CSD withdrew $200,000 to
meet certain obligations coming due. To provide the cash
needed for the withdrawal, the Investment Pool Fund manager
sold the4.5 percent bonds on December 31 for $200,000, plus
interest of $4,500, receiving in total $204,500 from the sale.
(Note: Adjust Interest Receivable on Investments for the
interest received.)
b. Post the journal entries for all the preceding transactions then
prepare entries to close the temporary accounts. Be sure and
click on the check mark for [Closing Entries] and check that
“Closing Entry” appears in the [Transaction Description] box
for each account closed.
58. c. Prepare a schedule in good form showing the proportionate
equities of each of the Investment Pool Fund’s two participants
before the Bingham CSD’s $200,000 withdrawal on December
31, 2018. Round calculations to the nearest full percent.
d. Prepare a schedule in good form showing the proportionate
equities of each of the Investment Pool Fund’s two participants
after the Bingham CSD’s $200,000 withdrawal on December 31,
2018. Round calculationsto the nearest full percent.
e. Export the post-closing trial balance and prepare a statement
of fiduciary net position for the Investment Pool Fund as of
December 31, 2018. (Note: To avoid a rounding error use a
spreadsheet to calculate the proportionate share of each asset
held by the CSD: Asset account*[CSD total equities after
withdrawal/Total equities.] Follow the format of Illustration 8-
6.)
f. Export the pre-closing trial balance for this fund and prepare
a statement of changes in net position for the Investment Pool
Fund for the year ended December 31, 2018. (Note: Follow the
format of Illustration 8-7.) Print and retain all the documents
generated in paragraphs c. through f. in your cumulative folder,
unless your instructor requests electronic submission of your
documents.
Chapter 9 Adjusting and Closing Entries for Governmental
Activities, Government-Wide Level; Preparation of
Government-Wide and Major Fund Financial Statements
Before the 2017basic financial statements, both government-
wide and fund, can be prepared for the City of Bingham, you
must first record and post adjusting and closing entries for
governmental activities as described below.
a.
[Para. 9-a] Record depreciation expense for the year 2017 in the
governmental activities general journal at the government-wide
59. level using the following information. Verify accuracy of the
adjusting entries and post to the general ledger by clicking [Post
Entries].
Depreciation Expense Applied to Functions:
General Government
$ 704,000
Public Safety
1,408,000
Public Works
528,000
Health and Welfare
352,000
Culture and Recreation
352,000
Total depreciation expense
$3,344,000
Depreciation Applicable to Asset Categories (Increases in
accumulated depreciation):
Improvements Other Than
Buildings
$ 198,000
Infrastructure
638,000
Buildings
60. 506,000
Equipment
2,002,000
Total depreciation expense
$3,344,000
b.
[Para. 9-b] Provide the journal entries to reclassify the current
portion of long-term debt related to the two serial bonds
payable.
c.
Although closing entries were made in each governmental fund
of this cumulative problem, they have not yet been recorded at
the government-wide level.
Required: [Closing Entries] Record the journal entries required
on December 31, 2017, to close all temporary accounts for
governmental activities at the government-wide level. These
entries should also recognize changes in Net Position—Net
Investment in Capital Assets and Net Position—Restricted for
Debt Service. For each account to be closed or reclassified, be
sure the check mark for [Closing Entry] is on and that “Closing
Entry” appears in the [Transaction Description] box. Post the
closing entries to the general ledger by clicking on [Post
Entries].
Before closing the City of Bingham, click on [File], and
[Save/Save As] to save your work.If you close the file by
clicking on the [X] box you will be asked if you want to save
your changes before closing.
d.
Use the exportable trial balances used in Chapters 2 through 7
of this problem, and the exportable pre-closing trial balance and
post-closing trial balance for governmental activities, to prepare
all government-wide and fund financial statements that must be
61. presented by the City of Bingham in order for its basic financial
statements to be in conformity with generally accepted
accounting principles. (See the list that follows this paragraph
and Illustrations 9-3 through 9-8 and Illustrations A2-1 through
A2-9 of the Reck and Lowensohn textbook for examples of
these statements.) We recommend that you use Excel to prepare
these financial statements; however, your instructor may require
that they be prepared manually. Since the Water Utility Fund is
the only fund in the proprietary funds category, you may reprint
the statement of net position, statement of revenues, expenses,
and changes in net position and the statement of cash flows
prepared for the Water Utility Fund as the required statements
for the proprietary fund basic financial statements, with suitable
change in the titles of the statements, to meet the requirement of
all proprietary type funds and Business-type Activities in the
government-wide financial statements.
(Note: The City of Bingham is a primary government and has no
other organizations for which it is accountable as component
units.Also, the FY 2018 financial information for the
Investment Pool Fund is not included in any of the basic
financial statements you are preparing, as the statements you
are preparing pertain only to FY 2017.)
Government-wide Financial Statements
1. Statement of net position
2. Statement of activities
Fund Financial Statements
1. Balance sheet—governmental funds (with reconciliation of
this statement to the government-wide statement of activities)
2. Statement of revenues, expenditures, and changes in fund
balances—governmental funds (with reconciliation of this
statement to the government-wide statement of activities)
62. 3. Statement of net position—proprietary funds
4. Statement of revenues, expenses, and changes in fund net
position—proprietary funds
5. Statement of cash flows—proprietary funds
Chapter 10 Analysis of Financial Condition (Optional, unless
assigned by your instructor)
Prepare a written evaluation of the City of Bingham’s financial
position and condition as of December 31, 2017, using
appropriate ratios such as the Crawford and Associates ratios
included in Illustration 10-4 of the textbook. For purposes of
calculating per capita ratios, assume the population of the City
of Bingham is 50,000.
Your written analysis should be addressed to the Honorable
Mayor, City Council, and City Manager of the City of Bingham
and should summarize the financial condition of the city overall
and its funds. Be sure also to note significant changes since the
end of the prior year.
Retain a print-out of your evaluation in your cumulative project
folder, unless your instructor specifies submission by e-mail.
Chapter 11 Preparation of Audit Report (Optional, unless
assigned)
Prepare the audit report you believe would be appropriate for a
certified public accountant to express on the financial
statements of the City of Bingham. Explain the rationale for the
nature of the audit report (qualified or unmodified) rendered.
If you have been maintaining a cumulative file, assemble all
required printed reports and financial statements in the proper
sequence and turn them in to your instructor.
63. --The End--
�
Instructions
City of Bingham
Computerized Cumulative Problem
For use with McGraw-Hill/Irwin
Accounting for Governmental & Nonprofit Entities
17th Edition
By Jacqueline L. Reck and Suzanne L. Lowensohn
�
65. Running the Cities of Smithville and Bingham
5
Removing the Cities of Smithville and Bingham
5
General Operating Instructions
Opening the Cities of Smithville and Bingham
5
Creating a new project
6
Opening an existing project
6
Saving thecurrent project
7
City of Smithville Main Window
Adding and posting journal entries
8
Editing/deleting/unposting journal entries
8
Working with the ledgers screen
10
Working with the detail journal screen
66. 10
Printing Reports
11
Exporting Trial Balances
11
CompletingChapters 2 through 11 of the
City of Smithville Cumulative Problem
12
Chapter 2 Opening the Books
13
Chapter 3 Recording the Annual Budget
17
Chapter 4 Recording Operating Transactions Affecting
the General Fund and Governmental Activities at the
Government-wide Level
19
Chapter 5 Recording Capital Asset Transactions
27
Chapter 6Recording General Long-term Liabilitiesand
Debt ServiceTransactions
31
Chapter 7 Recording Enterprise Fund and
Business-type ActivitiesTransactions
37
Chapter 8 Recording Fiduciary FundTransactions —
Tax Agency Fund
40
Chapter 9 Adjusting and Closing Entries for
Governmental Activities, Government-wide Level;
Preparation of Government-wide and Major Fund
Financial Statements
67. 44
Chapter 10 Analysis of Financial Condition
46
Chapter 11 Preparation of Audit Report
46
CHAPTER 1INTRODUCING THE CITY OF SMITHVILLE
CUMULATIVE PROBLEMWelcome
Thank you for purchasing the Cities of Smithville and Bingham
Governmental Accounting Software. This software is designed
to be used with the McGraw-Hill Education textbook
Accounting for Governmental & Nonprofit Entities, 17th
Edition.
System Requirements
To use the Cities of Smithville and Bingham accounting
software application, you must have the following:
Windows
· 2.33GHz or faster x86-compatible processor, or Intel Atom™
1.6GHz or faster processor for netbook class devices
· Microsoft® Windows Server 2008, Windows 7, or Windows 8
Classic
· 512MB of RAM (1GB recommended)
Mac OS
· Intel® Core™ Duo 1.83GHz or faster processor
· Mac OS X v10.7, and above
· 512MB of RAM (1GB recommended)
· Adobe AIR 15 or latest version
· Recommended screen resolution of 1024 x 768 minimum
· Spreadsheet program (in order to easily view the exported
CSV files)
68. · Excel 2003 or later (in order to view the exported Excel files)
· Adobe Reader 9 or later to read saved report files
Licensing
This manual for the full version project was written for use with
the Cities of Smithville and Bingham software. The manual and
the software described in it are copyrighted, with all rights
reserved. This manual and the Cities of Smithville and
Bingham software may not be copied, except as otherwise
provided in your software license or as expressly permitted in
writing by McGraw-Hill Higher Education, Inc.
Use of the Cities of Smithville andBingham governmental
accounting software (the “Software”) and its documentation are
governed by the terms set forth in your license. Such use is at
your sole risk. The software and its documentation (including
this manual) are provided “AS-IS” and without warranty of any
kind.
[Note: Read the following instructions before beginning your
first assignment in Chapter 2. Refer back to this information as
needed.]
RUNNING OR REMOVING THE Cities of Smithville and
BinghamRunning the Cities of Smithville and Bingham
The software application can be run by clicking on the “Cities
of Smithville and Bingham” icon/program as indicated in the
“Opening the Cities of Smithville and Bingham” instructions
below. Click “Install” and follow the installation prompts. It is
recommended to save this file in your Programs/Applications or
Desktop.
You may exit the program by clicking the "X" button at the top
69. right corner on a PC or top left corner on a MAC.Removing the
Cities of Smithville and Bingham
You can remove the software applicationbyuninstalling the
“Cities of Smithville and Bingham”program.GENERAL
OPERATING INSTRUCTIONSOpening the Cities of Smithville
and Bingham
You can open the Cities of Smithville and Bingham at any time
by clicking on the “Cities of Smithville and
Bingham”icon/program.
Creating a New Project
To access the instructions for the Smithville Full Version
project click on Open Instructions in the opening widow and
select and print the full versionproject instructions.To create a
new project, click on “Create New Project.” The Create New
Project window will appear, as shown below.
Enter your first and last name, then select City of Smithville as
your project and click [Create]. The main project window will
pop-up once the project is created and you will be ready to
begin entering journal entry data for your first assignment. This
step creates the accounts and funds that you will need to
complete the full version“City of Smithville”project. After you
have completed the journal entries for each assignment, you
should save your project data file in a folder that you
havecreated on your computer. For your own protection against
hard-drive failure or file corruption, we recommend that you
create a dated backup file on a removable device (e.g.,flash
drive) or cloud storage at the end of each session.This will
permit you to reopen your project to the previous stage of
completion should a computer problem occur during your
current session.Opening an Existing Project
After your initial data entry session, click on “Open Existing
Project,”and then select and open the data file you saved at the
end of your previous session.Saving the Current Project
70. During or at the end of each assignment, click on <File> and
<Save/Save As>.If a filename has already been specified, the
current filename should be displayed in the file name box but
may be changed if desired.
City Of Smithville Main Window
If you have opened a project file, the main project window
should appear as follows:
To navigate between the Journal, Ledgers, and Accountscreens,
simply click on the [TAB] for that particular screen.
To switch between different funds and governmental activities,
government-wide, choose the desired entity from the drop-down
menu.
You can verify which entity you are working on by the caption
on the upper right corner of the window. It will show the title
of your project, and the current fund/entity that is open.
The main window has the same standard window controls as
most other applications. To close down your project, simply
click on the [X] box. If you click on the [X] box you will be
asked whether you want to close the program without saving
changes.Remember the folder location where you save your file
so it will be easier to retrieve it when you want to reopen the
file.Adding and Posting Journal Entries
You need to be in the Journal view before you can add any
journal entries.Once you are in the Journal view, you will see
the journal entry panel on the lower portion of the window.
Before ANY entry can be added to the Journal, a transaction
description, account #-description, and debit or credit amount
must be specified.
71. Once you have filled in the necessary fields, simply click on
[Add Entry] to add the entry to the journal. If the entry being
made is a closing entry, you must click on the check mark for
[Closing Entry].
If one of the fields is missing a value or contains an illegal
character, the [Add Entry] button will remain disabled.
If the account selected from the drop-down [Account (# -
Account Description)] menu is a control account, the detail
journal will automatically open for entering the transaction
detail. When entering data in the detail journal, you must first
select an item from the drop-down [TransactionDescription] or
type your own description in the box before selecting the
account. When you have completed your entries the detail total
for the transaction will be entered into the control account.
Once you have entered a batch of entries into the system, you
can post them to the general ledger at any time by clicking the
[Post Entries] button. In the case of the General Fund, posting
transactions also posts entries from the detail journal to the
Revenue ledger and Appropriations, Encumbrances,
Expenditures ledgers. The [Post Entries] button only posts
entries for the fund/entity that is currently
open.Editing/Deleting/Unposting Journal Entries
To edit entries that have already been entered, double click or
right click on the entry, and select edit. You will know you are
in edit mode when the entry form turns red and the blanksfill in
with the data from the journal. If you wish to delete an entry,
right click on the item and select [Delete] or choose [Edit]-
[Delete].
As in real-world systems, the software does not allow you to
edit entries that have already been posted. So, it is
recommended that you verify the accuracy of entries before
clicking [Post Entries].However, for your convenience we have
added the capability to “unpost” individual batches of posted
transactions.Note that
72. prior to unposting a batch, all batches must be posted.To unpost
simply highlight any entry within the batch you want to unpost
and either right click and select [Unpost] or select [Unpost]
from the Edit menu. Make all necessary editing changes, and
thenclick [Post Entries] and your corrections will be made to
the appropriate accounts. If you need to add a missing entry to
a previously posted journal entry, then unpost as described
above, highlight the line below which a new entry is to be
added, and rightclickand select “Insert Entry.”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).
Screen shot of “right clicking” on a journal entry.
Enter the data for the new entry and click “Add Entry” to insert
the new entry.A provision also allows you to clear all of the
transactions from the current fund or entity. Under [File]-
[Student Assistance] you will find the option [Wipe out data
forcurrent fund or governmental activities]. The wipe out
function should be used as a last resort since making changes by
editing is quite easy. Once you select this option, there is no
going back. It will remove ALL of the transactions for the
current fund or entity.
Working with the Ledgers Screen
Switch to the Ledgers screen by clicking on the ledgers tab.
Switch entities at any time by changing the selection.
Depending on the fund or entity with which you are working,
there may be different ledgers for you to view. Choose the
ledger you want to view from the drop-down list.
73. If you want to print a ledger, you should open the [Reports]
menu, and select the report to print.
Working with the Detail Journal Screen
The General Fund of the City of Smithville uses a Detail
Journal to avoid recording operating or budget detail in the
general journal/ledgers.
If you choose a control account that has subsidiary detail
associated with it, you will be taken directly to the Detail
Journal. If you attempt to edit a journal entry that has
associated subsidiary detail, you will automatically be prompted
to also open the Detail Journal for editing, if desired.
The Detail Journal screen for the General Fund appears as
shown on the following page.
The Detail Journal operates very similar to the entry screen on
the General Journal. Fill in the boxes or, in the case of the
[Transaction Description] box, select a description from the
drop-down menu, and click [Add Entry]. The balance of the
entries for this transaction is automatically updated. When you
exit the Detail Journal the balance will be entered into
thecontrol account amount in the General Journal. Please note
that the year and reference numbers of these transactions are
based on the originating entry (the line in the General Journal).
Printing Reports
All of the reports for the City of Smithville are available
through the Reports menu. Simply go to the menu and click on
the report you want.To print, click on the “Print” icon and print
in the normal manner. If you need to create a “Save as
Printable .pdf File,” accept the default file name and save
location, or change the name and/or location if you
prefer.Exporting Trial Balances
To make it easier to prepare financial statements/schedules,
spreadsheet files for all trial balances for each entity and each
74. year of transactions, as well as detail subsidiary account
balances (General Fund only), can be exported to either Excel
or CVS for non-Microsoft applications. To export an item,
select it from the [File], [Export] menu, accept the default file
name and folder location, and save it. You can change the file
name and/or location if you prefer.Completing Chapters 2
through 11 of the City of Smithville Full VersionForeword
This full version of a cumulative problem written for the
computer presents a series of transactions covering activities for
the City of Smithville, assuming the city utilizes the dual-track
accounting approach to the GASBreporting model described in
Reck and Lowensohn, Accounting for Governmental &
Nonprofit Entities, 17th edition. The transactions presented
relate to the city’s General Fund, capital projects, debt service,
enterprise, and fiduciary funds, as well as to an additional
accounting entity, governmental activities at the government-
wide level. The transactions and instructions in this series are
designated Chapter 2, Chapter 3, etc., corresponding to the
chapters of Reck and Lowensohn,Accounting for Governmental
& Nonprofit Entities, 17th edition.
You should begin the project with Chapter 2 of the instructions
as you complete Chapter 2 of the textbook. Some problems
require you to print trial balances or other documents. Other
problems require the preparation of financial statements or
other documents. The specified documents can either be turned
in chapter by chapter or retained in a cumulative folder until the
end of the project, depending on your instructor’s preference
and instructions. Some instructors may prefer that you
electronically submit your project data file and either Excel or
.pdf files containing your trial balances, financial statements,
and other documents, rather than submitting printed copies.
To minimize errors, you should read and follow all instructions
carefully. Students find that this computerized cumulative
problem significantly enhances their learning if they complete
75. each City of Smithville chapter as the corresponding chapter of
the textbook is covered. Conversely, students who procrastinate
often find that the project takes more time than they expected
and that it is harder to recall how to make the journal entries
covered in the earlier chapters. Thus, delaying until your
project is nearly due may increase the total time it takes you to
do the project and leave you little time for anything else that
week. So, our advice is to stay current with the project.
Chapter 2Opening the Books
The City of Smithville just implemented a dual-track
computerized accounting system, which provides files for
general journal entries and posting to appropriate general
ledger/subsidiary ledger accounts. Budgetary, operating
statement, and balance sheet accounts are provided for the
General Fundand the other governmental fund types. Operating
statement accounts and balance sheet accounts are also provided
for governmental activities at the government-wide leveland the
proprietary and fiduciary funds of the City of Smithville that
you will use in Chapters 5-9 of the problem. As the city’s new
accountant (lucky you!), it is your job to enter the city’s initial
accounting information as of December 31, 2016, in
preparation for placing the new accounting system in full
operation effective January 1, 2017.
Required
Open the City of Smithville software by clicking on the Cities
of Smithville and Binghamprogram. If creating a new project,
click [Create New Project], when the [Create New Project]
window appears choose City of Smithville from the [Choose a
City] drop down menu. In addition, in the [Enter your name]
box type your name so that it will appear on all printable
reports, and click [Create]. This will create the project and
provide access to all of the funds and accounts that you will