1. [Para. 4-a-1] On January 2, 2020, real property taxes were levied for the year in the amount of $1,878,700. It was estimated that 2 percent of the levy would be uncollectible. Required: Record this transaction in both the General Fund and governmental activities journal. (Note: Type 4-a-1 as the paragraph number in the [Add description] field for this entry; 4-a-2 for the next transaction, etc. Careful referencing by paragraph number is very helpful should you need to determine where you may have omitted a required journal entry or made an error.) For the General Fund you will be directed to the Detail Journal. Select Accrued Revenue in the drop down [Description] menu in the Detail Journal related to the General Fund entry. 2. [Para. 4-a-2] Encumbrances were recorded in the following amounts for purchase orders issued against the appropriations indicated: General Government $ 193,220 Public Safety 442,900 Public Works 208,300 Health and Welfare 154,295 Culture and Recreation 143,580 Total $1,142,295 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 [Description] menu. 3. [Para. 4-a-3] Cash was received during the year in the total amount of $5,710,511 for collections from the following receivables and cash revenues, as indicated: Current Property Taxes $1,488,206 Delinquent Property Taxes 387,201 Interest and Penalties Receivable on Taxes 34,270 Due from Other Funds/Internal Receivables 12,000 Due from State Government 165,000 Revenues: (total: $3,623,834) Sales Taxes 1,579,203 Licenses and Permits 477,960 Fines and Forfeits 211,106 Intergovernmental 639,000 Charges for Services 625,315 Miscellaneous 91,250 Total $5,710,511 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 [Description] menu in the Detail Journal related to the General Fund revenue entries.) For purposes of the governmental activities entries at the government-wide level assume the following revenue classifications: General Fund Governmental Activities Sales Taxes General RevenuesTaxesSales Licenses and Permits Program RevenuesGeneral Government Charges for Services Fines and Forfeits Program RevenuesGeneral Government Charges for Services Intergovernmental Program RevenuesPublic SafetyOperating Grants and Contributions, $295,000 Program RevenuesHealth and Welfare Operating Grants and Contributions, $344,000 Charges for Services Program RevenuesGeneral Government Charges for Services, $250,126 Program RevenuesPublic Safety Charges for Services, $93,798 Program RevenuesCulture and Recreation Charges for Services, $281,391 Miscellaneous General RevenuesMiscellaneous, $91,250 4. [Para. 4-a-4] Of the $387,201 in delinquent property taxes collected in transaction 4-a-3, $85,549 had been recorded in the Deferred Inflows of Resources account. Additionally, $7,540 of the interest and penalties collected in 4-a-3 had also been recorded as deferred inflows of resources. Required: In the General Fund recognize the property tax revenues and the interest and penalties revenues related to the deferred inflows of resources. To do this debit the Deferred Inflows of Resources account and credit related property tax revenues and interest and penalties revenues. Select Previous Deferral in the [Description] menu in the Detail Journal. Under accrual accounting the deferral was not recognized in the governmental activities journal; therefore, there is no need to record a journal entry in the governmental activities journal. 5. [Para. 4-a-5] General Fund payrolls for the year totaled $4,401,482. Of that amount, $660,222 was withheld for employees' federal income taxes; $472,193 for federal payroll taxes; $190,798 for employees state income taxes; $220,152 for retirement funds administered by the state government; and the remaining $2,858,117 was paid to employees in cash. The City of Smithville does not record encumbrances for payrolls. The payrolls were chargeable against the following functions appropriations: General Government $ 956,254 Public Safety 1,771,480 Public Works 624,960 Health and Welfare 545,370 Culture and Recreation 503.418 Total $4,401,482 Required: Make summary journal entries for payroll in both the General Fund and governmental activities general journals for the year. 6. [Para. 4-a-6] Invoices for some of the goods recorded as encumbrances in transaction 4-a-2 were received and vouchered for later payment, as listed below. Related encumbrances were canceled in the amounts shown (select Elimination in the drop down [Description] menu in the Detail Journal): Expenditures Encumbrances General Government $ 191,709 $ 191,720 Public Safety 442,870 442,900 Public Works 208,320 208,300 Health and Welfare 153,822 153,800 Culture and Recreation 141,990 142,000 Total $1,138,711 $1,138,720 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 that $38,340 of the amount charged to the Public Works function was for a vehicle and $43,570 of the amount charged to the Culture and Recreation function was for recreation equipment (debit Equipment for these items at the government-wide level). 7. [Para. 4-a-7] During FY 2020, the City of Smithville received notification that the state government would send $150,000 to it at the beginning of the next fiscal year. Based on the citys definition of available for use, the city considers the funds available to use for Public Safetys operating activities in the current reporting period. The budget for the current year included this amount as Intergovernmental Revenue. Required: Record this transaction as a receivable and revenue in the General Fund and governmental activities journals. (Select Accrued Revenue in the [Description] menu in the Detail Journal). At the government-wide level, assume that this item is an operating grant to the Public Safety function. 8. [Para. 4-a-8] Checks were written in the total amount of $2,734,295 during 2020. These checks were in payment of the following items: Vouchers Payable $1,199,264 Due to Other Funds/Internal Payables 6,400 Due to Federal Government 1,126,941 Due to State Government 401,690 Total amount paid $2,734,295 Required: Record the payment of these items in both the General Fund and governmental activities general journals. 9. [Para. 4-a-9] Current taxes receivable uncollected at year-end, and the related Allowance for Uncollectible Current Taxes account, were both reclassified as delinquent. Of the amount classified as delinquent it was determined $87,010 would not be collected within 60 days of the fiscal year end and would therefore be unavailable for use in the current period. As a result the amount was reclassified as deferred inflows of resources. Required: Record the reclassification of the current taxes receivable and related allowance for uncollectible account in the General Fund and governmental activities journals. Reclassify $87,010 of property tax revenue to the Deferred Inflows of Resources account in the General Fund journal only. (Note: To accomplish the reclassification of revenue, debit the revenue account and credit deferred inflows of resources. Select Deferral in the [Description] menu in the Detail Journal.) 10. [Para. 4-a-10] The citys budget for 2020 was legally amended as follows: Estimated Revenues: Decreases Increases Licenses and Permits $ 20,000 Appropriations: Public Safety $ 10,000 Culture and Recreation $ 13,000 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 [Description] field in the Detail Journal.) 11. [Para. 4-a-11] Interest and penalties receivable on delinquent taxes was increased by $40,500; $3,248 of this was estimated as uncollectible and based on past history $8,910 was considered to be unavailable for use in the current fiscal year. Required: Record this transaction in the General Fund and governmental activities journals. The $8,910 classified as unavailable for use is recorded as deferred inflows of resources in the General Fund journal and as revenue in the governmental activities journal. 12. [Para. 4-a-12] Services received by the General Government function of the General Fund from the Solid Waste Disposal Fund amounted to $18,200 during the year. Of this amount, $15,400 was paid in cash and $2,800 remained unpaid at year-end. Required: Record the receipt of these services, amounts paid during the year, and remaining 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 Solid Waste Disposal Fund until instructed to do so in Chapter 7 of this case. 13. [Para. 4-a-13] Delinquent taxes receivable in the amount of $17,150 were written off as uncollectible. Interest and penalties already recorded as receivable on these taxes, amounting to $3,087, were also written off. Additional interest on these taxes that had legally accrued was not recorded since it was deemed uncollectible in its entirety. Required: Record this transaction in the General Fund and governmental activities journals. 14. [4-a-14] In December 2020, the General Fund transferred $17,500 to the Street Improvement Bond Debt Service Fund to assist with an interest payment due on January 1, 2021. 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 Street Improvement Bond Debt Service Fund until instructed to do so in Chapter 6 of this case. 15. [4-a-15] Adjusting Entry. A physical count of consumable supplies at year-end showed an ending balance of $64,420, a decrease of $1,580 during the year. The city uses the purchases method of accounting for its inventory in the General Fund and the consumption method at the government-wide level. Since the city uses a periodic inventory system, both at the fund and governmental levels, it records all purchases of inventory as expenditures in the General Fund and as expenses at the government-wide level. The decrease in inventory requires no adjustment to the expenditure account (since the expenditure was recorded in a prior period); however, an adjustment to the expenses accounts should be made to the General Government function. Required: Prepare the adjusting journal entries in the General Fund journal to adjust the Inventory of Supplies and Fund BalanceNonspendableInventory of Supplies accounts to the correct balances and the governmental activities journal to adjust the ExpensesGeneral Government and Inventory of Supplies accounts. Post all journal entries to the 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. 16. Closing Entry. Following the instructions in the next paragraph, prepare and post the necessary entries to close the General Fund Estimated Revenues, Appropriations, and Estimated Other Financing Uses accounts to Budgetary Fund Balance, and Revenues, Expenditures, and Other Financing Uses to Fund BalanceUnassigned. Because the City of Smithville 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. If, however, 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. To close the temporary accounts, you must click the box for [Closing Entry] that appears when you [Add new entry]. [Closing Entry] checkbox will appear next to the [Add credit] field. Be sure the checkmark in the box for [Closing Entry] is showing as selected before closing each individual account. Also, 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 will need to print the pre-closing version of these ledgers for year 2020 from the [Reports] menu. At year-end, an analysis by the citys 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 BalanceUnassigned and the fund balance accounts corresponding to the constraints shown below. (Note: You should consider the beginning of year balances in fund balance accounts when calculating the amounts to be reclassified. Be sure the check mark in the box for [Closing Entry] is showing as selected before closing each individual account.) Account Ending Balance Fund BalanceRestrictedPublic Safety $36,000 Fund BalanceCommittedHealth and Welfare 43,000 Fund BalanceCommittedPublic Works 12,700 Fund BalanceAssignedCulture and Recreation 0 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.