218 CHAPTER 5 Revenue Accounting-Governmental Funds Harvey City Comprehensive Case In this chapter we continue to record the 20x4 transactions of the General Fund of Harvey City. In addition, Harvey City has two Special Revenue Funds -- the Addiction Prevention Special Revenue Fund and the Economic Development Special Revenue Fund. In this chap ter, we will record the transactions of the Addiction Prevention Special Revenue Fund and prepare its financial statements. We will account for the Economic Development Special Revenue Fund in Chapter 6. HARVEY CITY GENERAL FUND REQUIREMENTS Using the worksheet you began in Chapter 4, enter the effects of the following additional 20x4 transactions and events of the Harvey City General Fund in the transactions columns of the worksheet. (A different solution approach may be used if desired by your professor.) 19. The city levied interest and penalties of $35,000 on the overdue taxes receivable. Interest and penalties of $5,600 are expected to prove uncollectible. 20. The city collected $216,000 of delinquent taxes receivable and S27,000 of interest and penal- ties receivable. 21. The city wrote off uncollectible taxes receivable of $23,000 and related interest and penal ties of $4,800. 22. General government equipment with an original cost of $300,000 and accumulated depre- ciation of $187,000 was sold for $72,000, which was deposited in the General Fund. 23. The city formalized tax liens against properties that had claims against them for delinquent taxes of $12,000 and interest and penalties of $800. The estimated salable value of the properties was $14,000 24. The following revenue-related information was available at year end: a. $144,000 of the December 31, 20X4, balance of delinquent taxes receivable and $34,400 of the December 31, 20X4, balance of interest and penalties receivable are nor expected to be col- lected within the first 60 days of 20X5. (The January 1, 20X4, delinquent taxes receivable balance included $79,100 of taxes that were collected after the first 60 days of 20X4, and the January 1, 20X4, interest and penalties receivable balance included $20,900 of interest and penalties on taxes that were collected after the first 60 days of 20X4.) (Hint: Deferred Revenues must be adjusted.) b. Accrued interest receivable on investments at December 31, 20X4, totals $2,700. c. The fair value of General Fund investments at December 31, 20X4, is $800 more than their book value. HARVEY CITY ADDICTION PREVENTION SPECIAL REVENUE FUND The Addiction Prevention Special Revenue Fund was established in 20X4 to account for federal grants intended to help communities prevent and battle drug and alcohol addictions Because this is the first year for this fund, there is no beginning trial balance for the Addiction Prevention Special Revenue Fund. HARVEY CITY ADDICTION PREVENTION SPECIAL REVENUE FUND REQUIREMENTS Prepare a worksheet for the Addiction Prevention Special Revenue Fund similar to the General Fund worksheet you created in Chapter 4. Enter the effects of the following transactions and events in the appropriate columns of the worksheet. (A different solution approach may be used if desired by your professor.) Enter the preclosing trial balance in the appropriate worksheet columns. Enter the preclosing trial balance amounts in the closing entry and postclosing trial balance (balance sheet data) columns, as appropriate. b. c. $1,200,000-none of which is received at this time. Prepare the 20X4 Statement of Revenues, Expenditures, and Changes in Fund Balance for the Addiction Prevention Special Revenue Fund. Prepare the 20X4 balance sheet for the Addiction Prevention Special Revenue Fund. (Assume that all but $60,000 of the resources of the fund at December 31, 20X4 are restricted.) Transactions and Events-20X4 1. The city council adopted the budget for the Addiction Prevention Special Revenue Fund. 2 The city was awarded a federal grant for drug addiction and enforcement programs. The grant requires the city to incur qualifying expenditures, then apply for reimbursement. The for public safety of $525.000. The budget for the funds included estimated grant revenues of $530,000 and appropriations vouchered. The city contracted for and received services costing $450,000 that qualify for reimburse ment under the grant agreement. The expenditures, for the Public Safety function, were 4. The Addiction Prevention Special Revenue Fund borrowed $500,000 from the General Fund on a short-term basis. 5. The city paid $430,000 of the vouchers payable. 6. The city applied for and received reimbursement of $450,000 from the federal grantor agency under the provisions of the grant agreement. 7. The city incurred and vouchered $75,000 of Public Safety expenditures for the Addiction Prevention program: $50,000 of the costs is reimbursable under the grant agreement. The city applied for reimbursement, which is expected early next year. & $250,000 of the loan from the General Fund was repaid. 9. A transfer of $60,000 was received from the General Fund. 10. The budgetary accounts were closed at year end. (Close the budgetary accounts in the transactions columns.) 218 CHAPTER 5 Revenue Accounting-Governmental Funds Harvey City Comprehensive Case In this chapter we continue to record the 20x4 transactions of the General Fund of Harvey City. In addition, Harvey City has two Special Revenue Funds -- the Addiction Prevention Special Revenue Fund and the Economic Development Special Revenue Fund. In this chap ter, we will record the transactions of the Addiction Prevention Special Revenue Fund and prepare its financial statements. We will account for the Economic Development Special Revenue Fund in Chapter 6. HARVEY CITY GENERAL FUND REQUIREMENTS Using the worksheet you began in Chapter 4, enter the effects of the following additional 20x4 transactions and events of the Harvey City General Fund in the transactions columns of the worksheet. (A different solution approach may be used if desired by your professor.) 19. The city levied interest and penalties of $35,000 on the overdue taxes receivable. Interest and penalties of $5,600 are expected to prove uncollectible. 20. The city collected $216,000 of delinquent taxes receivable and S27,000 of interest and penal- ties receivable. 21. The city wrote off uncollectible taxes receivable of $23,000 and related interest and penal ties of $4,800. 22. General government equipment with an original cost of $300,000 and accumulated depre- ciation of $187,000 was sold for $72,000, which was deposited in the General Fund. 23. The city formalized tax liens against properties that had claims against them for delinquent taxes of $12,000 and interest and penalties of $800. The estimated salable value of the properties was $14,000 24. The following revenue-related information was available at year end: a. $144,000 of the December 31, 20X4, balance of delinquent taxes receivable and $34,400 of the December 31, 20X4, balance of interest and penalties receivable are nor expected to be col- lected within the first 60 days of 20X5. (The January 1, 20X4, delinquent taxes receivable balance included $79,100 of taxes that were collected after the first 60 days of 20X4, and the January 1, 20X4, interest and penalties receivable balance included $20,900 of interest and penalties on taxes that were collected after the first 60 days of 20X4.) (Hint: Deferred Revenues must be adjusted.) b. Accrued interest receivable on investments at December 31, 20X4, totals $2,700. c. The fair value of General Fund investments at December 31, 20X4, is $800 more than their book value. HARVEY CITY ADDICTION PREVENTION SPECIAL REVENUE FUND The Addiction Prevention Special Revenue Fund was established in 20X4 to account for federal grants intended to help communities prevent and battle drug and alcohol addictions Because this is the first year for this fund, there is no beginning trial balance for the Addiction Prevention Special Revenue Fund. HARVEY CITY ADDICTION PREVENTION SPECIAL REVENUE FUND REQUIREMENTS Prepare a worksheet for the Addiction Prevention Special Revenue Fund similar to the General Fund worksheet you created in Chapter 4. Enter the effects of the following transactions and events in the appropriate columns of the worksheet. (A different solution approach may be used if desired by your professor.) Enter the preclosing trial balance in the appropriate worksheet columns. Enter the preclosing trial balance amounts in the closing entry and postclosing trial balance (balance sheet data) columns, as appropriate. b. c. $1,200,000-none of which is received at this time. Prepare the 20X4 Statement of Revenues, Expenditures, and Changes in Fund Balance for the Addiction Prevention Special Revenue Fund. Prepare the 20X4 balance sheet for the Addiction Prevention Special Revenue Fund. (Assume that all but $60,000 of the resources of the fund at December 31, 20X4 are restricted.) Transactions and Events-20X4 1. The city council adopted the budget for the Addiction Prevention Special Revenue Fund. 2 The city was awarded a federal grant for drug addiction and enforcement programs. The grant requires the city to incur qualifying expenditures, then apply for reimbursement. The for public safety of $525.000. The budget for the funds included estimated grant revenues of $530,000 and appropriations vouchered. The city contracted for and received services costing $450,000 that qualify for reimburse ment under the grant agreement. The expenditures, for the Public Safety function, were 4. The Addiction Prevention Special Revenue Fund borrowed $500,000 from the General Fund on a short-term basis. 5. The city paid $430,000 of the vouchers payable. 6. The city applied for and received reimbursement of $450,000 from the federal grantor agency under the provisions of the grant agreement. 7. The city incurred and vouchered $75,000 of Public Safety expenditures for the Addiction Prevention program: $50,000 of the costs is reimbursable under the grant agreement. The city applied for reimbursement, which is expected early next year. & $250,000 of the loan from the General Fund was repaid. 9. A transfer of $60,000 was received from the General Fund. 10. The budgetary accounts were closed at year end. (Close the budgetary accounts in the transactions columns.)