Accounting for Governmental & Nonprofit Entities 18e (Reck)City of Smithville 2019-2020 (Short Version)

Chapter 4 Recording Operating Transactions Affecting the General Fund and Governmental Activities at the Government-wide Level

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 may have made an error.) For the General Fund only you will be directed to the Detail Journal where you will select Accrued Revenue in the drop down[Description] menu when recording property tax revenue.

2. [Para. 4-a-2] Encumbrances were recorded in the following amounts for purchase orders issued against the appropriations indicated:

General Government $135,673

Public Safety 386,652

Public Works 180,804

Culture and Recreation 126,599

Total $829,728

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.

[Para. 4-a-3]Cash was received during the year in the total amount of $4,028,058 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 State Government 165,000

Revenues: (total: $1,953,381)

Licenses and Permits 477,960

Fines and Forfeits 211,106

Intergovernmental 639,000

Charges for Services 625,315

Total $4,028,058

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

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

Charges for Services Program RevenuesGeneral Government

Charges for Services, $343,924

Program RevenuesCulture and Recreation

Charges for Services, $281,391

[Para. 4-a-4]Of the $387,201 in delinquent property taxes collected in transaction 4-a-3 $76,994 had been recorded in the Deferred Inflows of Resources account. Additionally, $7,840 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.

[Para. 4-a-5] General Fund payrolls for the year totaled $3,179,547. Of that amount, $667,705 was withheld for employees' federal income taxes; $453,291 for federal payroll taxes; $238,466 for retirement funds administered by the state government; and the remaining $1,820,085 was paid to employees in cash. The City of Smithville does not record encumbrances for payrolls. The payrolls were chargeable against the following functions:

General Government $ 663,678

Public Safety 1,539,302

Public Works 542,765

Culture and Recreation 433,802

Total $3,179,547

Required: Make summary journal entries for payroll in both the General Fund and governmental activities general journals for the year.