1. Encumbrances lapse if they are outstanding at the close of a fiscal year; however, the city honors all outstanding encumbrances, reported at the end of 2016 are reported as Fund Balance - Assigned.

2. The city uses the purchases method to record the acquisition of supplies. The year-end supplies inventory is considered to be material and is reported in the city’s financial statements.

Additional Information:

1. Rapid City sold bonds in the amount of $5,400,000 in December 2016 to finance a new city park. The bonds are payable semiannually (June 1 and December 1) over 20 years at 4% per year.

2. In 2016, the State approved a grant for $250,000 to help fund the city park. The grant is collectible within 60 days after year end. The Federal government also approved a grant for $550,000, receivable June 1, 2016.

3. Rapid City uses encumbrance accounting in the Capital Projects Fund.

4. Construction of the park is expected to be completed by the end of 2017. Any amounts remaining in the Capital Projects Fund must be transferred to the Debt Service Fund on completion of the park.

Additional Information:

1. In December, $140,000 was transferred to the Debt Service Fund from the General Fund to pay the first principal payment on the bonds issued in the Capital Projects Fund and provide a small cash balance in the debt service fund.

2. A special assessment tax will be levied over the next 10 fiscal years (2017-2026) to pay for the bond issue.

Please prepare the journal entries and financial statements as governmental fund activities (i.e., fund accounting). Do not prepare or include government-wide activities (i.e., governmental activities).

9. The city levied property taxes at the budgeted amount and established an allowance for uncollectible taxes and discounts equal to 5% of the taxes levied.

10. The city levied the special tax assessment to service the bond issue for the New City Park. The city levied $460,000 in anticipation of realizing net cash of $437,000, establishing a $23,000 allowance for uncollectible taxes and discounts.

11. Purchase orders for supplies were placed in the amount of $(ZZZ, 000 + 10,000).

12. The city entered into two construction contracts for the New City Park: (a) Hillside Construction Co. for $4,825,000 and (b) Palmer Engineering for $675,000.

13. The city collected 95% of the property taxes levied in 2017. Taxpayers deducted $(1% of levied property taxes JE #9) in discounts for early payment of bills.

14. The city repaid the tax anticipation loan, plus interest, to the bank.

15. The city approved encumbrances of $685,000 for “Other program costs”.

16. The General Fund transferred the $135,000 to the Debt Service Fund for principle payment on the Capital Project Fund bonds.

17. The city collected $410,000 of the special assessment tax bills, after taxpayers deducted $3,200 in discounts for early payment.

18. All remaining unpaid special assessment taxes were declared delinquent. The city comptroller concluded that a 1% allowance for uncollectible taxes is necessary for the delinquent special assessment taxes.

19. The city paid 65% of the budgeted amount to operate the food inspection program.

20. The city received $500,000 of the federal grant for the construction of the New City Park. Based on the provisions of the grant, the city recognized the amount received as revenue. The grant stipulated that the park must be completed by the end of the fiscal year in order to receive the remaining $50,000 pledged to the project.

Rapid City General Fund Postclosing Trial Balance December 31, 2016 Debits Credits Cash $ 295,600 Property Taxes Receivable - Deliquent 57,000 Allowance for Uncollectible Delinquent Taxes 3,500 Interest and Penalties Receivable 4,200 Allowance for Uncollectible Interest & Penalties 200 Supplies Inventory 7,700 Vouchers Payable 36,400 Due to Federal Government 2,800 Fund Balance - Nonspendable - Supplies Inventory Fund Balance - Assigned 7,700 3,300 Fund Balance - Unassigned 310,600 $ 364,500 $ 364,500 %24