Assume that the City of Kingstown maintains its books and records in a manner that facilitates preparation of the fund financial statements. The city engaged in the following transactions related to its general fund during the current fiscal year. The city formally integrates the budget into the accounting records. The city does not maintain an inventory of supplies. All amounts are in thousands. If appropriate, write No entry required Employees of the City of Kingstown are paid from the general fund semi-monthly on the 15th day and the last day of the month. The city provides numerous employee benefits. Employees earn ten vacation days for each 12 months of employment. The employee can take the vacation during any summer months (May-September) prior to retirement. The employees also earn one sick day for each month of employment. Sick pay vests at the completion of five years of continuous service. Vested unused sick pay will be paid upon retirement or termination. Thecity contributes to a retirement plan that is administered by the state. Each year the city gets a statement from the state explaining the actuarially determined contribution required. The city recognizes revenues/expenditures when collected/paid or if collected/paid within 60 days of year- end. The citys fiscal year end is December 31. At the beginning of the current year employees had $0.4 million of earned vacation time and $7 million of vested earned sick leave. The city uses the FIFO method of accounting for vacation and sick days.

REQUIRED: Assuming that the city maintains its books and records in a manner to facilitate the preparation of fund financial statements, record the following transactions related to employee salaries and benefits.

REQUIRED: Prepare, in summary form, the appropriate journal entries.

a) January 1, the city sold for $4,000 a police car that had been purchased four years ago at a cost of $30,000. At the time of acquisition, the city estimated that the police car had a useful life of five years and a salvage value of $5,000.

b) During the year the city began construction of a new city hall. By year-end, the city had made progress payments to the contractor of $3 million.

c) March 15, the city received a gift of land from a citizen. The land is to be used to build a city park. The land had been in the donors family since it was homesteaded. It had a fair value when contributed of $2 million.

d) During the year employees of the city earned $60 million in salaries. At year-end all but $2 million had been paid to the employees.

e) During the year the employees of the city earned $2.5 million in vacation pay. By year-end the employees had taken $2 million of vacation. Of the balance of vacation pay due to the employees, the city estimates that $0.3 million will be taken during the next year and $0.2 million will be deferred until later.

f) During the year the city purchased $600,000 of expendable supplies.

g) On September 1 the city paid $360,000 for a three-year insurance policy to cover some assets used in general government activities.

h) On December 1 the city purchased four pickup trucks for general government activities. The trucks cost $100,000 in total.

i) On January 1 the city leased some office equipment for use in the administrative offices. The lease qualified as a capital lease. The present value of the minimum lease payments is $96,000.

j) On April 1 the city leased a copying machine. The lease qualified as an operating lease. The terms of the lease require yearly payments of $2,000 each April 1 for 5 years. The city prepaid the entire five years of the lease.