Bingham Chapter 4 2017 Fiscal Year

1. [Para. 4-a-1] Property taxes were levied in the amount of $6,875,000. It is estimated that 4 percent of the tax will 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 [Transaction Description] box 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.) Select Accrued Revenue in the drop down [Transaction Description] menu in the Detail Journal related to the General Fund entry.

[Para. 4-a-2] Tax anticipation notes were issued in the amount of $500,000.

Required: Record the issuance of this note in both the General Fund and governmental activities general journals.

[Para. 4-a-3]Purchase orders, contracts, and other commitment documents were issued in the following amounts for the following functions:

General Government $ 395,000

Public Safety 1,095,000

Public Works 945,750

Health and Welfare 665,725

Culture and Recreation 625,125

Miscellaneous 138,000

Total $3,864,600

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 [Transaction Description] menu. You can also type in an alternative description, if desired.

[Para. 4-a-4] Grant funds of $30,000 recorded as Deferred Inflow of Resources-Operating Grants and Contributions at the end of FY 2016 were recognized as revenue when timing requirements were met.

Required: Record the revenue in both the General Fund and governmental activities general journals by debiting Deferred Inflow of Resources-Operating Grants and Contributions and crediting Revenue. (This amount was included as Miscellaneous Revenue in the General Fund and Program Revenues-Culture and Recreation-Operating Grants at the government-wide level.)

[Para. 4-a-5] The General Fund paid $385,000 on the vouchers payable that were outstanding at the end of FY 2016.

Required: Record the payment of this amount in both the General Fund and governmental activities general journals.

[Para. 4-a-6] The General Fund collected the following amounts in cash:

Current year Real Property Taxes $6,364,000

Delinquent Taxes 468,000

Interest and Penalties Receivable on Taxes 23,860

Sales Taxes 748,000

Licenses and Permits 478,000

Fines and Forfeits 525,000

Intergovernmental Revenues 510,000

Charges for Services 361,000

Miscellaneous Revenues 226,500

Total $9,704,360

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 [Transaction Description] menu in the Detail Journal related to the General Fund revenue entries.) For governmental activities at the government-wide level, all Licenses and Permits and Charges for Services were attributable to the General Government function as Program Revenue. Fines and forfeits were collected by General Government departments in the amount of $200,000 and by Public Safety departments in the amount of $325,000. Intergovernmental Revenues should be credited to Program RevenuesGeneral GovernmentOperating Grants and Contributions.

[Para. 4-a-7] The General Fund paid the $14,300 reported as Due to Other Funds at the end of FY 2016. This amount was reported as Internal Payables to Business-type Activities at the government-wide level. (Note: Do not record this transaction in the Water Utility Fund until instructed to do so in Chapter 7 of this case.)

Required: Record the payment of this amount in both the General Fund and governmental activities general journals.

[Para. 4-a-8] Delinquent taxes receivable in the amount of $26,000 were written off as uncollectible. Interest and penalties accrued on these taxes in the amount of $1,300 were also written off.

Required: Record the writeoffs in both the General Fund and governmental activities general journals.

[Para. 4-a-9] General Fund payrolls for the year totaled $5,083,038. Of that amount, $772,395 was withheld for employees' federal income taxes; $860,456 for federal payroll taxes; $290,798 for employees state income taxes; $320,152 for retirement funds administered by the state government; and the remaining $2,839,237 was paid to employees in cash. The City of Bingham does not record encumbrances for payrolls. The payrolls were chargeable against the following functions appropriations:

General Government $ 1,300,376

Public Safety 2,331,644

Public Works 790,481

Health and Welfare 311,673

Culture and Recreation 348,864

Total $5,083,038

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

[Para. 4-a-10] Invoices for some of goods and services ordered in transaction 4-a-3 were received and vouchered for later payment. (Select Elimination in the drop down [Transaction Description] menu in the Detail Journal):

Actual Estimated

General Government $ 395,940 $ 394,060

Public Safety 1,086,650 1,088,600

Public Works 922,300 927,620

Health and Welfare 661,200 663,600

Culture and Recreation 593,750 597,000

Miscellaneous 138,000 138,000

Totals $3,797,840 $3,808,880

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 for $72,500 of playground equipment ordered by Culture and Recreation. The equipment meets the citys threshold for capitalization (debit Equipment for this item at the government-wide level). Expenditures charged to the miscellaneous appropriation should be recorded in this case as General Government expenses at the government-wide level.

[Para. 4-a-11] The General Fund paid vouchers during the year in the amount of $3,200,000 as well as its liabilities for employees federal and state income taxes withheld and payroll taxes.

Required: Record the payment of these items in both the General Fund and governmental activities general journals.

[Para. 4-a-12] The General Fund transferred $50,000 to the debt service fund so the debt service fund could make a bond interest payment.

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 debt service fund until instructed to do so in Chapter 6 of this case.)

[Para. 4-a-13] Tax anticipation notes issued by the General Fund were paid at maturity at the face amount plus interest of $10,000.

Required: Record the payment of these items in both the General Fund and governmental activities general journals. For the General Fund charge Miscellaneous for the interest expenditure. At the government-wide level, debit ExpensesInterest on Tax Anticipation Notes.

[Para. 4-a-14] The General Fund recorded liabilities of $50,000 to other funds for services received from the Water Utility Fund during the year. Of this amount, $39,000 should be charged to Public Safety and $11,000 to General Government.

Required: Record the receipt of these services and the associated 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 Water Utility Fund until instructed to do so in Chapter 7 of this case.

[Para. 4-a-15] The balances in the current taxes receivable and related estimated uncollectibles accounts were reclassified as delinquent. Interest and penalties of $56,580 were recorded on the delinquent taxes, of which $10,500 was estimated to be uncollectible.

Required: Record this transaction and reclassification in the General Fund and governmental activities journals.

[Para. 4 a-16] In view of unexpected revenue and expenditure developments the city council revised the budgets for the current year as shown below:

Budget Adjustments

Estimated Revenues:

Intergovernmental Revenue $ 15,000 decrease

Fines and Forfeits 15,000 increase

Miscellaneous Revenue 31,500 increase

Appropriations:

Public Safety $ 20,000 decrease

Health and Welfare 10,000 increase

Miscellaneous 50,000 decrease

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 [Transaction Description] box in the Detail Journal.)

Post all journal entries to the general and subsidiary 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.

[Closing Entry] Following the instructions in the next paragraph, prepare and post the necessary entries to close the 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 Bingham 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. However, if 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, although entries are not required in this problem for the next year.

To close the temporary accounts, you must click on the check mark for [Closing Entry], Closing Entry will appear in the [Transaction Description] box. Be sure the check mark in the box for [Closing Entry] is showing before closing each individual account. Also, with the exception of Estimated Other Financing UsesInterfund Transfers Out and Other Financing UsesInterfund Transfers Out, 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 should first print the pre-closing version of these ledgers for year 2017 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 in calculating the amounts to be reclassified.)

Account Amount

Fund BalanceAssignedCulture and Recreation $57,650

Fund BalanceAssignedHealth and Welfare 25,000

Fund BalanceCommittedPublic Safety 12,300

Fund BalanceCommittedPublic Works 33,790

I only need Para 4-a-15, Para 4-a-16, and the Closing entries.