• (Budgetary and Other EntriesGeneral and Subsidiary Ledgers) The Murphy County Commissioners adopted the following General Fund budget for the 20X8 fiscal year:

  Murphy County General Fund Budget20X8
  Estimated Revenues:
  Taxes	$ 8,000,000
  Licenses and permits	800,000
  Intergovernmental	2,000,000
  Charges for services	200,000
  Fines and forfeits	400,000
  Other	600,000
  	12,000,000
  Appropriations:
  General government	1,000,000
  Public safety	4,000,000
  Highways and streets	5,000,000
  Health and sanitation	900,000
  Culture and recreation	400,000
  Other	600,000
  	11,900,000
  Excess of Estimated Revenues over Appropriations	100,000
  Fund BalanceBeginning	1,400,000
  Fund BalanceEnding (Anticipated)	$1,500,000

  The following events occurred during 20X8:

  1. Purchase orders issued and contracts let were expected to cost:

     General government	$ 300,000
     Public safety	1,200,000
     Highways and streets	2,500,000
     Health and sanitation	500,000
     Culture and recreation	300,000
     Other	200,000
     	$ 5,000,000

  2. The commissioners reviewed the budget during the year and (a) revised the estimate of Intergovernmental Revenues to $1,500,000 and reduced the Public safety and Highways and streets appropriations by $225,000 each to partially compensate for the anticipated decline in intergovernmental revenues, and (b) increased the Health and sanitation appropriation by $70,000 because of costs incurred in connection with an unusual outbreak of Tasmanian flu.

  3. Revenues (actual) for 20X8 were:

     Taxes	$ 8,150,000
     Licenses and permits	785,000
     Intergovernmental	1,520,000
     Charges for services	210,000
     Fines and forfeits	395,000
     Other	500,000
     	$11,560,000

  4. Goods and services under purchase orders and contracts were received:

     	Estimated Cost	Actual Cost
     General government	$ 280,000	$ 278,000
     Public safety	900,000	910,000
     Highways and streets	2,500,000	2,500,000
     Health and sanitation	440,000	440,000
     Culture and recreation	300,000	295,000
     Other	180,000	181,000
     	$4,600,000	$4,604,000

     The remaining orders are still outstanding.

  5. Other expenditures incurred were:

     General government	$ 700,000
     Public safety	2,560,000
     Highways and streets	2,271,000
     Health and sanitation	485,000
     Culture and recreation	45,000
     Other	391,000
     	$6,452,000

• P3-3 (Budgetary Comparison Statement) This problem is based on the information about the Murphy County General Fund budgeted and actual transactions and events described in Problem 3-2.

  Required

  1. Prepare a budgetary comparison statement for the General Fund of Murphy County for the 20X8 fiscal year. The statement should present revenues (by source category), expenditures and encumbrances (by function), and the excess of revenues over (under) expenditures and encumbrances. Use these column headings:

     • Original Budget

     • Revised Budget

     • Actual

     • VarianceOver (Under)

     Assume that no encumbrances were outstanding at the beginning of 20X8.

  2. Because encumbrances do not constitute expenditures, some governmental fund budgetary comparison statements omit data on encumbrances. (a) If no encumbrances were outstanding at the beginning of 20X8, what effects would omission of encumbrances data have on the Murphy County General Fund budgetary comparison statement for the 20X8 fiscal year? (b) In what circumstances would including or excluding encumbrances data mislead users of a governmental fund budgetary comparison statement?