Chapter 2 Opening the Books

The City of Smithville just implemented a dual-track computerized accounting system, which provides files for general journal entries and posting to appropriate general ledger/subsidiary ledger accounts. Budgetary, operating statement, and balance sheet accounts are provided for the General Fund and the other governmental fund types. Operating statement accounts and balance sheet accounts are also provided for governmental activities at the government-wide level and the proprietary and fiduciary funds of the City of Smithville that you will use in Chapters 5-9 of the problem. As the citys new accountant (lucky you!), it is your job to enter the citys initial accounting information as of December 31, 2016, in preparation for placing the new accounting system in full operation effective January 1, 2017. Required Open the City of Smithville software by clicking on the Cities of Smithville and Bingham program. If creating a new project, click [Create New Project], when the [Create New Project] window appears choose City of Smithville from the [Choose a City] drop down menu. In addition, in the [Enter your name] box type your name so that it will appear on all printable reports, and click [Create]. This will create the project and provide access to all of the funds and accounts that you will need to complete the Full Version City of Smithville cumulative problem. To protect yourself from possible hard drive failure or corruption of your project data file, we recommended that you save your file to not only your hard drive but also another location (e.g., flash drive or the cloud), creating a backup file for your project at the end of each session. To open an existing project, click on [Open Existing Project] in the opening window. If it is not already displayed, select [General Fund] in the [Current Accounting Entity] window and the [Accounts] tab. Clicking on the [Accounts] tab allows you to see the chart of accounts that will be used for the [General Fund]. A different chart of accounts is provided for each of the accounting entities. Next, select the [Journal] tab and click the drop down menu for [Account (# - Description)]. You will see the same general ledger accounts that were listed when you clicked on the [Accounts] tab. (Note: For purposes of this exercise, date suffixes are omitted from the Expenditures and Encumbrances accounts as expenditures occur only from a single years appropriations.) You will not use all of the accounts listed for this project. The trial balance for the General Fund of the City of Smithville as of December 31, 2016, follows. Select the [Journal] tab and create a journal entry to enter the balance sheet accounts and amounts shown in the trial balance (review software operating procedures in Chapter 1 of these instructions if necessary). Be sure to enter 2016 from the drop-down [Year] menu and enter the paragraph number from these instructions in the [Transaction Description] box of the [Journal]. For this entry you should enter 2-b. Select the appropriate accounts individually and insert the appropriate amounts. (Note: Enter all dollar amounts without dollar signs, without commas, and without decimal points. All amounts in this project should be rounded to the nearest whole dollar unless instructed otherwise. For all entries, it is vitally important that the correct year be selected.) You must enter each account and amount one line at a time by clicking [Add Entry]. The year and transaction description need only be entered for the first line of the journal entry; it will remain selected for the rest of the accounts. When you have completed entering all account data and amounts, verify your entries, including date and paragraph numbers. When you are sure that your entries are correct, click [Post Entries] to post the items to the general ledger of the General Fund.

CITY OF SMITHVILLE General Fund Post-Closing Trial Balance As of December 31, 2016

General Ledger Account Title Debits Credits Cash $ 376,290 Taxes ReceivableDelinquent 391,756 Allowance for Uncollectible Delinquent Taxes $ 70,650 Interest and Penalties Receivable on Taxes 40,126 Allowance for Uncollectible Interest and Penalties 13,190 Due from Other Funds 12,000 Due from State Government 165,000 Inventory of Supplies 66,000 Vouchers Payable 272,187 Due to Other Funds 6,400 Due to Federal Government 135,720 Due to State Government 32,600 Fund BalanceNonspendableInventory 66,000 of Supplies Fund BalanceRestrictedPublic Safety 15,000 Fund BalanceCommittedPublic Works 29,700 Fund BalanceAssignedCulture and Recreation 56,800 Fund BalanceUnassigned 352,925 Totals $1,051,172 $1,051,172 Unpost capability. As discussed in Chapter 1 of these instructions, the City of Smithville software program permits students to unpost a particular batch of posted transactions. Unposted entries then can be edited and re-posted. In addition, any omitted entries can be inserted above a selected journal line in any unposted batch of entries. Recall from Chapter 1 that the insert function will not work when you try to insert above an account that has a related subsidiary ledger. Prior to unposting a batch, all batches must be posted. Select [Reports, Trial Balances, Post-Closing Trial Balance] and print or save as a .pdf file the post-closing trial balance for year 2016. Retain the printed trial balance in your personal cumulative folder until the due date assigned by your instructor for the project, or submit a saved version of the trial balance electronically if directed to do so by your instructor. Select [Governmental Activities, Government-wide Level] in the [Current Accounting Entity] drop-down box and the [Accounts] tab. You will see most of the accounts included in the preceding trial balance, plus many other accounts that will be used in the various chapters of the City of Smithville project. Select the [Journal] tab and create a journal entry to enter the statement of net position (i.e., balance sheet) accounts and amounts shown in the following trial balance. It is necessary to enter these items in the accounts of the governmental activities category at the government-wide level as the general journal and general ledger for governmental activities comprise a separate set of books from those for the General Fund. Be sure to enter 2016 from the drop-down date menu and enter 2-d in the [Transaction Description] box. Select each account individually and insert the appropriate debit or credit amount for each account. When you have completed entering the initial data, verify the accuracy and click [Post Entries] to post the entry to the governmental activities, government-wide general ledger.

CITY OF SMITHVILLE Governmental Activities Government-wide Level Post-Closing Trial Balance As of December 31, 2016 General Ledger Account Title Debits Credits Cash $ 376,290 Taxes ReceivableDelinquent 391,756 Allowance for Uncollectible Delinquent Taxes $ 70,650 Interest and Penalties Receivable on Taxes 40,126 Allowance for Uncollectible Interest and Penalties 13,190 Due from State Government 165,000 Internal Receivables from Business-type Activities 12,000 Inventory of Supplies 66,000 Land 4,180,000 Infrastructure 9,862,000 Accumulated DepreciationInfrastructure 2,713,944 Buildings 6,296,000 Accumulated DepreciationBuildings 1,731,000 Equipment 3,556,800 Accumulated DepreciationEquipment 1,765,480 Vouchers Payable 272,187 Due to Federal Government 135,720 Due to State Government 32,600 Internal Payables to Business-type Activities 6,400 Net PositionNet Investment in Capital Assets 17,684,376 Net PositionRestricted for Public Safety 15,000 Net PositionUnrestricted 505,425 Totals $24,945,972 $24,945,972 e. Select [Reports, Trial Balances, Post-Closing Trial Balance] and print the trial balance for 2016, or submit a saved .pdf version of the trial balance electronically if directed to do so by your instructor. Retain in your cumulative file until the due date for your project or the time specified by your instructor. Before closing the City of Smithville, click on [File], and [Save/Save As] to save your work. If you close the file by clicking on the [X] box you will be asked if you want to save your changes before closing.