Chapter 3 Recording the Annual Budget

The following budget for the General Fund of the City of Smithville was legally adopted for the fiscal year ending December 31, 2020.

Estimated Revenues:

Taxes:
Real Property	$1,841,126
Sales	1,578,000
Interest and Penalties on Taxes	37,000
Licenses and Permits	500,000
Fines and Forfeits	210,000
Intergovernmental Revenue	789,000
Charges for Services	624,720
Miscellaneous Revenues	91,300
Total Estimated Revenues	$5,671,146

Appropriations:

General Government	$1,169,500
Public Safety	2,206,000
Public Works	834,000
Health and Welfare	700,000
Culture and Recreation	660,500
Total Appropriations	$5,570,000

Estimated Other Financing Sources and Uses:

Interfund Transfers Out

$ 17,500

Required

1. After opening the file you created for Chapter 2 of this project, record the budget in the general journal, providing entries in the Detail Journal when directed. Begin by selecting [General Fund] in the "Current accounting entity" dropdown menu from the [Journal] tab. Click on the [Add new entry] to start your entry. In the [Year] field, be sure to select the year 2020. Enter 3-a in the [Add description] field. Select Estimated Revenues in the drop down [Account] window. Click [Add subsidiary] to go to the Detail Journal where you will enter the detail for each estimated revenue source. In the Detail Journal, select "Budget Authorization" from the drop-down menu for [Description].

   When you have finished entering the estimated revenue detail information, verify that the correct total amount is shown in the Detail Journal, then click on [Add entry and return to Journal] and the total estimated revenues will be entered in the general journal Estimated Revenues control account. Follow the same procedure to record the budget detail for Appropriations. To complete this entry debit or credit Budgetary Fund Balance as appropriate to balance the budgetary entry.

   To finish recording the budget debit Budgetary Fund Balance and credit Estimated Other Financing UsesInterfund Transfer Out for $17,500. Note that budgetary entries have no effect on governmental activities at the government-wide level and thus the budget information is only recorded in the General Fund.

   When you are satisfied you have made the entries correctly, post them to the general ledger by clicking on [Post entries]. Before posting, or after unposting as described previously, you can edit, delete or insert entries in the journal by placing the cursor in the line you want to adjust and then right-clicking. Note that the "Insert Entry" function will work if you are inserting an entry prior to a balance sheet account. However, it will not work when inserting an entry prior to any account that has an associated subsidiary ledger (e.g., estimated revenues, expenditures).

2. Go to [Reports], print the pre-closing subsidiary ledgers and pre-closing trial balance for year 2020 and retain them in your cumulative file until directed by your instructor to submit them, or submit saved versions of these documents electronically if directed to do so by your instructor. As of this time, only the budget has been recorded. This is your last opportunity to print or export these documents with budget information only. After operating transactions have been journalized and posted in Chapter 4, subsidiary ledgers and trial balances will contain both budgetary and operating accounts and balances.