Chapter 4

The Balance Sheet of the Street and Highway Fund of the City of Monroe as of December 31, 2016, follows. These (beginning) balances have been entered in the proper general ledger accounts, as of 1/1/2017. Continuous Problem City of Monroe 2 CITY OF MONROE Street and Highway Fund Balance Sheet As of December 31, 2016 Assets Cash $23,000 Investments 59,000 Due from state government 107,000 Total assets $189,000 Liabilities and Fund Equity Liabilities: Accounts payable $9,000 Fund equity: Fund balanceassigned for streets and highways 180,000 Total liabilities and fund equity $189,000.

4C. Special Revenue Fund Transactions Required: a. Record journal entries for the following transactions for FY 2017 and post to the general ledger. As there are relatively few revenues and expenditures, the use of control accounts is not necessary. (Make entries directly to individual revenue and expenditure accounts). (1) The state government notified the City that $1,065,000 will be available for street and highway maintenance during 2017 (i.e. the City has met eligibility requirements). The funds are not considered reimbursement-type as defined by GASB standards. (2) Cash in the total amount of $997,000 was received from the state government. (3) Contracts, all eligible for payment from the Street and Highway Fund, were signed in the amount of $1,062,000. (4) Contractual services (see transaction 3) were received; the related contracts amounted to $1,042,000. Invoices amounting to $1,040,500 for these items were approved for payment. The goods and services all were for street and highway maintenance. (5) Investment revenue of $5,120 was earned and received. (6) Accounts payable were paid in the amount of $923,000. (7) All required legal steps were accomplished to increase appropriations in the amount of $4,500.

b.) Prepare and post the necessary closing entries for the Street and Highway Fund.

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V5 fx A B E F F GH 1 J K L M N O P R S T U 1 reference Account Titles Debits Credits CASH 23,000 INVESTMENTS 59,000 DUE FROM STATE GOV'T 107.000 bb bb 3-C type debit accounts in this column type credit accounts in this column 4-C 23,000 59,000 107,000 ACCOUNTS PAYABLE 9,000 bb TOTAL FUND BALANCE (beginning of year) 180,000 lb 9,000 180,000 REVENUES INTERGOVERNMENTAL REVENUES INVESTMENT INTEREST EXPENDITURES - STREET & HIGHWAY MAINTENANCE 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 29 30 31 32 33 34 35 36 37 38 39 40 41 42 43 44 45 46 47 48 49 50 BUDGETARY ACCOUNTS BUDGETARY FUND BALANCE ESTIMATED REVENUES APPROPRIATIONS BUDGETARY FUND BALANCE RESERVE FOR ENCUMBRANCES bb ENCUMBRANCES Total Debits Total Credits 189,000 189,000 SRF Entries & T-accounts Closing Entries Stmt of revenues & expenditures Balance Sheet + JX A B D E F G . OWN 1 2 3 4 Account Title Debits Credits BUDGETARY FUND BALANCE 21,000 Preclosing closing entry 5 6 7 8 21,000 FUND BALANCE 180,000 Preclosing AWN closing entry 180,000 ending balance 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 29 30 31 Complete the following table Non-spendable Restricted Committed Assigned Unassigned Total Fund Balance 32 SRF Entries & T-accounts Closing Entries Stmt of revenues & expenditures Balance She A MID