Chapter 8 Recording Fiduciary Fund TransactionsA Tax Custodial Fund The City of Bingham administers a tax custodial fund that bills and collects property taxes levied by the governing bodies of the Bingham School District (BSD) and the Sunrise County Library (SCL), in addition to those levied by the City of Bingham for its General Fund and debt service fund. As permitted by state law, the City of Bingham charges a collection fee of 1 percent of all taxes collected for the other governments. CITY OF BINGHAM Tax Custodial Fund Post-closing Trial Balance As of December 31, 2022 Account Title Debits Credits Taxes Receivable for Other Funds and $1,684,422 GovernmentsDelinquent (including related interest and penalties) Due to Other Funds $ 548,562 Net PositionRestricted for Other Governments 1,135,860 Totals $1,684,422 $1,684,422 Required a. Open a general journal as of December 31, 2022, for the Tax Custodial Fund by entering the accounts and amounts shown in the above post-closing trial balance. Enter 2022 from the drop-down [Year] menu. Each of the account titles will be found in the drop-down menu [Account] in the [Journal] view of the program. Be sure to enter 8a as your paragraph number in the [Add description] field. Verify the accuracy of your journal entry and post it to the general ledger by clicking [Post entries]. Unless your instructor specifies electronic submission, print a post-closing trial balance as of December 31, 2022 and retain it in your cumulative file until directed by your instructor to submit it. [Note: Entries in this fund are not recorded at the government-wide level. Fiduciary activity information is reported only in the fiduciary fund statements and not at the government-wide level.] b. The following schedule shows the tax rates that have been established by the various taxing authorities for fiscal year 2023. Tax Rates Applicable to Governments Served by the Tax Custodial Fund Fiscal Year 2023 (All amounts rounded to next higher dollar) Tax Rate (Per $100 Assessed Tax Governments/Funds of Assessed Valuation) Valuation Levy City of Bingham: General Fund $0.55 $1,409,090,909 $7,750,000 Debt service fund 0.05 704,545 Total city rate and levy $0.60 $8,454,545 Bingham School District: General Fund $2.20 $570,782,907 $12,557,224 Debt service fund 0.10 570,783 Total SD rate and levy $2.30 $13,128,007 Sunrise County Library: General Fund $0.90 $275,624,864 $2,480,624 Total SCL rate and levy $0.90 $2,480,624 Grand Total tax rates and levies* $3.80 $24,063,176 * Note: Each property owner will receive a tax bill equal to the tax rates of all taxing authorities that have jurisdiction over his/her property times the assessed valuation of his/her property. Shown above are the aggregate taxes levied by each government, which are also the total amounts billed by the Tax Custodial Fund to all taxpayers in each jurisdiction. Record the following transactions that occurred during 2023 in the general journal of the Tax Custodial Fund. 1.

[Para. 8b-1] On January 2, 2023, the citys tax administrator mailed annual tax bills to all property owners in the total amount of $24,063,176 (see preceding table). The tax administrator maintains a detailed tax ledger to track amounts billed to and collected from each taxpayer and total amounts applicable to each fund and government. Required: Record the total amount for the city and the total amount for the other governments shown in the schedule above in the general journal, as illustrated in Chapter 8 of the textbook.

2. [Para. 8b-2] Delinquent taxes and related interest and penalties were collected during the year for the taxing authorities shown below: Delinquent Interest and Governments/Funds: Taxes Penalties Total City of Bingham General Fund $378,000 $22,860 $400,860 City of Bingham debt service fund 9,900 630 10,530 Bingham School District 45,980 1,400 47,380 Sunrise County Library 16,435 759 17,194 Total collected $450,315 $25,649 $475,964 Required: Record the collections of delinquent taxes and interest and penalties.

3. [Para. 8b-3] The 1 percent collection fee was assessed on the Bingham School District and the Sunrise County Library collections. Calculate the 1 percent collection fee on the amounts due to other governments; the total collection fee from other governments should be recorded as DeductionsAdministrative Fee and a Due to Other Funds for the amount due to the City of Bingham General Fund. (Note: Round all amounts to the nearest whole dollar.) All cash receipts and collection fees were recorded in earlier chapters in the journals for the General Fund, debt service fund, and governmental activities at the government-wide level. The collection fees, though not separately identified, were included in RevenuesCharges for Services in the General Fund and in Program RevenuesGeneral GovernmentCharges for Services in governmental activities.

4. [Para. 8b-4] All cash collected in paragraph 8-b-2 was transferred to the other funds and governments in the amounts calculated, adjusted for collection fees deducted or added (see Para. 8-b-3).

5. [Para. 8b-5] Current taxes were collected during the year for the funds and governments shown below: Current Taxes Funds/Governments: __Collected__ City of Bingham General Fund $ 7,302,000 Bingham debt service fund 695,500 Bingham School District 12,869,800 Central County Library 2,147,540 Total collected $23,014,840 Required: Record the collections of current taxes, make these entries only in the Tax Custodial Fund general journal.

6. [Para. 8b-6] The 1 percent collection fee was assessed on the Bingham School District and the Sunrise County Library collections. Calculate the 1 percent collection fee on the amounts due to other governments; the total collection fee from other governments should be recorded as DeductionsAdministrative Fee and a Due to Other Funds for the amount due to the City of Bingham General Fund. (Note: Round all amounts to the nearest whole dollar.) Make these entries only in the Tax Custodial Fund general journal.

7. [Para. 8b-7] All cash collected in paragraph 8-b-5 was transferred to the other funds and governments, adjusted for collection fees deducted or added (see 8b-6).

8. [Para. 8b-8] Make the year-end journal entry to reclassify all uncollected receivables as delinquent. Add to the receivable amount interest and penalties of $82,195 on the reclassified amount. The interest and penalties portion of the total amount should be debited to Taxes Receivable for Other Funds and GovernmentsDelinquent and credited to Due to Other Funds for the City of Smithville portion of $41,430 and AdditionsInterest and Penalties Collections for Other Governments for the remaining $40,765.

9. [Para. 8b-9] Make the year-end closing journal entry to close deductions and additions to Net PositionRestricted for Other Governments.

c. Post the journal entries for all the preceding transactions. Prepare closing entries to close the additions and deductions accounts. Export a post-closing trial balance for 2023 to prepare a statement of fiduciary net position for the Tax Custodial Fund (for an example of a custodial fund statement, see the last column of Illustration 8-6 of the textbook). You should deduct the citys General Fund and debt service fund portions of delinquent taxes receivable and related interest and penalties receivable from the amounts recorded as Taxes Receivable for Other Funds and GovernmentsDelinquent. The same amount should be deducted from the liability account Due to Other Funds and Governments. The citys General Fund portion of these account balances must be deducted as only the amounts applicable to other governments can be reported in a fiduciary fund statement. Taxes receivable and interest and penalties receivable that are applicable to the city itself were reported in the General Fund balance sheet that you prepared in Chapter 4 of this project.

d. Use the exported pre-closing 2023 trial balance to prepare a statement of changes in fiduciary net position for the Tax Custodial Fund (for an example of a custodial fund statement, see the last column of Illustration 8-7 of the textbook). [Note: Retain the post-closing trial balance as of December 31, 2023, the statement of fiduciary net position, and the statement of changes in fiduciary net position in your cumulative folder, unless your instructor requests electronic submission of your documents, in which case you will need to save a .pdf version of you trial balances.] Before closing the City of Bingham it is recommended that you save a backup copy of your work to another location by clicking on [File] and [Save As] for Windows and Mac. Click on Export my Project if you are using the Chromebook version.