City of Bingham Chapter 4 Journal Entries

Para. 4-a-15: The year-end balance of supplies inventory is $12,000.

Required: Adjust the inventory of supplies account in both the general fund and governmental activities journals. At the government-wide level expenses in General Government can be reduced by $9,000 and Culture and Recreation can be reduced by $3,000. In the general fund, the fund balance should be classified as non-spendable.

Chapter 4 Recording Operating Transactions Affecting the General Fund and Governmental Activities at the Government-wide Level

Presented below are a number of transactions for the City of Bingham that occurred during the 2020 fiscal year; the year for which the budget given in Chapter 3 was recorded. Read all instructions carefully.

1. After opening the data file containing your data from Chapters 2 and 3 of this project, record the following transactions in the general journal for the General Fund and, if applicable, in the general journal for governmental activities at the government-wide level. For all entries, the date selected should be year 2020. For each of the paragraphs that requires entries in both the General Fund and governmental activities journals, you can either record them in both journals on a paragraph-by-paragraph basis or, alternatively, record all the General Fund journal entries first for all paragraphs, then complete the governmental activities journal entries for all paragraphs. If you choose the latter method, it might be useful to print the General Fund general journal entries to assist in making the entries in the governmental activities journal. Regardless of the method you choose, we recommend that you refer to the illustrative journal entries in Chapter 4 of the Reck Lowensohn, and Neely textbook (18^th edition) for guidance in making all entries.

1. [Para. 4a-1] Property taxes were levied in the amount of $7,075,000. It is estimated that 4 percent of the tax will be uncollectible.

2. [Para. 4a-2] Tax anticipation notes were issued in the amount of $500,000.
3. [Para. 4a-3] Purchase orders, contracts, and other commitment documents were issued in the following amounts for the following functions:

General Government $ 395,000

Public Safety 1,095,000

Public Works 985,750

Health and Welfare 665,725

Culture and Recreation 625,125

Miscellaneous 98,000

Total $3,864,600

4. [Para. 4a-4] Grant funds of $30,000 recorded as Deferred Inflows of Resources at the end of FY 2019 were recognized as revenue when timing requirements were met.
5. [Para. 4a-5] The General Fund paid $165,000 on the vouchers payable that were outstanding at the end of FY 2019.
6. [Para. 4a-6] The General Fund collected the following amounts in cash:

Current year Real Property Taxes $6,484,000

Delinquent Taxes 348,000

Interest and Penalties Receivable on Taxes 23,860

Sales Taxes 748,000

Licenses and Permits 479,000

Fines and Forfeits 519,000

Intergovernmental Revenues 515,000

Charges for Services 361,000

Miscellaneous Revenues 226,500

Total $9,704,360

7. [Para. 4a-7] The General Fund paid the $22,400 reported as Due to Other Funds at the end of FY 2019. This amount was reported as Internal Payables to Business -type Activities at the government-wide level. (Note: Do not record this transaction in the Water Utility Fund until instructed to do so in Chapter 7 of this case.)
8. [Para. 4a-8] Delinquent taxes receivable in the amount of $18,000 were written off as uncollectible. Interest and penalties accrued on these taxes in the amount of $1,300 were also written off.
9. [Para. 4a-9] General Fund payrolls for the year totaled $5,673,038. Of that amount, $867,975 was withheld for employees' federal income taxes; $964,416 for federal payroll taxes; $324,551 for employees state income taxes; $357,312 for retirement funds administered by the state government; and the remaining $3,158,784 was paid to employees in cash. The City of Bingham does not record encumbrances for payrolls. The payrolls were chargeable against the following functions appropriations:

General Government $ 1,500,376

Public Safety 2,531,644

Public Works 790,481

Health and Welfare 401,673

Culture and Recreation 448,864

Total $5,673,038

10. [Para. 4a-10] Invoices for some of goods and services ordered in transaction 4a-3 were received and vouchered for later payment. (Select Elimination in the drop down [Description] menu in the Detail Journal):

Actual Estimated

General Government $ 395,940 $ 394,060

Public Safety 1,086,650 1,088,600

Public Works 962,300 967,620

Health and Welfare 661,200 663,600

Culture and Recreation 613,750 617,000

Miscellaneous 98,000 98,000

Totals $3,817,840 $3,828,880

11. [Para. 4a-11] The General Fund paid vouchers during the year in the amount of $3,210,000 as well as its liabilities for employees federal and state income taxes withheld and payroll taxes.
12. [Para. 4a-12] The General Fund transferred $50,000 to the debt service fund so the debt service fund could make a bond interest payment.
13. [Para. 4a-13] Tax anticipation notes issued by the General Fund were paid at maturity at the face amount plus interest of $10,000.
14. [Para. 4a-14] The General Fund recorded liabilities of $50,000 to other funds for services received from the Water Utility Fund during the year. Of this amount, $39,000 should be charged to Public Safety and $11,000 to General Government.