CITY OF MONROE General Fund Balance Sheet As of December 31, 2014 Assets Cash $502,000 Taxes receivable $210,000 Less: Estimated uncollectible taxes (42,000) net 168,000 Interest and penalties receivable on taxes 5,200 Less: Estimated uncollectible interest and penalties (950) net 4,250 Due from state government 210,000 Total assets $884,250 Liabilities, Deferred Inflows, and Fund Equity Liabilities: Accounts payable $ 99,000 Due to other funds 27,000 Total liabilities 126,000 Deferred inflows Property taxes 21,000 Fund equity: Fund balanceassigned (for outstanding encumbrances) $17,000 Fund balanceunassigned 720,250 Total fund balance 737,250 Total liabilities, deferred inflows and fund equity $884,250 CITY OF MONROE Street and Highway Fund Balance Sheet As of December 31, 2014 Assets Cash $21,000 Investments 59,000 Due from state government 109,000 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 3C. This portion of the continuous problem continues the General Fund and special revenue fund examples by requiring the recording and posting of the budgetary entries. To reduce clerical effort required for the solution use control accounts for the budgetary accounts, revenues, expenditures and encumbrances. Subsidiary accounts are not required. Budget information for the City includes: a) As of January 1, 2015, the City Council approved and the mayor signed a budget calling for $11,250,000 in property tax and other revenue, $9,300,000 in appropriations for expenditures, and $1,700,000 to be transferred to two debt service funds for the payment of principal and interest. Record the budget for the General Fund and post to the ledger. b) Also as of January 1, 2015, the City Council approved and the mayor signed a budget for the Street and Highway Fund that provided for estimated revenues from the state government in the amount of $1,068,000 and appropriations of $1,047,000. Record the budget and post to the ledger. 4C. Part 1. General Fund Transactions Required: a. Record journal entries for the following transactions for FY 2015. Make any computations to the nearest dollar. Journal entry explanations are not required. Use control accounts for revenues, expenditures and budgetary accounts. It is not necessary to reflect subsidiary ledger entries. (1) Encumbrances of $ 17,000 for purchase orders outstanding at the end of 2014 were re-established. (2) The January 1, 2015, balance in Deferred Inflows Property Taxes relates to the amount of the 2014 levy that was expected to be collected more than 60 days after December 31. This amount should be recognized as 2015 revenues. (3) A general tax levy in the amount of $6,800,000 was made. It is estimated that 2 percent of the tax will be uncollectible. (4) Tax anticipation notes in the amount of $500,000 were issued. (5) Goods and supplies related to all encumbrances outstanding as of December 31, 2014 were received, along with invoices amounting to $16,600; the invoices were approved for payment. The City maintains immaterial amounts in supply inventories and it is the practice of the City to charge supplies to expenditure when received. (6) All accounts payable and the amount due other funds were paid. (7) The General Fund collected the following ($ 10,811,500) in cash: o prior year taxes, $158,000; o interest and penalties receivable on prior year taxes, $3,500; o current taxes, $6,400,000; o $210,000 previously recorded as due from the state government; o licenses and permits, $800,000; o sales taxes, $2,890,000; and o miscellaneous revenues, $350,000. (8) Purchase orders and contracts were issued in the amount of $3,465,000. (9) Payrolls for the General Fund totaled $5,070,000. Of that amount, $498,000 were withheld for employees federal income taxes and $357,000 were withheld for employees FICA and Medicare tax liability; the balance was paid in cash. The encumbrance system is not used for payrolls. (10) The liability for the citys share of FICA and Medicare taxes, $357,000, was recorded as was the liability for state unemployment taxes in the amount of $28,000. (11) Invoices for most of the supplies and services ordered in transaction 8 were received in the amount of $3,375,300 and approved for payment. The related encumbrance amounted to $3,407,000. (12) Tax anticipation notes were paid at maturity, along with interest in the amount of $18,000. (13) Notification was received that an unrestricted state grant in the amount of $332,000 would be received during the first month of the next year. (14) The General Fund recorded a liability to the Water and Sewer Fund for services in the amount of $37,000 and to the Stores and Services Fund for supplies in the amount of $313,200; $310,000 of the amount due the Stores and Services Fund was paid. (15) The General Fund recorded an amount due of $52,000 from the state government, representing sales taxes to be collected from retail sales taking place during the last week of the year. (16) The General Fund paid accounts payable in the amount of $3,015,000 and paid the amounts due the federal and state governments. The General Fund also transferred to the debt service funds cash in the amount of $1,662,000 for the recurring payment of principal and interest. (17) All required legal steps were accomplished to increase appropriations by the net amount of $212,000. Estimated revenues were increased by $73,000. (18) The City Council authorized a write-off of $51,000 in delinquent property taxes and corresponding interest and penalties amounting to $1,600. (19) Interest and penalties receivable on taxes were accrued in the amount of $17,200; $1,100 of this amount is expected to be uncollectible. (20) It is estimated that $27,500 of the outstanding taxes receivable will be collected more than 60 days beyond the fiscal year-end. b. Post the entries to the general ledger. c. Prepare and post the closing entries for the General Fund. Outstanding encumbrances at year end are classified as Assigned Fund Balance and all remaining net resources are classified as Unassigned Fund Balance. d. Prepare a Statement of Revenues, Expenditures, and Changes in Fund Balance for the year ended December 31, 2015. Confirm that the revenue and expenditure control accounts agree with the following detail and use this information in the Statement: Revenues Expenditures Property Taxes . . . . . . $6,657,500 General Government . . . $1,646,900 Sales Taxes 2,942,000 Public Safety . . . . . . . . . 3,026,900 Interest and Penalties on Taxes . . . . . . . . . . . 16,100 Highways and Streets . . 1,441,400 Licenses and Permits . 800,000 Sanitation . . . . . . . . . . . . 591,400 Intergovernmental Revenue . . . . . . . . . . . 332,000 Health . . . . . . . . . . . . . . 724,100 Miscellaneous Revenue 350,000 Welfare . . . . . . . . . . . . . 374,300 Total . . . . . . . . . . . . $11,097,600 Culture and Recreation . 917,300 Capital Outlay . . . . . . . . 492,800 Total . . . . . . . . . . . . . $9,215,100 e. Prepare in good form a Balance Sheet for the General Fund as of the end of fiscal year, December 31, 2015. 4C. Part 2. Special Revenue Fund Transactions Required: a. Record journal entries for the following transactions for FY 2015 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 $1,072,000 will be available for street and highway maintenance during 2015 (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 $985,000 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 $1,043,000. Invoices amounting to $1,030,500 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. c. Prepare a Statement of Revenues, Expenditures, and Changes in Fund Balances for the Street and Highway Fund for the fiscal year ended December 31, 2015. d. Prepare a Balance Sheet for the Street and Highway Fund as of December 31, 2015. Assume any unexpended net resources are classified as Restricted Fund Balance.