City of Monroe

The Balance Sheets of the General Fund and the Street and Highway Fund of the Coty of Monroe as of December 31, 2014, follow. These (beginning) balances have been entered in the proper general ledger accounts as of 1/1/2015

As of December 31, 2014
Assets
Cash		502,000
Taxes Receivable	210,000
Less: Estimated uncollectable taxes	(42,000)
Net		168,000
Interest and Penalties receivable on taxes	5,200
Less: Estimated uncollectable interest and penalties	(950)
Net		4,250
Due from 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 Balance assigned
(for outstanding circumstances)	17,000
Fund Balance (unassigned)	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 Decemeber 31, 2014 Assets
Cash		21,000
Investments		59,000
Due from State Government		109,000
Total Assets		189,000
Liabilities and Fund Equity
Liabilites
Accounts Payable		9,000
Fund Equity
Fund Balance assigned for streets and highway		180,000
Total Liabilities and Fund Equity		189,000

3-C 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 and 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.

4-C 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 necessary to reflect subsidiary ledger entries.

Encumbrances of $17,000 for purchase orders outstanding at the end of 2014 were re-established

The January 1, 2015 balance is 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

A general tax levy in the amount of $6,800,000 was made.It is estimated that 2 percent of the tax will be uncollectable

Tax anticipation notes in the amount of $500,000 were issued

Good 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 payments.The City maintains immaterial amounts in supplyinventories and it is the practice of the City to charge supplies to expenditure when received

All accounts payable and the amount due other funds were paid

The General Fund collected the following ($10,811,500) in cash

Prior year taxes $158,000

Interest and penalties receivable on prior year taxes $3,500

Current taxes $6,400,000

$210,000 previously recorded as due from the state government

Licenses and permits $800,000

Sales taxes $2,890,000 and

Miscellaneous revenues $350,000

Purchase orders and contracts were issued in the amount of $3,465,000

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 emcumbrance system is not used for payrolls

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

Invoices for most of the supplied 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

Tax anticipation notes were paid at maturity along with interest in the amount of $18,000

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

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

The General Fund recorded an aount due of $52,000 from the state government, representing sales taxes to be collected from retail sales taking place during the week of the year

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

All required legal steps were accomplished to increase appropriations by the net amount of $212,000.Estimated revenues were increased by $73,000

The City Council authorized a write-off of $51,000 in delinquent property taxes and corresponding interest and penalties amounting to $1,600

Interest and penalties receivable on taxes were accrued in the amount of $17,200; $1,100 of this amount is expected to be uncollectable

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 Change 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 & Penalites on Taxes----------16,100 Highways and Streets---------$1,441,400

Licenses and Permits -----------------800,000 Sanitation----------------------------591,000

Intergovernment Revenue----------332,000 Health--------------------------------724,100

Miscellaneous Revenue Tax---------350,000 Welfare------------------------------374,300

TOTAL-------------------------------$11,097,600 Culture and Recreation--------- 917,000

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 the fiscal year December 31, 2015

4-C Part 2 Special Revenue Fund Transactions

Required:

A) Record journal entries for the following tranactions for FY 2015 and post to the general ledger. As there are relatively few revenues and expenditures the use of the control accounts is not necessary. (Make entries directly to individual revenue and expenditure accounts).

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 requirement).The funds are NOT considered reimbursement-type as defined by GASB standards.

Cash in the total amount of $985,000 was received from the state government

Contracts all eligible for payment from the Street and Highway Fund, were signed in the amount of $1,062,000

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.

Investment revenue of $5,120 was earned and received

Accounts payable were paid in the amount of 923,000

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 Balance 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 new resources are classified as restricted fund balance