CITY OF SMITHVILLE

General Fund Post-closing Trial Balance

As of December 31, 2019

Account TitleDebitsCredits

Cash$376,290

Taxes ReceivableDelinquent391,756

Allowance for Uncollectible Delinquent Taxes$ 11,752

Interest and Penalties Receivable on Taxes40,126

Allowance for Uncollectible Interest and Penalties3,611

Due from State Government165,000

Vouchers Payable269,491

Due to Federal Government135,720

Due to State Government32,600

Deferred Inflows of Resources97,704

Fund BalanceCommittedPublic Works29,700

Fund BalanceAssignedCulture and Recreation56,800

Fund BalanceUnassigned335,794

Totals$973,172$973,172

Unpost capability.As mentioned in the "User Guide" file, the City of Smithville software program permits students to "unpost" a particular batch of posted transactions.Unposted entries then can be edited and re-posted.In addition, any omitted entries can be inserted above a selected journal line in any unposted batch of entries. Prior to unposting a batch all batches must be posted.

Select [Reports>Trial Balances>Post-Closing Trial Balance] and print or save as a PDF file the post-closing trial balance for year 2019.Retain the printed trial balance in your personal cumulative folder until the due date assigned by your instructor for the project, or submit a saved version of the trial balance electronically if directed to do so by your instructor.

c. Select [Governmental Activities, Government-wide Level] in the "Current accounting entity" drop-down field and the [Accounts] tab.You will see most of the accounts included in the preceding trial balance, plus many other accounts that will be used in the various chapters of the City of Smithville project.

d. Select the [Journal] tab and create a journal entry to enter the statement of net position (i.e., balance sheet) accounts and amounts shown in the following trial balance.It is necessary to enter these items in the accounts of the governmental activities category at the government-wide level as the general journal and general ledger for governmental activities comprise a separate "set of books" from those for the General Fund.Be sure to enter 2019 from the dropdown menu in the [Year] column and enter 2-d in the [Add description] field of the [Description] column.Select each account individually and insert the appropriate debit or credit amount for each account.When you have completed entering the initial data, verify the accuracy and click [Post entries] to post the entry to the governmental activities, government-wide general ledger

CITY OF SMITHVILLE

Governmental Activities Government-wide Level

Post-closing Trial Balance

As of December 31, 2019

Account TitleDebitsCredits

Cash$376,290

Taxes ReceivableDelinquent391,756

Allowance for Uncollectible Delinquent Taxes$11,752

Interest and Penalties Receivable on Taxes40,126

Allowance for Uncollectible Interest and Penalties3,611

Due from State Government165,000

Land4,180,000

Infrastructure9,862,000

Accumulated DepreciationInfrastructure2,713,944

Buildings6,296,000

Accumulated DepreciationBuildings1,731,000

Equipment3,556,800

Accumulated DepreciationEquipment1,765,480

Vouchers Payable269,491

Due to Federal Government135,720

Due to State Government32,600

Net PositionNet Investment in Capital Assets 17,684,376

Net PositionUnrestricted 519,998

Totals$24,867,972$24,867,972

e.Select [Reports>Trial Balances>Post-Closing Trial Balance] and print the post-closing trial balance for 2019, or submit a saved PDF version of the trial balance electronically if directed to do so by your instructor. Retain in your cumulative file until the due date for your project or the time specified by your instructor.

Before closing the City of Smithville 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 Chromebook.

Chapter 3 Recording the Annual Budget

The following budget for the General Fund of the City of Smithville was legally adopted for the fiscal year ending December 31, 2020.

Estimated Revenues:

TaxesReal Property$1,841,126

Interest and Penalties on Taxes 37,000

Licenses and Permits500,000

Fines and Forfeits210,000

Intergovernmental Revenue789,000

Charges for Services624,720

Total Estimated Revenues$4,001,846

Appropriations:

General Government$799,500

Public Safety1,926,000

Public Works724,000

Culture and Recreation 560,500

Total Appropriations$4,010,000

Required

a. After opening the file you created for Chapter 2 of this project, record the budget in the general journal, providing entries in the Detail Journal when directed. Begin by selecting [General Fund] in the "Current Accounting Entity" dropdown menu and the [Journal] tab.In the [Year] field, be sure to select the year 2020.Enter 3-a in the [Add description] field.Select Estimated Revenues in the drop down [Account] window. Click [Add subsidiary] to go to the Detail Journal where you will enter the detail for each estimated revenue source.In the Detail Journal, select "Budget Authorization" from the drop-down menu for [Description].

When you have finished entering the estimated revenue detail information, verify that the correct balance is shown in the Detail Journal, then click on [Add entry and return to Journal] and the total estimated revenues will be entered in the general journal Estimated Revenues control account.Follow the same procedure to record the budget detail for Appropriations. Complete the general journal entry by debiting or crediting Budgetary Fund Balance as appropriate to make the journal entry balance.Note that budgetary entries have no effect on governmental activities at the government-wide level and thus the budget information is only recorded in the General Fund.

When you are satisfied you have made the entry correctly, post it to the general ledger by clicking [Post entries].Before posting, or after unposting as described previously, you can edit, delete or insert entries in the journal by placing the cursor in the line you want to adjust and then right-clicking. Note that the "Insert Entry" function will work if you are inserting an entry prior to a balance sheet account. However, it will not work when inserting an entry prior to any account that has an associated subsidiary ledger (e.g., estimated revenues, expenditures).

b. Go to [Reports], print the pre-closing subsidiary ledgers and pre-closing General Fund trial balance for year 2020 and retain them in your cumulative file until directed by your instructor to submit them, or save and submit these documents electronically if directed to do so by your instructor. (As of this time, only the budget has been recorded.) This is your last opportunity to print or export these documents with budgetary information only.After operating transactions have been journalized and posted in Chapter 4, subsidiary ledgers and trial balances will contain both budgetary and operating accounts and balances.

Before closing the City of Smithville 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 Chromebook.

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 Smithville that occurred during fiscal year 2020, the year for which the budget given in Chapter 3 was recorded.Read all instructions carefully.

a. 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 highly 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.

For each entry affecting budgetary accounts or operating statement accounts, you will be directed to the Detail Journal to record the appropriate amounts in the detail budgetary or actual accounts as was the case in Chapter 3.

1.[Para. 4-a-1] On January 2, 2020, real property taxes were levied for the year in the amount of $1,878,700.It was estimated that 2 percent of the levy would be uncollectible.

Required: Record this transaction in both the General Fund and governmental activities journal. (Note: Type 4-a-1 as the paragraph number in the [Add description] field for this entry; 4-a-2 for the next transaction, etc. Careful referencing by paragraph number is very helpful should you need to determine where you may have omitted a required journal entry or may have made an error.) For the General Fund only you will be directed to the Detail Journal where you will select "Accrued Revenue" in the drop down [Description] menu when recording property tax revenue.

2.[Para. 4-a-2] Encumbrances were recorded in the following amounts for purchase orders issued against the appropriations indicated:

General Government$135,673

Public Safety386,652

Public Works180,804

Culture and Recreation 126,599

Total$829,728

Required:Record the encumbrances in the General Fund general journal and Detail Journal as appropriate.In the Detail Journal, select "Purchase orders" from the drop down [Description] menu.

3.[Para. 4-a-3] Cash was received during the year in the total amount of $4,028,058 for collections from the following receivables and cash revenues, as indicated:

Current Property Taxes$1,488,206

Delinquent Property Taxes387,201

Interest and Penalties Receivable on Taxes34,270

Due from State Government165,000

Revenues: (total: $1,953,381)

Licenses and Permits477,960

Fines and Forfeits211,106

Intergovernmental639,000

Charges for Services 625,315

Total$4,028,058

Required:Record the receipt of cash and the related credits to receivables and revenues accounts, as applicable, in both the General Fund and governmental activities journals.(Select "Received in cash" in the drop down [Description] menu in the Detail Journal related to the General Fund revenue entries.)

For purposes of the governmental activities entries at the government-wide level assume the following revenue classifications:

General FundGovernmental Activities

Licenses and PermitsProgram RevenuesGeneral Government

Charges for Services

Fines and ForfeitsProgram RevenuesGeneral Government

Charges for Services

IntergovernmentalProgram RevenuesPublic SafetyOperating

Grants and Contributions

Charges for ServicesProgram RevenuesGeneral Government

Charges for Services, $343,924

Program RevenuesCulture and Recreation

Charges for Services, $281,391

4.[Para. 4-a-4] Of the $387,201 in delinquent property taxes collected in transaction 4-a-3 $76,994 had been recorded in the Deferred Inflows of Resources account. Additionally, $7,840 of the interest and penalties collected in 4-a-3 had also been recorded as deferred inflows of resources.

Required:In the General Fund recognize the property tax revenues and the interest and penalties revenues related to the deferred inflows of resources. To do this debit the Deferred Inflows of Resources account and credit related property tax revenues and interest and penalties revenues. Select "Previous Deferral" in the [Description] menu in the Detail Journal. Under accrual accounting the deferral was not recognized in the governmental activities journal; therefore, there is no need to record a journal entry in the governmental activities journal.

5.[Para. 4-a-5] General Fund payrolls for the year totaled $3,179,547. Of that amount, $667,705 was withheld for employees' federal income taxes; $453,291 for federal payroll taxes; $238,466 for retirement funds administered by the state government; and the remaining $1,820,085 was paid to employees in cash. The City of Smithville does not record encumbrances for payrolls. The payrolls were chargeable against the following functions:

General Government$663,678

Public Safety 1,539,302

Public Works542,765

Culture and Recreation 433,802

Total$3,179,547

Required:Make summary journal entries for payroll in both the General Fund and governmental activities general journals for the year.

6.[Para. 4-a-6] Invoices for some of the goods recorded as encumbrances in transaction 4-a-2 were received and vouchered for payment, as listed below. Related encumbrances were canceled in the amounts listed below (Select "Elimination" in the drop down [Description] menu in the Detail Journal):

ExpendituresEncumbrances

General Government$130,606$130,572

Public Safety366,088366,154

Public Works141,981141,972

Culture and Recreation126,000 125,965

Total$764,675$764,663

Required:Record the receipt of these goods and the related vouchers payable in both the General Fund and governmental activities journals.In the Detail Journal select "Good received" for the expenditures description. At the government-wide level, you should assume the city uses the periodic inventory method.Thus, the invoiced amounts above should be recorded as expenses of the appropriate functions, except that $32,340 of the amount charged to the Public Works function was for a vehicle (debit Equipment for this item at the government-wide level).

7.[Para. 4-a-7] During FY 2020, the City of Smithville received notification that the state government would send $150,000 at the beginning of the next fiscal year.Based on the city's definition of "available for use," the city considers the funds available for General Government's use in the current reporting period.The budget for the current year included this amount as "Intergovernmental Revenue."

Required:Record this transaction as a receivable and revenue in the General Fund and governmental activities journals.(Note: Select "Accrued Revenue" in the [Description] menuin the Detail Journal).At the government-wide level, assume that this item is an operating grant to the Culture and Recreation function.

8.[Para. 4-a-8] Checks were written in the total amount of $2,096,571 during 2020.These checks were in payment of the following items:

Vouchers Payable$ 700,000

Due to Federal Government1,131,506

Due to State Government265,065

Total amount paid$2,096,571

Required:Record the payment of these items in both the General Fund and governmental activities general journals.

9.[Para. 4-a-9] Current taxes receivable uncollected at year-end, and the related Allowance for Uncollectible Current Taxes account, were both reclassified as delinquent. Of the amount classified as delinquent it was determined $87,010 would not be collected within 60 days of the fiscal year end and would therefore be unavailable for use in the current period.As a result, this amount was reclassified as deferred inflows of resources.

Required:Record the reclassification of the current taxes receivable and related allowance for uncollectible account in the General Fund and governmental activities journals.

Reclassify $87,010 of property tax revenue to the Deferred Inflows of Resources account in the General Fund journal only. (Note: To accomplish the reclassification of revenue, debit the revenue account and credit deferred inflows of resources. Select "Deferral" in the [Description] menu in the Detail Journal.)

10. [Para. 4-a-10] Interest and penalties receivable on delinquent taxes was increased by $40,500; $3,248 of this was estimated as uncollectible and $8,910 was considered unavailable for use in the current fiscal year.

Required:Record this transaction in the General Fund and governmental activities journals as a revenue transaction. The $8,910 classified as unavailable for use is recorded as deferred inflows of resources in the General Fund journal and as revenue in the governmental activities journal.

Post all journal entries to the ledgers: After reviewing all entries for accuracy, including year and paragraph numbers, post all entries to the general ledger accounts and to all subsidiary ledger accounts, by clicking on [Post entries].Also post all entries in the governmental activities journal.

11.Closing Entry. Following the instructions in the next paragraph, prepare and post the necessary entries to close the General Fund Estimated Revenues and Appropriations accounts to Budgetary Fund Balance, and Revenues and Expenditures to Fund BalanceUnassigned.Because the City of Smithville honors all outstanding encumbrances at year-end, it is not necessary to close Encumbrances to Encumbrances Outstanding at year-end since encumbrances do not affect the General Fund balance sheet or statement of revenues, expenditures, and changes in fund balances.If, however, you would like to avoid having these accounts appear in the post-closing trial balance, you can opt to close Encumbrances to Encumbrances Outstanding.If the accounts are closed, they would need to be reestablished at the beginning of the next year.

To close the temporary accounts, you must click the box for [Closing Entry] that appears when you [Add new entry]. "Closing Entry" will appear in the [Add credit] field. Be sure the check mark in the box for [Closing Entry] is showing before closing each individual account.Also, you will be sent to the Detail Journal where you must close each individual budgetary or operating statement account.To determine the closing amounts for both General Ledger and subsidiary ledger accounts, you will need to print the pre-closing version of these ledgers for year 2020 from the [Reports] menu.

At year-end, an analysis by the city's finance department determined the following constraints on fund balances in the General Fund.Prepare the appropriate closing/reclassification journal entry in the General Fund to reclassify amounts between Fund BalanceUnassigned and the fund balance accounts corresponding to the constraints shown below.(Note: You should consider the beginning of year balances in fund balance accounts in calculating the amounts to be reclassified. Be sure the check mark in the box for [Closing Entry] is showing before closing each individual account.)

AccountEnding Balance

Fund BalanceRestrictedGeneral Government$36,000

Fund BalanceCommittedPublic Works12,700

Fund BalanceAssignedCulture and Recreation0

Note: DO NOT PREPARE CLOSING ENTRIES FOR GOVERNMENTAL ACTIVITIES AT THIS TIME since governmental activities will not be closed until Chapter 9, after the capital projects fund (Chapter 5) and debt service fund (Chapter 6) transactions affecting governmental activities at the government-wide level have been recorded.

b.Select [Export] from the drop down [File] menu to create an Excel worksheet of the General Fund post-closing trial balance as of December 31, 2020.Use Excel to prepare in good form a balance sheet for the General Fund as of December 31, 2020.Follow the format shown in Illustration 4-4 of Reck, Lowensohn, and Neely, Accounting for Governmental & Nonprofit Entities, 18th edition textbook (hereafter referred to as "the textbook.")

c.Select [Export] from the drop down [File] menu to create an Excel worksheet of the General Fund pre-closing subsidiary ledger account balances for the year 2020.Use Excel to prepare in good form a statement of revenues, expenditures, and changes in fund balance for the General Fund for the year ended December 31, 2020. (See Illustration 4-5 in the textbook for an example format.)

d.Use the Excel worksheet of the General Fund pre-closing subsidiary ledger account balances created in part c above to prepare in good form a schedule of revenues, expenditures, and changes in fund balancebudget and actual for the General Fund for the year ended December 31, 2020. (See Illustration 4-6 in the textbook for an example format.)

e.Prepare a reconciliation of total expenditures reported in your solution to part c of this problem with the total expenditures and encumbrances reported in your solution to part d of this problem. (In Chapter 4 below Illustration 4-5, see discussion and example which compares Illustrations 4-5 and 4-6.)

[Note: File the printouts of all your worksheets and your completed financial statements in your cumulative problem folder until directed by your instructor to submit them, unless your instructor specifies submission of files electronically.]

Before closing the City of Smithville 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 Chromebook.

Chapter 5 Recording Capital Asset Transactions

Street Improvement Capital Projects Fund and Governmental Activities at the Government-wide Level

During late 2019, the voters of the City of Smithville authorized tax-supported bond issues totaling $8,000,000 as partial financing for projects to construct the extension of streets and the related curbs, culverts, and storm sewers in the city. The estimated total cost of the projects, which are expected to extend over the next three years, was $11,200,000. In addition to the bond financing, voters also approved a special 1 cent sales tax to assist in financing the projects.The sales tax begins January 1, 2020 and will continue for seven years.The sales tax is projected to generate $550,000 each year.

Required

a. Prepare general journal entries as necessary to record the transactions described below in the Street Improvement Fund general journal and, if applicable, in the governmental activities general journal. Do not record entries at this time in other affected funds; those entries will be made in the later chapters of this cumulative problem that cover the affected funds. Use account titles listed under the drop down [Account] menu.Be sure the year 2020 is selected from the drop-down [Year] menu and the appropriate paragraph number shown in bold-face font below is in the [Description] field.

1.[Para. 5-a-1] In early 2020, design plans and specifications for the first project, the Elm Street Project, were submitted by a construction engineering firm. The firm billed the Street Improvement Fund for $150,000.

Required:Record this billing and the related Vouchers Payable liability in the Street Improvement Fund and governmental activities journals. (Note: this transaction was not encumbered.)

2.[Para. 5-a-2] On March 15, 2020, construction bids were opened and analyzed. A bid of $2,400,000 was accepted, and the contract was awarded for the Elm Street Project. The contract provided for a retained percentage of 5 percent from each progress payment, and from the final payment, until final inspection and acceptance by the city's public works inspectors.

Required:Record the signing of the contract in the Street Improvement Fund general journal.This transaction has no effect at the government-wide level.

3.[Para. 5-a-3] On April 1, 2020, 2.5% deferred serial bonds with a face value of $2,000,000 were sold for a total amount of $2,032,500, of which $12,500 was for accrued interest from the January 1, 2020 date of the bonds and $20,000 was a premium on the bonds sold.Cash in the amount of the accrued interest and premium was deposited directly in the Street Improvement Bond Debt Service Fund. Cash in the amount of $2,000,000 was deposited and recorded in the Street Improvement Fund.

Required:Record this transaction in the Street Improvement Fund and governmental activities journals. (Hint: In addition to recording the liability for bonds payable in the governmental activities journal, you should record the premium on the bonds payable [credit Premium on Deferred Serial Bonds Payable] and accrued interest on bonds sold [we recommend that you credit ExpensesInterest on Long-term Debt] in the governmental activities general journal for the $12,500 of accrued interest.)For now you should not make the entry in the Street Improvement Bond Debt Service Fund to record the accrued interest and premium. That entry will be made in Chapter 6 of this cumulative problem.

4.[Para. 5-a-4] Vouchers payable (see Transaction 1) were paid on April 20, 2020.

Required:Record this transaction in both the Street Improvement Fund and governmental activities general journals.

5.[Para. 5-a-5] In July 2020, the contractor for the Elm Street Project reported that the project was one-half completed and requested a progress payment of $1,200,000.

Required: Record the liability for the progress billing in both the Street Improvement Fund and governmental activities general journals.

6.[Para. 5-a-6] The billing for the partially completed Elm Street Project (see Transaction 5) was paid in late July, less the contractual retention of 5 percent.

Required:Record this transaction in both the Street Improvement Fund and governmental activities general journals.

7.[Para. 5-a-7] On December 10, 2020 the Elm Street Project was completed and the contractor for the project requested a final payment of $1,200,000. This amount was recorded as a liability.

Required: Record the liability for the final billing in both the Street Improvement Fund and governmental activities journals.

8.[Para. 5-a-8] During the year sales taxes were collected in the amount of $560,000.

Required:Make the summary journal entries in both the Street Improvement Fund and governmental activities journals to record the collection of sales taxes.

9.[Para. 5-a-9] Payment was made for the final billing on the Elm Street Project, less the retained percentage, on December 1, 2020.

Required:Record this transaction in both the Street Improvement Fund and governmental activities journals.

10.[Para. 5-a-10] Upon final inspection of the Elm Street Project, the city inspector determined that all work conformed to specifications.Retained percentages (Transactions 6 and 7) were paid to the contractor.

Required:Record this transaction in both the Street Improvement Fund and governmental activities journals.Total construction expenditures for the Elm Street Project should be capitalized in the Infrastructure account in governmental activities.

11.Verify the accuracy of all your preceding entries in the Street Improvement Fund and governmental activities general journals, then click [Post entries] of each entity to post the entries to the respective general ledgers.For the Street Improvement Fund only, prepare year-end closing entries for 2020 and post them to the fund's general ledger.Accounts should be closed to Fund BalanceRestricted. (Note: You must click on the box for [Closing Entry] to check mark it; "Closing Entry" will appear in the [Add description] field for the account being closed. Be sure the check mark is present for each account being closed.)Click [Post entries] to post the closing entry.Cash remaining in the Street Improvement Fund at year-end is not transferred to the debt service fund since other street improvement projects will be undertaken during the next two years.Closing entries will be made in the governmental activities general journal in Chapter 9 of this cumulative problem.Ignore those entries for now.

c. Export the post-closing trial balance for year 2020 to an Excel worksheet and use Excel to prepare a balance sheet for the Street Improvement Fund as of December 31, 2020.(See Illustration 4-4 in the textbook for an example of an appropriate format of a governmental fund balance sheet.) In addition, save and print the post-closing trial balance from the [Reports] drop-down menu.

d. Export the pre-closing trial balance for year 2020 to an Excel worksheet and use Excel to prepare a statement of revenues, expenditures, and changes in fund balance for the Street Improvement Fund for the year ended December 31, 2020.(See Illustration 5-3 in textbook for an example of the format of a capital projects fund statement of revenues, expenditures and changes in fund balance.) Save and print the pre-closing trial balance from the [Reports] drop-down menu.

[Note: Retain all required printouts and your financial statements in your cumulative folder until directed by your instructor to submit them, unless your instructor prefers to have computer files submitted electronically, in which case you will need to save a .pdf version of your trial balance.]

Before closing the City of Smithville 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 Chromebook.

Chapter 6 Transactions Affecting General Long-term Liabilities and Debt Services

The City of Smithville created a Street Improvement Bond Debt Service Fund to be used to retire the bonds issued for the purposes described in Chapter 5 of this cumulative problem, and to pay the interest on the bonds. The $2,000,000 face value of bonds issued during 2020 are dated January 1, 2020, but were not issued until April 1, 2020.Because bondholders will receive six months of interest on July 1, 2020 in the total amount of $25,000, they were required to pay $12,500 on the date of issue to pay the city for unearned interest from January 1 to April 1.The bonds bear interest of 2.5 percent per annum. The first interest payment of $25,000 is due July 1, 2020.Subsequent semiannual interest payments will be made January 1 and July 1 of each following year until the maturity of the bond.Bonds in the amount of $500,000 are to mature five years after the date of the bonds (January 1, 2025), and $100,000 is to mature January 1 of each year thereafter until all the bonds have been retired.Thus, these bonds are deferred serial bonds as discussed in Chapter 6 of the textbook.Make entries as instructed in the following paragraphs.

Bond covenants related to this bond issue require the city to levy property taxes sufficient to make principal and interest payments until the bonds have been retired.The city council has approved a resolution to enable the property tax levy, beginning in fiscal year 2021.As the bond issue did not occur until April 2020, the city will not levy debt service property taxes until next year.

a. Prepare general journal entries, as necessary to record the transactions described below in the Street Improvement Bond Debt Service Fund general journal and, if applicable, in the governmental activities general journal. Use account titles listed under the drop down [Account] menu.Be sure the year 2020 is selected from the drop-down [Year] menu and the appropriate paragraph number shown in bold-face font below is in the [Add description] field.

1. [Para. 6-a-1] In early April 2020, an amendment to the annual budget for 2020 was approved by the city council for inflows and outflows in the Street Improvement Bond Debt Service Fund related to the bond issue.The debt service fund budget amendment provides for estimated other financing sources of $20,000 for the premium on bonds sold and estimated revenues of $12,500 for accrued interest on bonds sold; and appropriations in the amount of the one interest payment of $25,000 to be made during 2020. (The payment that is due on July 1, 2020.)

Required:Record the amended budget for the Street Improvement Bond Debt Service Fund for year 2020.Budgetary entries have no effect on the government-wide accounting records.

1. [Para. 6-a-2] On April 1, 2020, the premium and accrued interest on bonds sold were received by the Street Improvement Bond Debt Service Fund. (See Transaction 5-a-3 in the Street Improvement Fund.)

Required: Record this transaction in the Street Improvement Debt Service Fund.No entry is required at this time in the governmental activities general journal since the bond issue, together with related premium and accrued interest, was recorded in the governmental activities general journal in transaction 5-a-3.

1. [Para. 6-a-3] The July 1, 2020 interest payment was made in the amount of $25,000. (Note: Since you credited ExpenseInterest on Long-Term Debt for $12,500 in 5-a-3 in the governmental activities general journal you can record the full July 1, 2020, interest payment as a debit to Interest Expense, less amortization of the premium.)

Required: Record this transaction in both the Street Improvement Debt Service Fund and the governmental activities general journals.For the entry in the governmental activities journal, assume that the appropriate amount of amortization of the Premium on Deferred Serial Bonds Payable for the period the bonds have been outstanding (April 1 to July 1) is $439.(Note: Although premiums and discounts on bonds issued are not amortized in a debt service fund, they should be amortized at the government-wide level since the accrual basis of accounting is used at that level.)

1. [Para. 6-a-4] Make the required journal entry in the governmental activities general journal to accrue six months of interest payable on the 2.5% deferred serial bonds from the July 1 interest payment until the end of the fiscal year, December 31, 2020.For this entry, assume that the appropriate amount of amortization of the Premium on Deferred Serial Bonds Payable is $875.(Recall that interest is not accrued for the period July 1 to December 31, 2020 in the debt service fund as no appropriation exists for this expenditure and the interest is not due this fiscal year.)

5. Verify the accuracy of journal entries, including dates and paragraph numbers, and, if you have not already done so, post all entries to the general ledger of both the Street Improvement Bond Debt Service Fund and governmental activities by clicking on [Post entries].Make the entries needed to close the budgetary and operating statement accounts at the end of fiscal year 2020.Budgetary and operating statement accounts should be closed to Budgetary Fund Balance and Fund BalanceRestricted, as appropriate. Be sure that for each account being closed that the check mark for [Closing Entry] is on and that "Closing Entry" appears in the [Add credit] field.(Note: Closing entries for governmental activities at the government-wide level will be made in Chapter 9 of this cumulative problem.)

b. Go to [File>Export] and export Excel files of the pre-closing and post-closing trial balances for the Street Improvement Bond Debt Service Fund as of December 31, 2020, and use them to prepare a balance sheet; statement of revenues, expenditures, and changes in fund balances; schedule of revenues, expenditures, and changes in fund balancesbudget and actual for the Street Improvement Bond Debt Service Fund. The format for the statements will be similar to that of the combing statements in illustrations 6-8, 6-9, and 6-10.

[Note: Retain all required printouts in your cumulative folder until directed by your instructor to submit them, unless your instructor specifies submission of computer files electronically, in which case you will need to save a .pdf version of you trial balances.]

Before closing the City of Smithville 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 Chromebook.

c. Assuming that the assessed valuation of property within the City of Smithville is $323,913,790 and the legal general obligation debt limit is 8 percent of assessed valuation, prepare a schedule in good form showing calculation of the legal debt limit, debt subject to the limit, and debt margin at the end of 2020 (see Illustration 6-3 for an example). A note at the bottom of the schedule should disclose the bonds authorized but unissued, as described in the introductory paragraph of Chapter 5 of the City of Smithville cumulative problem.This will inform the reader that additional debt issuances are pending.

Chapter 9 Adjusting and Closing Entries for Governmental Activities, Government-wide Level; Preparation of Government-wide and Major Fund Financial Statements

a.Prior to preparing financial statements at the end of FY 2020, it is necessary to record depreciation expense for the year for governmental activities at the government-wide level.

Based on general capital assets assigned to specific functions, depreciation expense related to equipment and infrastructure is allocated to functions as shown below:

EquipmentInfrastructureBuildings

General Government$54,920$45,336

Public Safety187,84066,115

Public Works125,596$98,62049,114

Culture and Recreation72,244 28,335

Totals$440,600$98,620$188,900

Required: [Para. 9-a] Record depreciation expense for the year 2020 in the governmental activities general journal at the government-wide level. Verify accuracy of the adjusting entries and post to the general ledger by clicking [Post entries].

b.Closing Entries. Although closing entries were made in each fund in Chapters 4 through 6 of this cumulative problem, they have not yet been recorded at the government-wide level.

Required: Record the journal entries required on December 31, 2020 to close all temporary accounts for governmental activities at the government-wide level. These entries should also recognize changes in the accounts Net PositionNet Investment in Capital Assets, Net PositionRestricted for Public Safety (see General Fund), and Net PositionRestricted for Capital Projects (see Capital Projects Fund to calculate net position). (Note: Due to the need to deduct accrued interest on long-term debt in calculating the December 31, 2020 balance of Net PositionRestricted for Debt Service you will end up with no restriction on net position for debt service.)For each account to be closed or reclassified, be sure and click on the check mark for [Closing Entry] and that "Closing Entries" appears in the [Add credit] field.Post the closing entries to the general ledger by clicking on [Post entries].

c.Use the exportable trial balances used in Chapters 2 through 6 of this problem, and the exportable pre-closing trial balance and post-closing trial balance for governmental activities, to prepare required government-wide and governmental fund financial statements and reconciliations that the City of Smithville must present for its basic financial statements to be in conformity with generally accepted accounting principles. (See Illustrations 9-3 through 9-8 of the textbook for examples of these statements.) We recommend that you use Excel to prepare these financial statements; however, your instructor may want you to do these manually. (Note: The City of Smithville is a primary government and has no other organizations for which it is accountable as component units.)