Fund Accounting-Journal Entries for General Fund & Special Revenue Fund

Review the information for the Town of Mirth for the appropriate journal entries with explanation.

For the year 2018, the Town of Mirth was approved to receive on-going infrastructure surtax revenues from monies collected by the State. A seperate bank account for the special revenue fund intended to receive the infrastructure surtax proceeds was not established until 2020. Prior to the seperate bank account, the General Fund received all the infrastructure surtax revenue proceeds. In 2020, a check was issued from the general fund in the amount of $14000 as the initial deposit for the special revenue fund. Furthermore, in 2020 & 2021, the Town of Mirth received federal aid in the form of FEMA & ARPA proceeds, which was deposited into the general fund account, in addition to the enterprise revenue received for the services the town provides to its residents. In 2020, the Town of Mirth had an expenditure of $2800 for the inspection and repair estimation of its town hall building, the proceeds were taken from the general fund account with reimbursement being issued by the special revenue fund account.

Revenues Collected: Infrastructure Surtax $5193 CYE 2018 Infrastructure Surtax $9577 CYE 2019 Infrastructure Surtax $7544 CYE 2020 Infrastructure Surtax $10195 CYE 2021

Enterprise Revenue $9293 CYE 2018 Enterprise Revenue $9798 CYE 2019 Enterprise Revenue $10568 CYE 2020 Enterprise Revenue $12074 CYE 2021

Expenditures (GF) $4295 CYE 2018 Expenditures (GF) $5425 CYE 2019 Expenditures (GF) $6285 CYE 2020 Expenditures (GF) $7455 CYE 2021

FEMA Proceeds $15000 CYE 2020 ARPA Proceeds $36000 CYE 2020

1. If the general fund balance was $720000 at the end of 2017, what is the subsequent fund balance at the end of 2018, 2019, 2020, 2021? Indicate the net change as a journal entry for each period.

2. If the seperate bank account for the special revenue fund was not established until 2020, indicate the accrual journal entries of infrastructure surtax received in the general fund that require reclassification to establish the special revenue fund balance for 2018, 2019, 2020, 2021.

3. If the check issued from the general fund to the special revenue fund to establish the correct cash balance against the revenue received was issued for an amount less than the revenue collected, indicate the journal entry that corresponds to the check issuance and to the remaining balance due to the special revenue fund from the general fund.

4. The federal aid proceeds received were not previously accounted for. Indicate the journal entries required to account for the additional revenue.

5. What is the balance due to the special revenue fund at the end of 2020 from the general fund?

6. As of 2021, the special revenue fund has not received the funds due from the general fund, indicate the journal entry for a check issuance of the due to balance owed from the previous years.