Governmental and Not-for-Profit Accounting

Complete journal entries for the following events and transactions

The city council of Rapid City approved the following budgets for fiscal 2016:

General Fund:

Estimated Revenues
Property Taxes	$10,000,000
Sales Taxes	3,000,000
Intergovernmental Grants	3,500,000
Licensing Fees and Fines	180,000
Total Estimated Revenues	$16,680,000
Appropriations
Food Inspection Program	$2,200,000
Salaries Food Inspection Program	9,500,000
Supplies Other Programs	135,000
Other Program Costs	725,000
Transfer to Debt Service Fund	135,000
Total Appropriations	12,695,000
Budgeted Change in Fund Balance	$3,985,000

Capital Projects Fund:

Estimated Revenues
Intergovernmental Grants	$ 780,000
Investment Income	100,000
Total Estimated Revenues		$ 880,000
Appropriations
Park Construction	$5,400,000
Park Equipment	660,000
Transfer to Debt Service Fund	100,000
Total Appropriations		6,160,000
Budgeted Change in Fund Balance		($5,280,000)

Debt Service Fund:

Estimated Revenues
Special Tax Assessment	$ 460,000
Investment Income	4,000
Total Estimated Revenues		$ 464,000
Estimated Other Financing Sources
Transfer in From General Fund	135,000
Transfer in From Capital Projects Fund	100,000
Total Estimated Other Financing Sources		$ 235,000
Appropriations
Interest	$225,000
Principal	280,000
Total Appropriations		( 505,000)
Budgeted Change in Fund Balance		$ 194,000

1. Purchase orders issued but not received by December 31, 2015 were received in January 2016 for $3,800.

2. The city collected 98% of the delinquent property taxes outstanding at the end of 2015 in the General Fund. The remaining delinquent amount was written off as uncollectible. All of the late payment penalties and interest (100%) were collected. Hint: Remember when writing off (eliminating) uncollectible reserves, revenue is recognized. Originally setting up uncollectible allowance amounts reduced revenue.

3. The state paid the amount owed to the city as of December 31, 2015.

4. In January 2016, the Capital Projects Fund invested the bonds issued in December 2015 in a 6-month CD bearing interest at 4.25% per annum.

5. The city paid the amount due to Federal government related to payroll taxes.

6. The city authorized temporary borrowing of $500,000 as a 120-day tax anticipation note. The loan was obtained from a local bank at 6%. (Record only the receipt of the loan at this time.)

7. The city received an advance of 80% of the budgeted intergovernmental grant in the General Fund from the state for the food inspection program.

8. The city levied property taxes in the amount of $1,000,000 and established an allowance for uncollectible taxes and discounts equal to 5% of the taxes levied.

9. The city levied the special tax assessment to service the bond issue for the new city park. The city levied $460,000 in anticipation of realizing net cash of $437,000, establishing a $23,000 allowance for uncollectible taxes and discounts.

10.Purchase orders for supplies were placed in the amount of $(900,000 + 10,000).

11. The city entered into two construction contracts for the new city park: (a) Hillside Construction Co. for $4,825,000 and (b) Palmer Engineering for $675,000.

12. The city collected 95% of the property taxes levied in 2016. Taxpayers deducted $(1% of $1,000,000) in discounts for early payment of bills.

13. The city repaid the tax anticipation loan, plus interest, to the bank.

14. The city approved encumbrances of $685,000 for Other program costs.

15. The General Fund transferred the $135,000 to the Debt Service Fund for principle payment on the Capital Project Fund bonds.

16. The city collected $410,000 of the special assessment tax bills, after taxpayers deducted $3,200 in discounts for early payment.

17. All remaining unpaid special assessment taxes were declared delinquent. The city comptroller concluded that a 1% allowance for uncollectible taxes is necessary for the delinquent special assessment taxes.

18. The city paid 65% of the budgeted amount to operate the food inspection program.

19. The city received $500,000 of the federal grant for the construction of the new city park. Based on the provisions of the grant, the city recognized the amount received as revenue. The grant stipulated that the park must be completed by the end of the fiscal year in order to receive the remaining $50,000 pledged to the project.

20. The Debt Service Fund paid the first installment payment plus interest on the bonds issued for the new city park.

21. The CD in the Capital Projects Fund matured and the city received the principle and interest from the CD.

22. The city vouchered $675,000 related to the encumbered Other Program Costs. (Journal entry #15)

23. During 2016, the city collected 97% of the budgeted amount ($900,000) in sales taxes.

24. Hillside Construction completed 70% of the work on the park and submitted an invoice for $3,400,000. Palmer Engineering also completed 80% of their work and submitted an invoice for $540,000. The city vouchered these invoices.

25. The city billed 80% of the budgeted amount of licensing fees and fines (through violation notices). There is no uncollectible allowance account for licensing fees and fines receivable.

26. The city received and vouchered invoices totaling 85% of the amount in journal entry #11 for payment. The amount encumbrances related to these invoices total 90% of the amount in journal entry #11 related to Supplies Other Programs.

27. The city canceled encumbrances totaling 3.5% of the amount in journal entry #11 related to Supplies Other Programs.

28. The city paid the vouchered construction contracts (journal entry #25), less 5% retainage.

29. The city ordered park equipment in the amount of $700,000 for the new city park.

30. The city paid the previously vouchered invoices related to the Other Program Costs. (journal entry #23)

31. Salaries of 95% of the budgeted salaries were recorded as Salaries Food Inspection Program during the year. Of this amount, the following were withheld from employees: 15% for federal income taxes, 5% for state income taxes, 7.65% for FICA taxes. The remaining amount was paid to employees.

32. The city recorded its share of FICA tax liability (7.65%) related to the food inspection program salaries.

33. The park equipment ordered in journal entry #30 was received and inspected. The city vouchered the invoice amount of $680,000.

34. The city collected 94% of the amount billed for license fees and fines in cash during the year and expects to collect the rest during the first 60 days of 2017. (Refer to journal entry #26)

35. The city paid 30% of the budgeted amount for the food inspection program.

36. The city filed a claim for the balance due from the state for the food inspection program and recognized the revenue from the grant since the program expenditures were now paid. (See journal entries #8)

37. The city paid for the vouchered supplies received earlier (journal entry #27).

38. The new city park was completed on time, but a little over budget. The federal government was billed for the remaining $50,000 grant, which is expected to be collected in the first 60 days of fiscal 2017.

39. The city received and vouchered the final invoices for the construction of the city park: (a) Hillside Construction for $1,540,000 and (b) Palmer Engineering for $140,000.

40. All remaining unpaid property taxes were declared delinquent. The city comptroller concluded that an allowance for uncollectible taxes for property taxes should be 5% of the delinquent property taxes. (journal entries #9 and #13) Hint: Creating allowance for uncollectible accounts reduces revenue)

41. Interest and penalties related to the delinquent property taxes were accrued at 3%, with 1% estimated to be uncollectible. The 1% estimated to be uncollectible means 1% of the interest and penalties receivable delinquent amount, not 1% of the original receivable amount.

42. After inspection, the city paid Hillside Construction and Palmer Engineering for the previously vouchered invoices, plus the retainage. (Journal entries #25, #29, and #40)

43. The city paid 97% of the amount due to Federal government related to salaries. The city paid 100% of the amount due to state government related to salaries. (Refer to journal entries #32 and #33)

44. The city paid for the vouchered park equipment. (Journal entry #34)

45. The remaining project funds in the Capital Project Fund were transferred to the Debt Service Fund.

46. The Debt Service Fund paid the second installment payment plus interest on the bonds issued for the new city park.

47. The physical supplies inventory count at year-end totaled 3% of the budgeted amount for Supplies Other Programs. Encumbrances of $8,000 related to supplies ordered but not received by year end remain open. The purchase orders will be honored against 2017s appropriation.

48. The city determined vacation leave pay earned during the year is 2% of budgeted Salaries. The city vouchered and paid 85%.

49. Of the remaining 15% vacation leave earned, 10% is expected to be paid with expendable available financial resources in 2017. The 10% means 10% of the 15%, not 10% of total vacation pay earned.