HARVEY CITY ADDICTION PREVENTION SPECIAL REVENUE FUND

The Addiction Prevention Special Revenue Fund was established in 20X4 to account for federal grants intended to help communities prevent and battle drug and alcohol addictions. Because this is the first year for this fund, there is no beginning trial balance for the Addiction Prevention Special Revenue Fund.

HARVEY CITY ADDICTION PREVENTION SPECIAL REVENUE FUND REQUIREMENTS

1. Prepare a worksheet for the Addiction Prevention Special Revenue Fund similar to the General Fund worksheet you created in Chapter 4. Enter the effects of the following transactions and events in the appropriate columns of the worksheet. (A different solution approach may be used if desired by your professor.)

2. Enter the preclosing trial balance in the appropriate worksheet columns.

3. Enter the preclosing trial balance amounts in the closing entry and postclosing trial balance (balance sheet data) columns, as appropriate.

4. Prepare the 20X4 Statement of Revenues, Expenditures, and Changes in Fund Balance for the Addiction Prevention Special Revenue Fund.

5. Prepare the 20X4 balance sheet for the Addiction Prevention Special Revenue Fund. (Assume that all but $60,000 of the resources of the fund at December 31, 20X4 are restricted.)

Transactions and Events20X4

1. The city council adopted the budget for the Addiction Prevention Special Revenue Fund. The budget for the fund included estimated grant revenues of $530,000 and appropriations for public safety of $525,000.

2. The city was awarded a federal grant for drug addiction and enforcement programs. The grant requires the city to incur qualifying expenditures, then apply for reimbursement. The total amount of the grant award, which can be used anytime during the next 3 years, is $1,200,000none of which is received at this time.

3. The city contracted for and received services costing $450,000 that qualify for reimbursement under the grant agreement. The expenditures, for the Public Safety function, were vouchered.

4. The Addiction Prevention Special Revenue Fund borrowed $500,000 from the General Fund on a short-term basis.

5. The city paid $430,000 of the vouchers payable.

6. The city applied for and received reimbursement of $450,000 from the federal grantor agency under the provisions of the grant agreement.

7. The city incurred and vouchered $75,000 of Public Safety expenditures for the Addiction Prevention program: $50,000 of the costs is reimbursable under the grant agreement. The city applied for reimbursement, which is expected early next year.

8. $250,000 of the loan from the General Fund was repaid.

9. A transfer of $60,000 was received from the General Fund.

10. The budgetary accounts were closed at year end. (Close the budgetary accounts in the transactions columns.)