(Interfund Transactions and Errors) (a) Prepare general journal entries to record the following transactions in the General Ledger of the General Fund or a Special Revenue Fund, as appropriate. (b) Explain how these transactions and events are reported in the General Fund or Special Revenue Fund Statement of Revenues, Expenditures, and Changes in Fund Balance. 1. $100,000 of General Fund cash was contributed to establish a new Internal Service Fund. 2. A truck?acquired two years ago with General Fund revenues for $19,000?with a fair value of $10,000 was contributed to a department financed by an Enterprise Fund. (Record the contribution of the asset to the Enterprise Fund?not the purchase.) 3. The Sanitation Department, accounted for in the General Fund, billed the Municipal Airport, accounted for in an Enterprise Fund, $800 for garbage collection. 4. General Fund cash of $50,000?to be repaid in 90 days?was provided to enable construction to begin on a new courthouse before a bond issue was sold. 5. A $9,000,000 bond issue to finance construction of a major addition to the civic center was sold at par. The civic center is accounted for as part of general government activities. 6. General Fund disbursements during May included a contribution of $35,000 to a Capital Projects Fund to help finance a major capital project. 7. After retirement of the related debt, the balance of the net assets (all cash) of a Debt Service Fund, $8,500, was transferred to the General Fund. 8. General Fund cash of $70,000 was loaned to an Enterprise Fund from resources that have been assigned to a specific future purpose. The loan is to be repaid in three years. 9. An accounting error made during the preceding accounting period caused the General Fund cash balance at the beginning of the current year to be understated by $6,500. 10. Another accounting error was discovered: Expenditures of $4,000, properly chargeable to a Capital Projects Fund, were inadvertently charged to a Special Revenue Fund during the current year.

Problems P3-1 (Interfund Transactions and Errors) (a) Prepare general journal entries to record the following transactions in the General Ledger of the General Fund or a Special Revenue Fund, as appropriate. (b) Explain how these transactions and events are reported in the General Fund or Special Revenue Fund Statement of Revenues, Expenditures, and Changes in Fund Balance. 1. $100,000 of General Fund cash was contributed to establish a new Internal Service Fund. 2. A truckacquired two years ago with General Fund revenues for $19,000with a fair value of $10,000 was contributed to a department financed by an Enterprise Fund. (Record the contribution of the asset to the Enterprise Fundnot the purchase.) 3. The Sanitation Department, accounted for in the General Fund, billed the Municipal Airport, accounted for in an Enterprise Fund, $800 for garbage collection. 4. General Fund cash of $50,000to be repaid in 90 dayswas provided to enable construction to begin on a new courthouse before a bond issue was sold. 5. A $9,000,000 bond issue to finance construction of a major addition to the civic center was sold at par. The civic center is accounted for as part of general government activities. 6. General Fund disbursements during May included a contribution of $35,000 to a Capital Projects Fund to help finance a major capital project. 7. After retirement of the related debt, the balance of the net assets (all cash) of a Debt Service Fund, $8,500, was transferred to the General Fund. 8. General Fund cash of $70,000 was loaned to an Enterprise Fund from resources that have been assigned to a specific future purpose. The loan is to be repaid in three years. 9. An accounting error made during the preceding accounting period caused the General Fund cash balance at the beginning of the current year to be understated by $6,500. 10. Another accounting error was discovered: Expenditures of $4,000, properly chargeable to a Capital Projects Fund, were inadvertently charged to a Special Revenue Fund during the current year. P3-2 (General FundTypical Transactions) Prepare all general journal entries required in the General Fund of Washington County for each of the following transactions. Also, use transaction analysis to show any effects on the GCA-GLTL accounts. 1. The county levied property taxes of $5,000,000. Two percent are expected to prove uncollectible. The rest of the taxes are expected to be collected by year-end or soon enough thereafter to be considered available at year-end. 2. The county collected $4,300,000 of the taxes receivable before the due date and the balance of taxes became delinquent. 3. The county collected another $540,000 of the taxes receivable by the end of the fiscal year. 4. The county paid salaries and wages of $3,500,000 to General Fund employees during the year. Accrued salaries at the beginning of the year were $180,000, and accrued salaries at year-end were $200,000. 5. $800,000 was loaned from the county General Fund (from resources available for general purposes) to the Washington County Inland Port Authority Enterprise Fund. The loan is to be repaid in three years. 6. The county purchased materials and supplies for various General Fund departments. The actual cost of $398,000 was vouchered. 7. The county purchased road maintenance equipment at an actual cost of $40,000, which was vouchered. 8. The county contributed $500,000 of General Fund money to provide partial financing for construction of its recently approved sports center. The balance of the cost will be financed by grants and borrowings. 9. The county borrowed $100,000 for General Fund purposes on a 6-month, 6% note. The note was issued 2 months before year-end. Prepare any required year-end adjustments as well as recording the original transaction. P4-3 (Budgetary Comparison Statement) This problem is based on the information about the Murphy County General Fund budgeted and actual transactions and events described in Problem 4-2. Required 1. Prepare a budgetary comparison statement for the General Fund of Murphy County for the 20X8 fiscal year. The statement should present revenues (by source category), expenditures and encumbrances (by function), and the excess of revenues over (under) expenditures and encumbrances. Use these column headings: Original Budget Revised Budget Actual VarianceFavorable (Unfavorable) Assume that no encumbrances were outstanding at the beginning of 20X8. 2. Because encumbrances do not constitute expenditures, some governmental fund budgetary comparison statements omit data on encumbrances. (a) If no encumbrances were outstanding at the beginning of 20X8, what effects would omission of encumbrances data have on the Murphy County General Fund budgetary comparison statement for the 20X8 fiscal year? (b) In what circumstances would including or excluding encumbrances data mislead users of a governmental fund budgetary comparison statement