MAR-10-2010 07:43P FROM: I CHOICE LLC 9145123000 TO:5123000 P.1 PRACTICE SET Introduction In the practice set you will have the opportunity to maintain a set of accounting records for a typical local town government encompassing the first two months of its fiscal year. At the end of the second month we will make the adjusting and closing entries as if it were the end of the fiscal year. We will also prepare the appropriate financial statements. The town maintains its accounting records on the modified accrual basis of accounting. This means that all material items of revenues earned or expenditures incurred are accrued in order to prepare the financial statements. The accounting system used by the town is prescribed by the State Comptroller and consists of the following records: General Journal Cash Disbursements Journal Cash Receipts Journal General Ledger Subsidiary Expenditure Ledger Subsidiary Revenue Ledger Also included in the practice set is a chart of accounts and a schedule of exhibits to assist in recording the appropriate transactions. Balances from the previous year have been brought forward in the General Ledger. INTRODUCTION TO GOVERNMENTAL ACCOUNTING MAR-10-2010 07:43P FROM: I CHOICE LLC 9145123000 TO:5123000 P.2 Practice Set CHART OF ACCOUNTS General Fund -General Ledger Account Codes Assets A200 Cash A201 Cash in Time Deposits A250 Taxes Receivable, Current A410 State and Federal, Other A440 Due from Other Governments Budgetary and Expenditure Accounts A510 Estimated Revenues A521 Encumbrances A522 Expenditures A599 Appropriated Fund Balance Liabilities A600 Accounts Payable A601 Accrued Liabilities Fund Balance, Reserved A821 Reserve for Encumbrances Fund Balance, Unreserved A909 Fund Balance, Unreserved Budgetary and Revenue Accounts A960 Appropriations A980 Revenues 2 MAR-10-2010 07:43P FROM: I CHOICE LLC 9145123000 Practice Set TO:5123000 P.3 General Fund-Individual Revenue and Expenditure Account Codes Revenue Account Codes A1001 Real Property Taxes A1090 A1120 A1255 Interest on Taxes Non-Property Tax Distribution by County (Sales Tax) Clerk Fees A3820 Youth Programs Expenditure Account Codes A1990.4 Contingent Account A3120.1 Police Personal Services A3120.2 Police-Equipment and Other Capital Outlay A3120.4 Police-Contractual Expenditure A7110.1 Parks Personal Services A7110.2 Parks-Equipment and Other Capital Outlay A7110.4 Parks-Contractual Expenditure Practice Set-Assumptions and Exhibits The following assumptions and exhibits will be used in preparing the practice set. The Town's opening balances are: 200 Cash $40,000 410 State and Federal, Other $10,000 440 Due from Other Governments $10,000 909 Fund Balance $60,000 Exhibit A (General Ledgers are already posted) The following budget was approved for 20XX year. A510 Estimated Revenues A1001 A1120 A3820 Real Property Taxes Sales Tax State Aid A599 Appropriated Fund Balance A960 Appropriations 3 PROF.B $ 100,000 $50,000 40,000 10,000 $ 30,000 $130,000 INTRODUCTION TO GOVERNMENTAL ACCOUNTING HAR-10-2010 07:43P FROM:I CHOICE LLC 9145123000 TO:5123000 Practice Set A3120.1 A3120.2 Police - Equipment Appropriation Subsidiaries Police - Personal Services $ 50,000 21,000 A3120.4 Police - Contractual A7110.1 Parks- Personal Services A7110.2 Parks - Equipment A7110.4 Parks-Contractual A1990.4 Contingent Account 11,000 25,000 12,000 10,000 1.000 $130.000 Exhibit B The following payrolls were prepared and recorded during the first two months. The town pays all employees on a bi-weekly basis. Payroll #1 Police 3120.1 Parks 7110.1 $1,500.00 $ 750.00 (only gross payroll entries will be made) Payroll #2 Police 3120.1 $1,500.00 Parks 7110.1 $ 750.00 Payroll #3 Police 3120.1 Parks 7110.1 $1,500.00 $ 750.00 Payroll #4 Police 3120.1 Parks 7110.1 4 $1,500.00 $ 750.00 MAR-10-2018 07:43P FROM: I CHOICE LLC 9145123000 TO:5123000 P.5 Practice Set The following abstracts were paid during the two-month period of our practice set. Exhibit C PROF B Abstract #1 Claim # Claimant Account Amount Check # 1 ABC Park Equipment 7110.2 $ 300.00 2 Lewis Uniforms 3120.4 500.00 3 Handy Plumbing 7110.4 100.00 4 King Hardware 7110.4 250.00 5 Eager Janitorial Service 31204 100.00 $1,250.00 Summary 3120.4 $ 600.00 7110.2 300.00 7110.4 350.00 $1,250,000 Abstract #2 Claim # Claimant Account Amount Check # 6 Jack's Printing Company 7110.4 200.00 7 XYZ Equipment 3120.2 *12,400.00 8 Jones Lumber 7110.4 100.00 9 Handy Plumbing 7110.4 100.00 10 Lewis Uniforms 3120.4 400.00 $13.200.00 Summary 3120.2 $12,400.00 3120.4 400.00 7110.4 400.00 $13,200.00 *This was originally encumbered. 5 INTRODUCTION TO GOVERNMENTAL ACCOUNTING January 30 Abstract #1 in Exhibit C is paid. January 31 Tax Collector remits tax moneys in the amount of $40,000. February 1 February 2 - The Police Department issues purchase order #1 for equipment (3120.2) in the amount of $13,000. Receives State aid for youth program in the amount of $1,100 ($100 adjustment for mathematical mistake)