Need help for City of Smithville project Chapter 11 preparation of Audit report. (Accounting for Govt&Nonprofit Entities class) Here the instruction Chapter 11 Preparation of Audit Report (Optional, unless assigned) Use your word processor software to prepare the audit report you believe would be appropriate for a certified public accountant to express on the financial statements of the City of Smithville, assuming that only generally accepted auditing standards (GAAS) promulgated by the AICPA apply to the City of Smithville. Explain the rationale for the nature of the audit report (qualified or unqualified) rendered. Answers for City of Smithville project Ch4-9 General Fund Balance Sheet (2014) - Total Assets = 980,932 General Fund Statement of Revenues, Expenditures, etc. (2014) - Excess of Revenues over Expenditures = 93,789 General Fund Statement of Revenues, Expenditures, etc. (2014) - Budget and Actual Street Improvement - Fund Balance Sheet ? 2014 (total assets = $410,395) Street Improvement-Revenues and Expenditures 2014 (Expenditure>Revenue=1,589,605) Computation of Legal Debt Margin ? 2015 Debt Service - Fund Balance Sheet ? 2015 (total assets = $575,795) Debt Service - Revenues and Expenditures ? 2015 (Increase in fund balance=547,795) Debt Service - Revenues and Expenditures ? 2015 ? Budget and Actual Solid Waste Disposal ? Statement of Net Assets ? 2014 (total assets = $2,566,030) Solid Waste Disposal ? Revenues and Expenses ? 2014 (Operating income = $51,440) Solid Waste Disposal ? Statement of Cash Flows? 2014 (Increase in Cash =29,500) Tax Agency Fund ? Statement of Position? 2014 (total assets = $1,720,681) I posted the report I did for Ch4-9 and the full instruction Thanks

City of Smithville Street Improvement Fund Post-Closing Trial Balance For year 2014 Account Debits Credits Cash Investment Accrued Sales Taxes Receivable Interest Receivable on Investment Fund BalanceRestricted Encumbrances Outstanding-Spruce Street Project Encumbrances -Spruce Street Project $169,895 200,000 40,000 500 $1,500,000 Totals for all accounts $1,910,395 $1,910,395 $410,395 1,500,000 5-c City of Smithville Street Imporvement Fund Balance Steet As for December 31, 2014 Assets Cash Investment Accrued Sales Taxes Receivable Interest Receivable on Investment Totals Accounts Liabilities and Fund Balances Liabilities: Fund Balances: Restriceted Total Liabilities and Fund Balances $169,895 200,000 40,000 500 $410,395 $0 $410,395 $410,395 City of Smithville Street Improvement Fund Post-Closing Trial Balance For year 2014 Account Cash Investment Accrued Sales Taxes Receiable Interest Receivable on Investment Encumbrances Outstanding-Spruce Street Project Revenues-Sales Taxes Revenues-Investment Earnings Other Financing Sources-Proceeds of Bonds Construction Expenditures-Elm Street Project Construction Expenditures-Spruce Street Project Interest Expenditures Encumbrances-Spruce Street Project Totals for all accounts Debits Credits $169,895 200,000 40,000 500 $1,500,000 455,000 15,500 2,000,000 $2,029,300 30,340 465 1,500,000 $3,970,500 $3,970,500 5-d City of Smithville Street Imporvement Fund Statement of Revenues, Expenditures and Changes in Fund Balances For the Year Ended December 31, 2014 Revenue Sales Taxes Interest on Short-Term Investement Total Revenues Expenditures Construction Expednitures-Elm Street Project Construction Expednitures-Spruce Street Project Interest Expenditures Total Expenditures Excess of Expenditures over Revenues Other Financing Sources-Proceeds of Bonds Increase in Fund Balances Fund Balances, Jan 1 Fund Balances, Dec 31 $455,000 15,500 $470,500 $2,029,300 30,340 465 $2,060,105 ($1,589,605) $2,000,000 $410,395 0 $410,395 6-d City of Smithville Computation of Legal Debt Margin As for Dec 31, 2014 Total Assessed Valuation Maximum general obligation debt, limited to 8% of assessed valuation Deferred serial bonds outstanding chargeable to limit Legal Debt Margin, Dec.31, 2014 $303,035,714 $24,242,857 $2,000,000 $22,242,857 City of Smithville Street Improvement Bond Debt Service Fund Post-Closing Trial Balance For year 2015 Account Debits Cash Taxes ReceivableDelinquent Estimated Uncollectible Delinquent Taxes Interest and Penalties Receivable on Taxes Estimated Uncollectible Interest and Penalties Investments Fund BalanceRestricted $292,375 45,000 Totals for all accounts $595,975 Credits $20,000 3,600 180 255,000 575,795 $595,975 6-f City of Smithville Street Improvement Bond Debt Service Fund Balance Sheet As of December 31, 2015 Assets Cash Taxes receivable--delinquent Estimated uncollectible delinquent taxes Interest and penalties receivable on taxes Estimated uncollectible interest and penalties Investments Total Assets $292,375 $45,000 ($20,000) $3,600 ($180) $25,000 $3,420 $255,000 $575,795 Fund Balance Restricted $575,795 City of Smithville Street Improvement Bond Debt Service Fund Pre-Closing Trial Balance For year 2015 Account Debits Cash Taxes ReceivableDelinquent Estimated Uncollectible Delinquent Taxes Interest and Penalties Receivable on Taxes Estimated Uncollectible Interest and Penalties Investments Fund BalanceRestricted Budgetary Fund Balance Estimated RevenueTaxes Estimated RevenueInvestment Income Estimated RevenueAccrued Interest on Bonds Sold Estimated Other Financing SourcesPremium on Bonds RevenueTaxes RevenueInterest and Penalties on Taxes RevenueInvestment Income RevenueAccrued Interest on Bonds Sold Other Financing SourcesPremium on Bonds Appropriations ExpendituresBond Interest Totals for all accounts Credits $292,375 45,000 $20,000 3,600 180 255,000 28,000 544,375 640,000 4,375 25,000 30,000 640,000 3,420 4,375 25,000 30,000 155,000 155,000 $1,450,350 $1,450,350 6-g City of Smithville Street Improvement Bond Debt Service Fund Statement of Revenues, Expenditures, and Changes in Fund Balance For the Year Ended December 31, 2015 Revenues Property taxes Interest and penalties on taxes Accrued interest on bonds sold Investment income $640,000 3,420 25,000 4,375 Total Revenues $672,795 Expenditures Bond interest Excess of Revenues over Expenditures 155,000 $517,795 Other Financing Sources Premium on bonds sold Increase in Fund Balance Fund Balance, January 1, 2015 Fund Balance, December 31, 2015 30,000 547,795 $28,000 $575,795 6-h City of Smithville Street Improvement Bond Debt Service Fund Schedule of Revenues, Expenditures, and Changes in Fund Balance Budget and Actual For the Year Ended December 31, 2015 Actual Over (Under) Budget Budget Actual Revenues Property taxes Interest and penalties on taxes Accrued interest on bonds sold Investment income Total Revenues $640,000 0 25,000 4,375 $669,375 $640,000 3,420 25,000 4,375 $672,795 $0 3,420 0 0 $3,420 Expenditures Bond interest Excess of Revenues over (under) Expenditures 155,000 $514,375 155,000 $517,795 0 $3,420 30,000 $30,000 544,375 28,000 572,375 30,000 $30,000 547,795 28,000 575,795 0 $0 3,420 0 3,420 Other Financing Sources Premium on bonds sold Total Other Financing Sources Increase in Fund Balance Fund Balance, January 1, 2015 Fund Balance, December 31, 2015 City of Smithville Solid Waste Disposal Fund Post-Closing Trial Balance For year 2014 Account Cash Customer Accounts Receivable Allowance for Doubtful Accounts Due from Other Funds Inventories Land Buildings Accumulated DepreciationBuildings Equipment Accumulated DepreciationEquipment Vouchers Payable Due to Other Funds Accrued Payroll and Fringe Benefits Accrued Interest Payable Accrued LiabilityEstimated Closure/Postclosure Costs Revenue Anticipation NotesCurrent Revenue Anticipation NotesLongterm Net PositionNet Investment in Capital Assets Net PositionUnrestricted Totals for all accounts Debits Credits $317,500 217,100 $16,140 6,400 4,060 600,000 1,650,000 $791,250 1,340,400 $755,640 45,180 12,000 66,720 2,500 324,000 50,000 50,000 1,943,510 78,520 $4,135,460 $4,135,460 7-d City of Smithville Solid Waste Disposal Fund Statement of Net Position As of December 31, 2014 Assets Current Assets: Cash Customer account receivable less: Allowance for doubtful account Inventory Total Curren Assets Property, Plant and Equipment: Land Buildings Less: Accumulated depreciation- builings Equipment Less: Accumulated depreciation- equipment Total property, plant and equipment $317,500 $217,100 $16,140 $600,000 $1,650,000 $791,250 $1,340,400 $755,640 Total Assets Libilities Current Libilities: Vouchers payable Due to other funds Accrued payroll and finge benefits Accrued interest payable Revenue anticipation notes-current Total Current Liabilities Long-term Liabilities: Accrued liability-est. closure and psotclosure costs Revenue anticipation notes-long-term Total Long Term Liabilities Total net position $858,750 $584,760 $2,043,510 $2,566,030 $45,180 $5,600 $66,720 $2,500 $50,000 $170,000 $324,000 $50,000 $374,000 Total Liabilities Net Position Net investment in captial assets Unrestriced $200,960 $4,060 $522,520 $544,000 $1,943,510 $78,520 $2,022,030 City of Smithville Solid Waste Disposal Fund Pre-Closing Trial Balance For year 2014 Account Cash Customer Accounts Receivable Allowance for Doubtful Accounts Due from Other Funds Inventories Land Buildings Accumulated DepreciationBuildings Equipment Accumulated DepreciationEquipment Vouchers Payable Due to Other Funds Accrued Payroll and Fringe Benefits Accrued Interest Payable Accrued LiabilityEstimated Closure/Postclosure Costs Revenue Anticipation NotesCurrent Revenue Anticipation NotesLongterm Net PositionNet Investment in Capital Assets Net PositionUnrestricted Charges for Services Payroll and Fringe Benefits Expense Materials and Supplies Expense Depreciation Expense Provision for Closure and Postclosure costs Provision for Doubtful Accounts Interest Expense Totals for all accounts Debits Credits $317,500 217,100 $16,140 6,400 4,060 600,000 1,650,000 791,250 1,340,400 755,640 45,180 12,000 66,720 2,500 324,000 50,000 50,000 1,888,800 84,290 2,268,960 1,162,690 786,480 145,290 120,000 3,060 2,500 $6,355,480 $6,355,480 7-e City of Smithville Solid Waste Disposal Fund Statement of Revenue, Expenses, and Changes in Net Position For Year Ended December 31, 2014 Operating Revenue: Charge for services (net of $3,060) Operating Expenses: Payroll and fringe benefits expenses Materials and supplies expenses Depreciation expenses Provision for closure and postclosure costs Total operating expenses Operating Income Non-operating Revenues/Expenses: Interest expense Charge in Net Position Total net position, January 1, 2014 Total net position, December 31, 2014 $2,265,900 $1,162,690 $786,480 $145,290 $120,000 $2,214,460 $51,440 $2,500 $48,940 $1,973,090 $2,022,030 7-f City of Smithville Solid Waste Disposal Fund Statement of Cash Flows For the Year Ended December 31, 2014 Cash flows from operating activities Cash received from customers Cash paid to employees for services Cash paid to vendors for supplies Net cash provided by operating activities Cash flows from capital and related financing activities: Acquisition of equipment Net decrease in cash and cash equivalents Cash and cash equivalents, January 1, 2014 Cash and cash equivalents, December 31, 2014 $2,190,900 ($1,182,800) ($778,600) $229,500 ($200,000) $29,500 $288,000 $317,500 Reconciliation of Operating Income to Net Cash Provided by Operating Activities Operating Income $51,440 Adjustments: Depreciation expense $145,290 Increase in net accounts receivable ($68,600) Decrease in inventories $980 Decrease in vouchers payable ($5,100) Increase in interfund payables (net) $5,600 Decrease in accrued payroll and fringe benefits ($20,110) Increase in accrued liabilityclosure and postclosure costs $120,000 Net Cash Provided by Operating Activities $229,500 City of Smithville Tax Agency Fund Post-Closing Trial Balance For year 2014 Account Taxes receivable for other funds and governments-deliquent Due to other funds and governments Total for all accounts Debits Credits $2,152,563 $2,152,563 $2,152,563 $2,152,563 Statement of Fiduciary Net Position Tax Agency Fund City of Smithville As of December 31, 2014 Assets Taxes receivable for other funds and governments- Deliquent Total Assets $1,720,681 $1,720,681 Liabilities Due to other funds and governments Total Liabilities $1,720,681 $1,720,681 City of Smithville Governmental Activities, Government-Wide Level Pre-Closing Trial Balance For year 2014 Account Cash Taxes ReceivableDelinquent Estimated Uncollectible Delinquent Taxes Interest and Penalties Receivable on Taxes Estimated Uncollectible Interest and Penalties Due From State Government Accrued Sales Taxes Receivable Interest Receivable on Investments Internal Receivables from BusinessType Activities Inventory of Supplies Investments Land Infrastructure Accumulated DepreciationInfrastructure Buildings Accumulated DepreciationBuildings Equipment Accumulated DepreciationEquipment Construction in Progress Vouchers Payable Due to Federal Government Due to State Government Accrued Interest Payable on Longterm Debt Internal Payables to BusinessType Activities 4% Deferred Payable Serial Bonds Payable Premium on 4% Deferred Serial Bonds Payable Net PositionNet Investment in Capital Assets Net PositionUnrestricted Program RevenuesGeneral GovernmentCharges for services Program RevenuesCulture and RecreationCharges for Services Program RevenuesPublic SafetyOperating Grants and Contributions General RevenuesTaxesReal Property General RevenuesTaxesSales General RevenuesInterest and Penalties on Taxes General RevenuesMiscellaneous General RevenuesInvestment Earnings ExpensesGeneral Government ExpensesPublic Safety ExpensesPublic Works ExpensesHealth and Welfare ExpensesCulture and Recreation ExpensesInterest on Longterm Debt Totals for all accounts Debits Credits $594,185 391,756 $70,650 40,126 13,190 165,000 40,000 500 12,000 66,000 200,000 4,180,000 11,891,300 2,713,944 6,296,000 1,771,000 3,556,800 1,765,480 30,340 272,187 135,720 32,600 40,000 6,400 2,000,000 38,644 18,346,400 440,636 1,147,260 84,970 333,000 1,646,090 2,341,860 10,052 93,120 15,500 765,392 2,729,325 1,092,178 664,717 552,440 50,644 $33,318,703 $33,318,703 City of Smithville Governmental Activities, Government-Wide Level Post-Closing Trial Balance For year 2014 Account Cash Taxes ReceivableDelinquent Estimated Uncollectible Delinquent Taxes Interest and Penalties Receivable on Taxes Estimated Uncollectible Interest and Penalties Due From State Government Accrued Sales Taxes Receivable Interest Receivable on Investments Internal Receivables from BusinessType Activities Inventory of Supplies Investments Land Infrastructure Accumulated DepreciationInfrastructure Buildings Accumulated DepreciationBuildings Equipment Accumulated DepreciationEquipment Construction in Progress Vouchers Payable Due to Federal Government Due to State Government Accrued Interest Payable on Longterm Debt Internal Payables to BusinessType Activities 4% Deferred Payable Serial Bonds Payable Premium on 4% Deferred Serial Bonds Payable Net PositionNet Investment in Capital Assets Net PositionRestricted for Public Safety Net PositionRestricted for Capital Projects Net PositionRestricted for Debt Service Net PositionUnrestricted Totals for all accounts Debits $594,185 $391,756 Credits $70,650 $40,126 $13,190 $165,000 $40,000 $500 $12,000 $66,000 $200,000 $4,180,000 $11,891,300 $2,713,944 $6,296,000 $1,771,000 $3,556,800 $1,765,480 $30,340 $27,464,007 $272,187 $135,720 $32,600 $40,000 $6,400 $2,000,000 $38,644 $17,665,372 $15,000 $410,395 $28,000 $485,425 $27,464,007 City of Smithville Governmental Activities, Government-Wide Level Pre-Closing Trial Balance For year 2014 Account Debits Credits Cash $594,185 Taxes ReceivableDelinquent 391,756 Estimated Uncollectible Delinquent Taxes $70,650 Interest and Penalties Receivable on Taxes 40,126 Estimated Uncollectible Interest and Penalties 13,190 Due From State Government 165,000 Accrued Sales Taxes Receivable 40,000 Interest Receivable on Investments 500 Internal Receivables from BusinessType Activities 12,000 Inventory of Supplies 66,000 Investments 200,000 Land 4,180,000 Infrastructure 11,891,300 Accumulated DepreciationInfrastructure 2,713,944 Buildings 6,296,000 Accumulated DepreciationBuildings 1,771,000 Equipment 3,556,800 Accumulated DepreciationEquipment 1,765,480 Construction in Progress 30,340 Vouchers Payable 272,187 Due to Federal Government 135,720 Due to State Government 32,600 Accrued Interest Payable on Longterm Debt 40,000 Internal Payables to BusinessType Activities 6,400 4% Deferred Payable Serial Bonds Payable 2,000,000 Premium on 4% Deferred Serial Bonds Payable 38,644 Net PositionNet Investment in Capital Assets 18,346,400 Net PositionUnrestricted 440,636 Program RevenuesGeneral GovernmentCharges for Services 1,147,260 Program RevenuesCulture and RecreationCharges for Services 84,970 Program RevenuesPublic SafetyOperating Grants and Contributions 333,000 General RevenuesTaxesReal Property 1,646,090 General RevenuesTaxesSales 2,341,860 General RevenuesInterest and Penalties on Taxes 10,052 General RevenuesMiscellaneous 93,120 General RevenuesInvestment Earnings 15,500 ExpensesGeneral Government 765,392 ExpensesPublic Safety 2,729,325 ExpensesPublic Works 1,092,178 ExpensesHealth and Welfare 664,717 ExpensesCulture and Recreation 552,440 ExpensesInterest on Longterm Debt 50,644 $33,318,703 $33,318,703 Totals for all accounts City of Smithville Governmental Activities, Government-Wide Level Post-Closing Trial Balance For year 2014 Account Debits Credits Cash $594,185 Taxes Receivable - Delinquent 391,756 Estimated Uncollectible Delinquent Taxes $70,650 Interest and Penalties Receivable on Taxes 40,126 Estimated Uncollectible Interest and Penalties 13,190 Due From State Government 165,000 Accured Sales Taxes Receivable 40,000 Interest Receivable on Investments 500 Internal Receivables from Business-Type Activities 12,000 Inventory of Supplies 66,000 Investments 200,000 Land 4,180,000 Infrastructure 11,891,300 Accumulated Depreciation - Infrastructure 2,713,944 Buildings 6,296,000 Accumulated Depreciation - Buildings 1,771,000 Equipment 3,556,800 Accumulated Depreciation - Equipment 1,765,480 Construction in Progress 30,340 Vouchers Payable 272,187 Due to Federal Government 135,720 Due to State Government 32,600 Accrued Interest Payable on Long-term Debt 40,000 Internal Payables to Business-Type Activities 6,400 4% Deferred Serial Bonds Payable 2,000,000 Premium on 4% Deferred Serial Bonds Payable 38,644 Net Position - Net Investment in Captial Assets 17,665,372 Net Position - Restricted for Public Safety 15,000 Net Position - Restricted for Capital Projects 410,395 Net Position - Restricted for Debt Service 28,000 Net Position-Unrestricted 485,425 Totals for all accounts $27,464,007 $27,464,007 City of Smithville Statement of Net Assets December 31, 2014 Primary Government Assets Gov-Act Cash $594,185 Receivables 553,542 Investments 200,000 Internal Balances5,600 Inventories 66,000 Capital Assets 19,704,016 Total Assets 21,123,343 Bus-Act Total $317,500 200,960 (5,600) 4,060 2,043,510 2,560,430 $911,685 754,502 200,000 70,060 21,747,526 23,683,773 Liabilities Accounts and other payables 480,507 114,400 Short-term notes payable 50,000 Noncurrent liabilities 2,038,644 374,000 Total Liabilities 2,519,151 538,400 Compone nt Units (None) 594,907 50,000 2,412,644 3,057,551 Net Position Invested in Capital Assets 17,665,372 1,943,510 Restricted for: Public safety 15,000 Capital Projects 410,395 Debt Service 28,000 Unrestricted 485,425 78,520 Total Net $18,604,192 $2,022,030 Assets 19,608,882 15,000 410,395 28,000 563,945 $20,626,222 Govt-Act Taxes - Delinquent 321,106 Interest and Penalties on Taxes 26,936 Accured Sales40,000 Tax Receivable Due from State Government 165,000 Interest on Investments 500 Receivables 553,542 Bus-Act Accounts Receiable Receivables $200,960 $200,960 Govt-Act Land 4,180,000 Infrastructure 9,177,356 Buildings 4,525,000 Equipment1,791,320 Construction in Progress 30,340 Capital Assets 19,704,016 Bus-Act Land Building Equipment Captial Assets 600,000 858,750 584,760 2,043,510 Govt-Act Vouchers Payable 272,187 Due to Federal Government 135,720 Due to State Government 32,600 Bus-Act Vouchers Payable Due to other fund Accural Payroll Accrued Interest Payable on L/T 40,000 Debt Accounts and480,507 other payables 4% Bonds2,000,000 Payable Premium on 4% Bonds 38,644 Noncurrent2,038,644 Liabilities: Accounts and other payables 45,180 5,600 63,620 114,400 City of Smithville Statement of Activities For the year ended December 31, 2014 Functions/Programs Program Revenues Operating Capital Charges for Grants and Grants and Services Contributio Contribution Expenses ns s Primary Government Governmental Activities: General Government Public Safety Public Works Health & Welfare Parks & Recreation Interest Expense Total Gov-Act $765,392 2,729,325 1,092,178 664,717 552,440 50,644 5,854,696 $1,147,260 84,970 1,232,230 $333,000 333,000 Business-Type Activities: Solid Waste Disposal Fund Total Primary Government 2,216,960 8,071,656 2,265,900 3,498,130 333,000 General Revenues: Taxes: Real Property Sales Interest & Penalties on Taxes Investment Earnings Miscellaneous Total General Revenues Change in net assets Net assets, January 1, 2011 Net assets, December 31, 2011 Change in Net Assets Primary Government Gov-Act $- $381,868 - (2,396,325) - (1,092,178) (664,717) (467,470) (50,644) - (4,289,466) 1,646,090 1,646,090 2,341,860 2,341,860 10,052 10,052 15,500 15,500 93,120 93,120 4,106,622 4,106,622 (182,844) 48,940 (133,904) 18,787,036 1,973,090 20,760,126 $18,604,192 $2,022,030 $20,626,222 BusAct Total - $381,868 - (2,396,325) - (1,092,178) (664,717) (467,470) (50,644) - (4,289,466) 48,940 48,940 (4,289,466) 48,940 (4,240,526) Compo nent Units (None) City of Smithville Balance Sheet Governmental Funds December 31, 2014 Street Improve ment Street Debt Total General Improvem Service Governmen Fund ent Fund Fund tal Funds Assets Cash Taxes receivable-delinquent Interest and penalties receivable Accrued Sales taxes receivable Due from other funds Due to state government Interest receivable on investments Interfund loans on investment Investments Inventory of supplies Total assets Liabilities and Fund Balances Liabilities: Vouchers payable Interfund loans payable Due to federal government Due to state government Total Liabilities $376,290 $169,895 $48,000 $594,185 321,106 321,106 26,936 26,936 40,000 40,000 5,600 5,600 165,000 165,000 500 500 20,000 20,000 200,000 200,000 66,000 66,000 $980,932 $410,395 $48,000 $1,439,327 272,187 20,000 135,720 32,600 440,507 - 20,000 272,187 20,000 135,720 32,600 460,507 Fund Balances: Nonspendableinventory of supplies 66,000 66,000 Restricted for public safety 15,000 15,000 Restricted for capital projects 410,395 410,395 Restricted for debt service 28,000 28,000 Committed for public works 29,700 29,700 Assigned for culture and recreation 56,800 56,800 Unassigned 372,925 372,925 Total Fund Balances 540,425 410,395 28,000 978,820 Total Liabilities and Fund Balances $980,932 $410,395 $48,000 $1,439,327 City of Smithville Statement of Revenues, Expenditures and Changes in Fund Balance Governmental Funds For the year ended December 31, 2014 Street Improve ment Street Debt Total General Improveme Service Governmen Fund nt Fund Fund tal Funds Revenues Taxes - real property $1,646,090 $1,646,090 Taxes - sales 1,886,860 455,000 2,341,860 Interest and penalties on taxes 10,052 10,052 Licenses and permits 583,800 583,800 Fines and forfeits 423,360 423,360 Intergovernmental revenue 333,000 333,000 Charges for services 225,070 225,070 Miscellaneous revenues 93,120 93,120 Interest on investments 15,500 15,500 Accrued interest on bonds sold 28,000 28,000 Total Revenues 5,201,352 470,500 28,000 5,699,852 Expenditures General government 635,419 635,419 Public safety 2,443,313 2,443,313 Public works 875,578 875,578 Health and welfare 624,749 624,749 Culture and recreation 472,944 472,944 Miscellaneous 49,560 49,560 Construction expenditures 2,059,640 2,059,640 Interest expenditures 465 40,000 40,465 Total Expenditures 5,101,563 2,060,105 40,000 7,201,668 Excess of Expenditures over Revenues 99,789 (1,589,605) (12,000) (1,501,816) Other Financing Sources Premium on bonds Proceeds of bonds Total Other Financing Sources Change in fund balances Fund Balances - January 1, 2014 Fund Balances - December 31, 2014 40,000 99,789 440,636 $540,425 40,000 40,000 2,000,000 2,040,000 410,395 28,000 $410,395 $28,000 538,184 440,636 $978,820 2,000,000 2,000,000 City of Smithville Reconciliation of the Governmental Funds Balance Sheet to the Government-Wide Statement of Net Position As of December 31, 2014 Total fund balances Capital asset used on govt-act are not financial resources and therefore not report LT liability are not due in current period and therefore not report Accured interest on bonds payable is not due and therefore not report Net Position of Govt-Act 978,820 19,704,016 (2,038,644) (40,000) $18,604,192 City of Smithville Reconciliation of the Statement of Revenues, Expenditures, and Changes in Fund Balances to the Government-Wide Statement of Activities As of December 31, 2014 Net changes in fund balances - total governmental funds $538,184 Amounts reported for Gov-Act in F/S are different because: Governmental funds report capital outlays as expenditures. Depreciation expense has no effect on balance Bond proceeds increases LT liability of net asset Accrued interest on serial bonds payable Change in net asset 2,087,440 (729,824) (2,038,644) (40,000) ($182,844) City of Smithville Statement of Net Assets Propietary Funds As of December 31, 2014 Bus-Act Enterprise Funds Solid Waste Disposal Assets Current and accrued assets: Cash Customer Accounts Receivable Inventories Total current assets: Noncurrent assets: Land Buildings Equipment Total noncurrent assets: Total Assets Liabilities Current Liabilities: Vouchers Payable Due to Other Funds Accrued Payroll and Fringe Benefits Accrued Interest Payable Revenue Anticipation Notes -Current Total current liabilities Long-term liabilities: Revenue Anticipation Notes - Long Term Accrued Liability-Est. Closure/Post Closure Costs Total Long-term liabilities Total liabilities Net Position Net investment in noncurrent assets Unrestricted Total Net Position $317,500 $200,960 4,060 $522,520 600,000 858,750 584,760 2,043,510 2,566,030 45,180 5,600 66,720 2,500 50,000 170,000 50,000 324,000 374,000 544,000 1,943,510 78,520 2,022,030 Govt-Act Activities Internal Service Funds City of Smithville Statement of Revenues, Expenses, and Changes in Net Assets Proprietary Funds for the Year Ended December 31, 2014 Bus-Act Enterprise Funds Solid Waste Disposal Operating Revenue: Charges for Services Operating Expenses: Payroll and Fringe Benefits Expense Materials and Supplies Expense Depreciation Expense Provision for Closure and Postclosure costs Total Operating Expenses Operating Income Nonoperating Expenses Interest Expense Change in Net Assets Total Net Position, January 1, 2014 Total Net Position, December 31, 2014 $2,265,900 1,162,690 786,480 145,290 120,000 2,214,460 51,440 2,500 48,940 1,973,090 $2,022,030 Govt-Act Internal Service Funds City of Smithville Statement of Cash Flows Proprietary Funds for the Year Ended December 31, 2014 Bus-Act Enterprise FundsGov-Act Internal Solid Waste Dosposal Service Funds Cash Flows from Operating Activities: Cash received from customers $2,190,900 Cash paid to employees (1,182,800) Cash paid for supplies (778,600) Total operating activities 229,500 Cash Flows from Financing Activities: Acquisition of equipment Total Financing activities Decrease in cash and cash equivalents Cash and cash equivalents, January 1, 2014 Cash and cash equivalents, December 31, 2014 Reconciliation of Operating Income: Operating Income Adjustments: Depreciation Expense Increase in Net Accounts Receivable Decrease in Inventories Decrease in Vouchers Payable Increase in Interfund Payables Decrease in Accrued Payroll and Benefits Increase in Accrued Liabilities Net Cash Provided by Operating Activities (200,000) (200,000) 29,500 288,000 317,500 51,440 145,290 (68,600) 980 (5,100) 5,600 (20,110) 120,000 229,500 City of Smithville Statement of Net Position Tax Agency Fund As of December 31, 2014 Assets Taxes reveivable for other funds and governments 1,720,681 Total Assets 1,720,681 Liabilitirs Due to other funds and governments 1,720,681 Instructions City of Smithville Full Version Computerized Cumulative Problem For use with McGraw-Hill/Irwin Accounting for Governmental & Nonprofit Entities 16th Edition By Jacqueline L. Reck, Suzanne L. Lowensohn, and Earl R. Wilson Table of Contents Chapter 1 Introducing City of Smithville Welcome................................................................ 4 System Requirements.....................................................................4 Licensing....................................................................................5 Running or Removing City of Smithville Running the City of Smithville......................................................5 Removing the City of Smithville....................................................5 General Operating Instructions Opening the City of Smithville..................................................6 Creating a new project...............................................................6 Opening an existing project............................................................7 Saving the current project..........................................................7 City of Smithville Main Window Adding and posting journal entries............................................8 Editing/deleting/unposting journal entries.................................8 Working with the ledgers screen...............................................10 Working with the detail journal screen.....................................11 Printing Reports..................................................................................12 Exporting Trial Balances.................................................................13 Completing Chapters 2 through 11 of the City of Smithville Cumulative Problem .................................14 Chapter 2 Opening the Books........................................................15 Chapter 3 Recording the Annual Budget...................................20 Chapter 4 Recording Operating Transactions Affecting the General Fund and Governmental Activities at the Government-wide Level................................................................22 Chapter 5 Recording Capital Asset Transactions...................31 2 Chapter 6 Recording General Long-term Liabilities and Debt Service Transactions............................................................37 Chapter 7 Recording Enterprise Fund and Business-type Activities Transactions......................................43 Chapter 8 Recording Fiduciary Fund Transactions Tax Agency Fund............................................................................46 Chapter 9 Adjusting and Closing Entries for Governmental Activities, Government-wide Level; Preparation of Government-wide and Major Fund Financial Statements.......................................................................50 Chapter 10 Analysis of Financial Condition.............................52 Chapter 11 Preparation of Audit Report...................................52 Appendix A............................................................................................53 3 CHAPTER 1 INTRODUCING CITY OF SMITHVILLE Welcome Thank you for purchasing the City of Smithville Government Accounting Software. This software is designed to be used with the McGraw-Hill/Irwin textbook Accounting for Governmental and Nonprofit Entities, 16th edition. Welcome Thank you for purchasing the City of Smithville/City of Bingham Governmental Accounting Software. This software is designed to be used with the McGrawHill/Irwin textbook Accounting for Governmental and Nonprofit Entities, 16th Edition System Requirements To use the City of Smithville/City of Bingham accounting software application, you must have the following: Operating System: Microsoft Windows 2000 or later Mac OS X v10.4 or 10.5 Linux Red Hat Enterprise Linux (RHEL) 5 Hardware: Windows : Intel Pentium II 450MHz or faster processor (or equivalent) Macintosh: PowerPC G3 500MHz or faster processor; Intel Core Duo 1.33GHz or faster processor Recommended screen resolution of 1024 x 768 minimum 128MB of RAM minimum Spreadsheet program (in order to easily view the exported CSV files) Excel 2003 or later (in order to view the exported Excel files) Internet Explorer 7 or later, Mozilla Firefox 3.x or later, Safari 3.x or later Adobe Flash Player version 10.1 or above Adobe Reader 9 or later to read saved report files Special instruction for MAC and Linux users: Users have to manually open the program.html file that resides in the root folder because start instructor is a .exe file and will run only in Windows environment. 4 Licensing This manual for the full version project was written for use with the City of Smithville/City of Bingham software. The manual and the software described in it are copyrighted, with all rights reserved. This manual and the City of Smithville/City of Bingham software may not be copied, except as otherwise provided in your software license or as expressly permitted in writing by McGraw-Hill Higher Education, Inc. Use of the City of Smithville/City of Bingham governmental accounting software (the \"Software\") and its documentation are governed by the terms set forth in your license. Such use is at your sole risk. The software and its documentation (including this manual) are provided \"AS-IS\" and without warranty of any kind. [Note: Read the following instructions on pages 5-12 before beginning your first assignment. Refer back to this information as needed.] RUNNING OR REMOVING THE CITY OF SMITHVILLE Running the City of Smithville The City of Smithville can be run by clicking on the Smithville_Bingham folder as indicated in the \"Opening the City of Smithville\" instructions below. As the City of Smithville is a web-based application, it need not be installed onto your local computer. However, the software is downloaded as a .zip file, copied to your computer or a removable medium (i.e., CD/DVD, USB flash drive, etc.), unzipped, and run locally on your Web browser. As computers are often configured differently, you may need to change your Adobe Flash Player Security settings in order to run the City of Smithville. For more information and detailed instructions, please see Appendix A. You may exit the program by clicking the "X" button at the top right corner of the browser. However, before closing the browser window you MUST SAVE your work or else all changes will be lost. Removing the City of Smithville You can remove the City of Smithville by deleting the \"Smithville_Bingham\" folder. It is unnecessary to uninstall the software. 5 GENERAL OPERATING INSTRUCTIONS Opening the City of Smithville You can open the City of Smithville at any time by clicking on the Smithville_Bingham_Student (or _Instructor) folder and then clicking on either the Program or Start icon. The application requires that the Web Browser popup blocker be turned off in order to run the application properly. Creating a New Project If you will need the instructions for Smithville Full Version project before creating a new project, click on the appropriate file on the Launch window or on \"Open Instructions in the opening window. Open or print the project instructions file. To create a new project, click on \"Create New Project.\" The Create New Project window will appear, as shown below. Enter your first and last name, then select City of Smithville as your project and click [Create]. The main project window will pop-up once the project is created and you will be ready to begin entering journal entry data for your first assignment. This step creates the accounts and funds that you will need to complete the full version \"City of Smithville\" project. After you have completed the journal entries for each assignment, you should save your project data file in the Projects folder located in the Smithville_Bingham folder that was created when the download file was unzipped. For your own protection against harddrive failure or file corruption, we recommend that you create a dated backup file on a removable disk (CD/DVD/USB Flash Drive) at the end of each session. This 6 will permit you to reopen your project to the current stage of completion should you make serious errors on the next session. Opening an Existing Project After your initial data entry session, click on \"Open Existing Project,\" and then select and open the data file you saved at the end of your first session. Saving the Current Project During or at the end of each assignment, click on and . If a filename has already been specified, the current filename should be displayed in the Save dialog but may be changed if desired. Be sure NOT to exit your browser until you have saved your project file or all changes made during the current session will be lost. 7 City Of Smithville Main Window If you have opened a project file, the main project window should appear as follows: To navigate between the Journal, Account, and Ledgers screens, simply click on the [TAB] for that particular screen. To switch between different funds and governmental activities, government-wide, choose the desired entity from the drop-down menu. You can verify which entity you are working on by the caption on the upper right corner of the window. It will show the title of your project, and the current fund/entity that is open. The main window has the same standard window controls as most other applications. To close down your project, simply click on the [X] box. It is very important, however, that you save your project file before closing the browser. Remember the folder location where you save your file so it will be easier to retrieve it when you want to reopen the file. 8 Adding and Posting Journal Entries If you are looking at the main window, you need to switch to the Journal view before you can add any journal entries. Once you have switched to the Journal view, you will see the journal entry panel on the lower portion of the window. Before ANY entry can be added to the Journal, a transaction description, account #-description, and debit or credit amount must be specified. Once you have filled in the necessary fields, simply click on [Add Entry] to add the entry to the journal. If the entry being made is a closing entry, you must click on the check mark for [Closing Entry]. If one of the fields is missing a value or contains an illegal character, the [Add Entry] button will remain disabled. If you are adding an entry that also affects a detail journal, you must first select an item from the drop-down [Transaction Description] or type your own description in the box before selecting the account and select the corresponding control account from the drop-down [Account (# - Account Description)] menu. If the account selected is a control account, the detail journal will automatically open for entering the transaction detail. Once you have entered a batch of entries into the general journal, you can post them to the general ledger at any time by clicking the [Post Entries] button. In the case of the General Fund, posting transactions also posts entries from the detail journal to the Revenue ledger and Appropriations, Encumbrances, Expenditures ledgers. The [Post Entries] button only posts entries for the fund/entity that is currently open. Editing/Deleting/Unposting Journal Entries To edit entries that have already been entered, double click or right click on the entry, and select edit. You will know you are in edit mode when the entry form turns red and the boxes fill in with the data from the journal. If you wish to delete an entry, right click on the item and select [Delete] or choose [Edit]-[Delete]. 9 As in real-world systems, the software usually does not allow you to edit entries that have already been posted. So, it is recommended that you verify the accuracy of entries before clicking [Post Entries]. However, for your convenience we have added the capability to \"unpost\" individual batches of posted transactions. Simply highlight any entry within the batch you want to unpost and either right click and select [Unpost] or select [Unpost] from the Edit menu. Make all necessary editing changes, then click [Post Entries] and your corrections will be made to the appropriate accounts. If you need to add a missing entry to a previously posted journal entry, then unpost as described above, highlight the line below which a new entry is to be added, and right click and select \"Insert New Entry.\" Screen shot of \"right clicking\" on a journal entry. Enter the data for the new entry and click \"Add Entry\" to insert the new entry. As in prior versions, a provision also allows you to clear all of the transactions from the current fund or entity. Under [File]-[Student Assistance] you will find the option [Wipe out Current Fund or Entity]. The wipe out function should be used as a last resort since making changes by editing is quite easy. Once you select this option, there is no going back. It will remove ALL of the transactions for the current fund or entity. Working with the Ledgers Screen Switch to the Ledgers screen by clicking on the ledgers tab. The screen is shown on the following page. 10 Switch entities at any time by changing the selection. Depending on the fund or entity with which you are working, there may be different ledgers for you to view. Choose the ledger you want to view from the drop-down list. If you want to print out a ledger, you should open the [Reports] menu, and select the report to print. Working with the Detail Journal Screen The General Fund of the City of Smithville uses a Detail Journal to avoid recording operating or budget detail in the general journal/ledgers. If you choose an control account that has subsidiary detail associated with it, you will be taken directly to the Detail Journal. If you attempt to edit a journal entry that has associated subsidiary detail, you will automatically be prompted to also open the Detail Journal for editing, if desired. The Detail Journal screen for the General Fund appears as shown on the following page. 11 The Detail Journal operates very similar to the entry screen on the General Journal. Fill in the boxes or, in the case of the [Transaction Description] box, select a description from the drop-down menu, and click [Add Entry]. The balance of the entries for this transaction is automatically updated. When you exit the Detail Journal the balance will be copied into a single control account amount in the General Journal. Please note that the year and reference numbers of these transactions are based on the originating entry (the line in the General Journal). Printing Reports All of the reports for the City of Smithville are available through the Reports menu. Simply go to the menu and click on the report you want. To print, click on the \"Print\" icon and print in the normal manner. If you need to create a \"Save as Printable PDF File,\" accept the default file name and save location, or change the name and/or location if you prefer. 12 Exporting Trial Balances To make it easier to prepare financial statements/schedules, spreadsheet files for all trial balances for each entity and each year of transactions, as well as detail subsidiary account balances (General Fund only), can be exported to either Excel or CVS for non-Microsoft applications. To export an item, select it from the menu, accept the default file name and folder location, and save it. You can change the file name and/or location if you prefer. 13 Completing Chapters 2 through 11 of the City of Smithville Full Version Foreword This full version of a cumulative problem written for the computer presents a series of transactions covering activities for the City of Smithville, assuming the city utilizes the dual-track accounting approach to the GASB reporting model described in Reck, Lowensohn, and Wilson, Accounting for Governmental and Nonprofit Entities, 16th edition. The transactions presented relate to the city's General Fund, capital projects, debt service, enterprise, and fiduciary funds, as well as to an additional accounting entity, governmental activities at the government-wide level. The transactions and instructions in this series are designated Chapter 2, Chapter 3, etc., corresponding to the chapters of Reck, Lowensohn, and Wilson, Accounting for Governmental and Nonprofit Entities, 16th edition. You should begin the project with Chapter 2 of the instructions as you complete Chapter 2 of the textbook. Some problems require you to print trial balances or other documents. Other problems require the preparation of financial statements or other documents. The specified documents can either be turned in chapter by chapter or retained in a cumulative folder until the end of the project, depending on your instructor's preference and instructions. Some instructors may prefer that you attach your project data file and either Excel or PDF files containing your trial balances, financial statements, and other documents to an e-mail for submission, rather than submitting printed copies. To minimize errors, you should read and follow all instructions carefully. Students find that this computerized cumulative problem significantly enhances their learning if they complete each City of Smithville chapter as the corresponding chapter of the textbook is covered. Conversely, students who procrastinate often find that the project takes much more time than they expected and that it is harder to recall how to make the journal entries covered in the earlier chapters. Thus, delaying until your project is nearly due may increase the total time it takes you to do the project and leave you little time for anything else that week. So, our advice is to stay current with the project. 14 Chapter 2 Opening the Books The City of Smithville has just implemented a new dual-track computerized accounting system, which provides files for general journal entries and posting to appropriate general ledger/subsidiary ledger accounts. Budgetary, operating statement, and balance sheet accounts are provided for the General Fund and the other governmental fund types. Operating statement accounts and balance sheet accounts are also provided for governmental activities at the government-wide level and the proprietary and fiduciary funds used by the City of Smithville that you will use in Chapters 5-9 of the problem. As the city's new accountant (lucky you!), it is your job to enter the city's initial accounting information as of December 31, 2013, and to prepare to place the new accounting system in full operation effective January 1, 2014. Required Open the City of Smithville software by double clicking on the Smithville_Bingham folder and then clicking on either the Program or Start icon. When the Launch Application Page appears, select \"Launch Application.\" If creating a new project, click [Create New Project], when the [Create New Project] window appears choose City of Smithville from the [Choose a City] drop down menu. In addition, in the [Enter your name] box please type in your first and last name so that your name will appear on all printable reports and click [Create]. This will create the project and provide access to all of the funds and accounts that you will need to complete the \"City of Smithville\" cumulative problem. To protect yourself from possible hard drive failure or corruption of your project data file, we recommended that you save your file to a removable storage device (e.g., flash drive), creating a dated backup file for your project at the end of each session. To open an existing project, click on [Open Existing Project] in the opening window. a. If it is not already displayed, select [General Fund] in the [Current Accounting Entity] window and the [Accounts] tab. Verify that the following accounts are listed. (Note: In addition to the accounts listed below you will see detail accounts that will be used in subsequent chapters for achieving budgetary control and recording revenues and expenditures detail.) Select the [Journal] tab and click the drop down menu for [Account (# - Description)]. You should see all of the following general ledger accounts listed (Note: For purposes of this exercise, date suffixes are omitted from the Expenditures and Encumbrances accounts as expenditures from two year's appropriations do not occur in this problem.). Cash Taxes ReceivableCurrent Estimated Uncollectible Current Taxes Taxes ReceivableDelinquent Estimated Uncollectible Delinquent Taxes 15 Interest and Penalties Receivable on Taxes Estimated Uncollectible Interest and Penalties Due from Other Funds Interfund Loans ReceivableCurrent Due from State Government Inventory of Supplies Vouchers Payable Tax Anticipation Notes Payable Due to Other Funds Interfund Loans PayableCurrent Due to Federal Government Due to State Government Fund BalanceNonspendableInventory of Supplies Fund BalanceRestrictedGeneral Government Fund BalanceRestrictedPublic Safety Fund BalanceRestrictedPublic Works Fund BalanceRestrictedHealth and Welfare Fund BalanceRestrictedCulture and Recreation Fund BalanceCommittedGeneral Government Fund BalanceCommittedPublic Safety Fund BalanceCommittedPublic Works Fund BalanceCommittedHealth and Welfare Fund BalanceCommittedCulture and Recreation Fund BalanceAssignedGeneral Government Fund BalanceAssignedPublic Safety Fund BalanceAssignedPublic Works Fund BalanceAssignedHealth and Welfare Fund BalanceAssignedCulture and Recreation Fund BalanceUnassigned Budgetary Fund Balance Encumbrances Outstanding Estimated Revenues Estimated Other Financing Sources Revenues Other Financing SourcesInterfund Transfers In Appropriations Estimated Other Financing Uses Expenditures Other Financing UsesInterfund Transfers Out Encumbrances b. The trial balance for the General Fund of the City of Smithville as of December 31, 2013, is shown on the following page. Select the [Journal] tab and create a journal entry to enter the balance sheet accounts and amounts shown in the trial balance (review software operating procedures in Chapter 1 of these instructions if necessary). Be sure to enter 2013 from the [Year] menu and enter the paragraph 16 number from these instructions in the [Transaction Description] box of the [Journal]. For this entry you should enter 2-b. Select the appropriate accounts individually and insert the appropriate amounts. (Note: Enter all dollar amounts without dollar signs and without commas. All amounts in this project should be rounded to the nearest whole dollar. For all entries, it is vitally important that the correct year be selected.) You must enter each account and amount one line at a time by clicking [Add Entry]. The year and transaction description need only be entered for the first line of the journal entry; it will remain selected for the rest of the accounts. When you have completed entering all account data and amounts, verify your entries, including date and paragraph numbers. When you are sure that your entries are correct, click [Post Entries] to post the items to the general ledger of the General Fund. Unpost capability. As discussed in Chapter 1 of these instructions, the City of Smithville software program permits students to \"unpost\" a particular batch of posted transactions. Unposted entries then can be edited or missing entries can be inserted before re-posting entries. Select [Reports, Trial Balances, Post-Closing Trial Balance] and print the postclosing trial balance for year 2013. Retain the printed trial balance in your personal cumulative folder until the due date assigned by your instructor for the project, or submit the trial balance by e-mail if directed to do so by your instructor. In the latter case you will need to save a PDF print file for later submission. CITY OF SMITHVILLE General Fund Post-Closing Trial Balance As of December 31, 2013 Account Title Cash Taxes ReceivableDelinquent Estimated Uncollectible Delinquent Taxes Interest and Penalties Receivable on Taxes Estimated Uncollectible Interest and Penalties Due from State Government Inventory of Supplies Vouchers Payable Tax Anticipation Notes Payable Due to Federal Government Due to State Government Debits $ 281,410 618,706 Credits $ 36,890 69,380 18,226 500,000 60,000 482,844 375,000 148,600 27,300 17 Fund BalanceNonspendable Inventory of Supplies Fund BalanceCommittedPublic Works Fund BalanceAssignedCulture and Recreation Fund BalanceUnassigned Totals $1,529,496 60,000 72,600 54,850 253,186 $1,529,496 c. Select [Governmental Activities, Government-wide Level] in the [Current Accounting Entity] drop-down box and the [Accounts] tab. You will see most of the accounts included in the preceding trial balance, plus many other accounts that will be used in the various chapters of the City of Smithville project. d. Select the [Journal] tab and create a journal entry to enter the statement of net position, i.e., balance sheet) accounts and amounts shown in the following trial balance. It is necessary to enter these items in the accounts of the governmental activities category at the government-wide level as the general journal and general ledger for governmental activities comprise a separate \"set of books\" from those for the General Fund. Be sure to enter 2013 from the drop-down date menu and enter 2d in the Transaction Description box. Select each account individually and insert the appropriate debit or credit amount for each account. When you have completed entering the initial data, verify its accuracy and click [Post Entries] to post the entry to the governmental activities, government-wide general ledger. Select [Reports, Trial Balances, Post-Closing Trial Balance] and print the trial balance for 2013. You should also save the report file as a .pdf file. Retain in your cumulative file until the due date for your project or the time specified by your instructor. Alternatively, submit the saved trial balance file by e-mail if directed to do so by your instructor. Before closing the City of Smithville, click on [File], and [Save/Save As] to save your work. Your work is NOT automatically saved. CITY OF SMITHVILLE Governmental Activities Government-wide Level Post-Closing Trial Balance As of December 31, 2013 General Ledger Account Title Debits Credits Cash $ 281,410 Taxes ReceivableDelinquent 618,706 Estimated Uncollectible Delinquent Taxes $ 36,890 Interest and Penalties Receivable on Taxes 69,380 18 Estimated Uncollectible Interest and Penalties Due from State Government Inventory of Supplies Land Infrastructure Accumulated DepreciationInfrastructure Buildings Accumulated DepreciationBuildings Equipment Accumulated DepreciationEquipment Vouchers Payable Tax Anticipation Notes Payable Due to Federal Government Due to State Government Net PositionNet Investment in Capital Assets Net PositionUnrestricted Totals 18,226 500,000 60,000 4,180,000 9,862,000 2,595,600 6,296,000 1,583,000 3,529,000 $25,396,496 1,342,000 482,844 375,000 148,600 27,300 18,346,400 440,636 $25,396,496 19 Chapter 3 Recording the Annual Budget The following budget for the General Fund of the City of Smithville was legally adopted for the fiscal year ending December 31, 2014. Estimated Revenues: Taxes: Real Property Sales Interest and Penalties on Taxes Licenses and Permits Fines and Forfeits Intergovernmental Revenue Charges for Services Miscellaneous Revenues Total Estimated Revenues $1,646,000 1,885,000 7,000 588,000 420,000 325,000 230,000 80,000 $5,181,000 Appropriations: General Government Public Safety Public Works Health and Welfare Culture and Recreation Miscellaneous Total Appropriations $ 618,600 2,453,300 920,600 620,200 482,400 50,000 $5,145,100 Required a. After opening the data file you created for Chapter 2 of this project, record the budget in the general journal, providing entries in the Detail Journal when directed. Begin by selecting [General Fund] in the [Current Accounting Entity] drop-down box and the [Journal] tab. In the [Year] box, be sure to select the year 2014. Enter 3-a in the [Transaction Description] box. Select \"Estimated Revenues\" in the drop down [Account (# - Description)] window. This will take you automatically to the Detail Journal where you will enter the detail for each estimated revenue source. In the Detail Journal, select \"Budget Authorization\" from the drop-down menu for [Transaction Description]. When you have finished entering the estimated revenue detail information, verify that the correct total amount is shown in the Detail Journal, then click on [Return to General Journal] and the total estimated revenues will be entered in the general journal Estimated Revenues control account. Follow the same procedure to record the budget detail for Appropriations. Complete the general journal entry by debiting or crediting Budgetary Fund Balance as appropriate to make the journal entry balance. Note that budgetary entries have no effect on governmental activities at the 20 government-wide level and thus the budget information is only recorded in the General Fund. When you are satisfied you have made the entry correctly, post it to the general ledger by clicking on [Post Entries]. Before posting, or after unposting as described previously, you can edit any of your journal entries by placing the cursor in the line you want to edit, then right-clicking and selecting \"Edit.\" After unposting, any entry can be edited or deleted and any omitted entry can be inserted above any highlighted entry. b. Go to [Reports], print the pre-closing subsidiary ledgers and pre-closing trial balance for year 2014 from the \"Reports\" window for retention in your cumulative file until directed by your instructor to submit them, or submit saved versions of these documents by e-mail if directed to do so by your instructor. As of this time, only the budget has been recorded. (Note: To ensure that your saved files are not erased when year-end trial balances or subsidiary ledger account balances are saved in Chapter 4, you should add \"_after Ch3\" to your saved file names. This is your last opportunity to print or export these documents with budget information only. After operating transactions have been journalized and posted in Chapter 4, subsidiary ledgers and trial balances will contain both budgetary and operating accounts and balances.) Before closing the City of Smithville, click on [File], and [Save/Save As] to save your work. Your work is NOT automatically saved. 21 Chapter 4 Recording Operating Transactions Affecting the General Fund and Governmental Activities at the Government-wide Level Presented below are a number of transactions for the City of Smithville that occurred during the fiscal year for which the budget given in Chapter 3 was recorded, the calendar year 2014. Read all instructions carefully. a. After opening the data file containing your data from Chapters 2 and 3 of this project, record the following transactions in the general journal for the General Fund and, if applicable, in the general journal for governmental activities at the government-wide level. For all entries, the date selected should be year 2014. For each of the paragraphs that requires entries in both the General Fund and governmental activities journals, you can either record them in both journals on a paragraph-by-paragraph basis or, alternatively, record all the General Fund journal entries first for all paragraphs, then complete the governmental activities journal entries for all paragraphs next. If you choose the latter method, it might be useful to print the General Fund general journal entries from the Reports menu to assist in making the entries in the governmental activities journal. Regardless of the method you choose, we recommend that you refer to the illustrative journal entries in Chapter 4 of the Reck, Lowensohn, and Wilson textbook (16h edition) for guidance in making all entries. For each entry affecting budgetary accounts or operating statement accounts, the Detail Journal will automatically open, as was the case in Chapter 3, to record the appropriate amounts in the detail budgetary or actual accounts. Please remember that before closing the City of Smithville, you must click on [File], and [Save/Save As] to save your work. Your work is NOT automatically saved. 1. [Para. 4-a-1] On January 2, 2014, real property taxes were levied for the year in the amount of $1,697,000. It was estimated that 3 percent of the levy would be uncollectible. Required: Record this transaction in both the General Fund and governmental activities journal. (Note: Type 4-a-1 as the paragraph number in the [Transaction Description] box for this entry; 4-a-2 for the next transaction, etc. Careful referencing by paragraph number is very helpful should you need to determine where you may have omitted a required journal entry or made an error.) (Select \"Accrued Revenue\" in the drop down [Transaction Description] menu in the Detail Journal related to the General Fund entry.) 2. [Para. 4-a-2] Encumbrances were recorded in the following amounts for purchase orders issued against the appropriations indicated: 22 General Government Public Safety Public Works Health and Welfare Culture and Recreation Miscellaneous Total $ 98,453 185,259 247,675 173,469 108,927 41,563 $855,346 Required: Record the encumbrances in the General Fund general journal and Detail Journal as appropriate. In the Detail Journal, select \"Purchase Orders\" from the drop down [Transaction Description] menu. You can also type in an alternative description, if desired. 3. [Para. 4-a-3] Cash was received during the year in the total amount of $5,821,280 for collections from the following receivables and cash revenues, as indicated: Current Property Taxes Delinquent Property Taxes Interest and Penalties Receivable on Taxes Due from State Government Revenues: (total: $3,380,210) Sales Taxes Licenses and Permits Fines and Forfeits Intergovernmental Charges for Services Miscellaneous Total $1,546,800 360,000 34,270 500,000 1,886,860 583,800 423,360 168,000 225,070 93,120 $5,821,280 Required: Record the receipt of cash and the related credits to receivables and revenues accounts, as applicable, in both the General Fund and governmental activities journals. (Select \"Received in Cash\" in the drop down [Transaction Description] menu in the Detail Journal related to the General Fund revenue entries.) For purposes of the governmental activities entries at the government-wide level assume the following classifications: General Fund Sales Taxes Licenses and Permits Fines and Forfeits Governmental Activities General RevenuesTaxesSales Program RevenuesGeneral Government Charges for Services Program RevenuesGeneral Government Charges for Services 23 Intergovernmental Charges for Services Miscellaneous Program RevenuesPublic SafetyOperating Grants and Contributions Program RevenuesGeneral Government Charges for Services, $140,100 Program RevenuesCulture and Recreation Charges for Services, $84,970 General RevenuesMiscellaneous 4. [Para. 4-a-4] Additional interest and penalties were accrued on delinquent property taxes in the amount of $2,836, of which 10 percent was estimated to be uncollectible. (Note: Round the estimated uncollectible to the nearest whole dollar.) Required: Record this accrual in both the General Fund and governmental activities general journals. 5. [Para. 4-a-5] General Fund payrolls for the year totaled $3,822,600. Of that amount, $472,040 was withheld for employees' federal income taxes; $291,740 for employees' share of FICA taxes; $171,610 for employees' state income taxes; and the remaining $2,887,210 was paid to employees in cash. The City of Smithville does not record encumbrances for payrolls. The payrolls were chargeable against the following functions' appropriations: General Government Public Safety Public Works Health and Welfare Culture and Recreation Total $ 476,376 2,013,110 612,881 397,673 322,560 $3,822,600 Required: Make summary journal entries for payroll in both the General Fund and governmental activities general journals for the year. 6. [Para. 4-a-6] The city's share of FICA taxes, $291,740, and the city's contribution of $195,380 to retirement funds administered by the state government were recorded as liabilities. Required: Record this transaction in both the General Fund and governmental activities general journals. Assume that the total $487,120 should be allocated in the same proportions as in paragraph 4-a-5 above; that is: General Government: ($476,376/$3,822,600) x $487,120 = $60,705 Public Safety: ($2,013,110/$3,822,600) x $487,120 = $256,534 Public Works: ($612,881/$3,822,600) x $487,120 = $78,101 Health and Welfare: ($397,673/$3,822,600) x $487,120 = $50,676 Culture and Recreation: ($322,560/$3,822,600) x $487,120 = $41,104 24 (Note: The allocated amount for Public Works was rounded up on