P6-7 (General and Subsidiary Ledger Entries; Reconciliation)

The City of Beverly Heights General Fund had the following transactions, among others, in 20X7:

Appropriations were made as follows:

Personal Services

$111,400

Contractual Services

8,700

Materials and Supplies

8,500

New Patrol Cars

21,000

Other

12,000

$161,600

General Fund cash, $2,000, was paid to a Debt Service Fund to provide for debt service.

A long-term note of $8,300, including interest of $1,300, and a short-term note of $2,500 (including $150 interest) came due. The Beverly Heights Council had not made appropriations for these items. The necessary action was taken, and the notes and interest were paid.

General Fund cash, $100,000, was paid to an Enterprise Fund to finance construction of a new auxiliary generator, and $50,000 was contributed to establish a central motor pool facility. The Enterprise Fund will repay the General Fund in 10 equal annual installments beginning January 1, 20X9.

The council increased the appropriation for personal services by $500.

Materials and supplies are accounted for on the purchases method. The beginning inventory was $200; $8,500 of materials and supplies were ordered during the year. A new patrol car costing $20,000 was also ordered.

The following expenditures were made by the city:

Personal Services

$111,700

Contractual Services

8,700

Materials and Supplies (Estimated to cost $7,600)

7,500

New Patrol Cars

21,200

Other

11,800

$160,900

The new patrol cars were received. The balance of the materials order is expected early next year. The council passed amendments to its appropriations necessary to make the foregoing expenditures legal. The expenditures were paid.

Materials and supplies on hand at year end amounted to $1,000.

Required

Prepare the general journal entries required to record the transactions in the General Ledger and in the Expenditures Ledger of the Beverly Heights General Fund. Assume that there were no outstanding encumbrances at the end of 20X6.

Prepare a trial balance of the Expenditures Ledger and prove its agreement with the General Ledger control accounts.

(Allison 256)

Allison, Gregory S. Governmental and Nonprofit Accounting, 10th Edition.

6-7 a

JE Number

Account

Debit

Credit

1

Fund Balance

161,600.00

1

Appropriations

161,600.00

2

*3a

8,450.00

3

*3b

Notes Payable

2,350.00

3

4a

4b

Advance To Enterprise Fund

5

5

6

6

7a

7

7b

8

7

9a

Other Financing Sources - Increase in Materials and Supplies Inventory

9b

Fund Balance

Reserved for Materials & Supplies Inventory

Appropriations Ledger

1

Personal Services

Contractual services

Material & Supplies

New Patrol Cars

Other

Total

-

Appropriations Ledger

3

Debt service - Principal

Debt Service - Interest

Total

-

Expenditures Ledger

3

Debt service - Principal

Debt Service - Interest

Total

-

5

Appropriations Ledger

Personal Services

Total

-

6

Encumbrances Ledger

Materials & Supplies

Patrol Cars

Total

-

7

Encumbrances Ledger

Materials & Supplies

Patrol Cars

Total

-

7

Expenditures Ledger

Personal Services

Contractual services

Material & Supplies

New Patrol Cars

Other

Total

-

8

Appropriations Ledger

New Patrol Cars

Total

-

*Short term notes need not be appropriated due to the nature of how they are created. Since they funds to repay them will be authorized during the bond issuance, they do not need to be appropriated through the annual budget. Rather, they are authorized through a separate process.

6-7b

Accounts

Encumbrances

Expenditures

Appropriations

Balance

Personal Services

111,400.00

111,400.00

500.00

111,900.00

111,700.00

200.00

Contractual Services

-

-

Materials & Supplies

-

-

-

New Patrol Cars

-

-

-

-

Other

-

-

Debt Service - Principal

-

-

Debt Service - Interest

-

-

TOTALS

$-

$111,700.00

$111,900.00

$200.00

GENERAL LEDGER ACCOUNTS

DEBITS

CREDITS

Encumbrances

28,500.00

28,500.00

27,600.00

900.00

Expenditures

-

-

Appropriations

-

-

-

-

The cells matched by the arrows should match (900, 169,350, and 170,750 respectively)

Fill in the yellow cells only (where appropriate). The other cells will calculate an answer for you. The first one is done for you.

Accounts are to be named as:

Advance To Enterprise Fund

Allowance for Uncollectible Current Taxes

Amusements Licenses

Appropriations

Business Licenses

Cash

Charges for Services

Contractual Services

Debt Service - Interest

Debt Service - Principal

Due From State

Encumbrances

Encumbrances Outstanding

Estimated Revenues

Expenditures

Expenditures - Debt Service - Interest

Expenditures - Debt Service - Principal

Fund Balance

Materials & Supplies

New Patrol Cars

Notes Payable

Other

Other Financing Sources

Other Financing Sources - Increase in Materials and Supplies Inventory

Other Revenues

Parking Meters

Personal Services

Property Taxes

Reserved for Advance to Enterprise Fund

Reserved for Materials & Supplies Inventory

Revenues

Tax Receivable - Current

Transfer from Enterprise Fund

Transfer to Debt Service

Transfer to Internal Service Fund

Vouchers Payable