Question 1

Winter County enacted a law establishing a Highway Special Revenue Fund, effective January 1, 2020. The fund expenditures were to be financed by a special gasoline tax. Prepare journal entries to record the following transactions for the calendar year 2020. Then prepare a preclosing trial balance as of December 31,2020. a. Winter County adopted the following budget for the fund:

Estimated revenuesgasoline taxes	855,000
Appropriationsmaintenance salaries	745,000
Appropriationsmaintenance supplies	90,000
Budgeted increase in fund balance	20,000

b. The county collected gasoline taxes of $825,000.

c. The county paid maintenance salaries of $730,000.

d. The county placed purchase orders for maintenance supplies totaling $65,000.

e. The maintenance supplies ordered in d., above, were received and accepted. Because the purchase orders allowed for additional quantities to be shipped, the invoices totaled $68,000.

f. Because of the shortfall in gasoline tax collections, the county reduced estimated revenues by $30,000. It also ordered a halt to all purchases of maintenance supplies and reduced the appropriation for maintenance supplies by $20,000.

g. Unpaid salaries for the last few days in December (to be paid in January 2021) totaled $14,000.

Question 2

Use the preclosing trial balance prepared for Question 1 above, regarding Winter County, to close the accounts for the year ended December 31, 2020.

Question 3

The following data comes from the 2020 financial statements of the Village of Matthews. Although presented in summarized format, the balance sheet debits and credits are equal and the operating statement information is complete.

General Fund - Balance Sheet Elements
Cash	$1,200,000
Short-term Investments	405,000
Property taxes receivable - delinquent	282,000
Due from other funds	58,000
Accounts payable and other accrued liabilities	920,000
Assigned fund balance	90,000
Unassigned fund balance	935,000
General Fund - Operating Statement Elements
Revenues, including property taxes of $6,125,000	$8,350,000
Expenditures (total)	7,510,000
Transfer out to Debt Service Fund	400,000
Excess of revenues and other sources over expenditures and other uses	440,000
Debt Service Fund - Balance Sheet Elements
Cash and cash equivalents	230,000
Restricted fund balance	230,000
Debt Service Fund - Operating Statement Elements
Debt service expenditures:
Principal	100,000
Interest	200,000
Operating transfer from General Fund	400,000
Excess of revenues and other sources over expenditures and other uses	100,000

Calculate the following ratios for the Village of Matthews:

1. Number of days cash on hand - General Fund
2. Quick ratio - General Fund
3. Property tax receivable delinquency rate
4. Budgetary cushion for the General Fund (Assume all assigned fund balance is available.)
5. Debt service burden
6. Excess of revenues and other sources over expenditures and other uses, as a percentage of revenues - Combined, General Fund and Debt Service Fund (Hint: The transfers out and in cancel each other. Therefore, use the revenues for the denominator.)
7. Assess the liquidity of the Village of Matthews, based on the standard that the General Funds number of days cash on hand should be no less than 45 (and that 60 is more desirable) and that the quick ratio should be at least 1.

Question 4

Following is a trial balance (in thousands) showing the accounts of Beta Hospital at December 31, 2019. Using the information from the trial balance, answer the following questions. Show the calculations used.

1. What is number of days cash on hand?
2. What is the number of days of revenue in net patient accounts receivable?
3. How much is the excess of revenues over expenses?
4. What is the operating margin?
5. What is the long-term debt-to-equity ratio at year-end?
6. What is the interest coverage (times interest earned)?

	Debits	Credits
Cash	$5,000
Patient accounts receivable	8,000
Allowance for bad debts		$1,000
Food and medicines inventory	2,000
Buildings	40,000
Accumulated depreciation, buildings		8,000
Equipment	20,000
Accumulated depreciation, equipment		10,000
Land	5,000
Accounts payable		6,000
Accrued interest payable		200
Current portion of bonds payable		1,500
Long-term bonds payable		34,000
Net position, January 1, 2019		17,300
Patient service revenues (net)		36,000
Patient care expense	20,000
Dietary expense	2,000
General and administrative expense	6,000
Bad debts expense	1,000
Depreciation, buildings and equipment	4,000
Interest expense	1,000
Totals	$114,000	$114,000