Rapid City
General Fund Postclosing Trial Balance
December 31, 2014
	Debits		Credits
Cash	$ 275,000
Property Taxes Receivable - Delinquent	40,000
Due from State Government	85,000
Supplies and Materials	15,000
Salaries Payable			$ 20,000
Deferred Revenues - Property Taxes			20,000
Nonspendable Fund Balance			30,000
Assigned Fund Balance			15,000
Unassigned Fund Balance			330,000
	$ 415,000		$ 415,000

Additional information:

1. Only items charged to the appropriation Supplies and materials other programs are encumbered. Encumbrances lapse if they are outstanding at the close of a fiscal year. They are, however, included in the following years appropriation. Outstanding encumbrances at the end of 2014 are reported as Assigned Fund Balance.

2. The appropriation Other program costs covers vacation pay, pension, and retiree health care benefits, and all other program expenditures.

3. The city uses the purchases method to record the acquisition of supplies. The year-end supplies inventory is considered to be material and is reported in the citys financial statements.

4. The citys accounting policy regarding income taxes is to recognize income taxes as revenue of the tax year provided they are expected to be received by April 15 of the following year, the due date for filing tax returns.

5. The city maintains tight controls over licensing fees and fines from its inspection program and considers them susceptible to accrual.

Rapid City
Capital Projects Fund Postclosing Trial Balance
December 31, 2014
	Debits		Credits
Cash	$5,600,000
Due from State Government	300,000
Fund Balance Restricted			$5,900,000
	$5,900,000		$5,900,000

Additional Information:

1. Rapid City sold bonds in the amount of $5,600,000 in December 2014 to finance a new city park. The bonds are payable semiannually (June 1 and December 1) over 20 years at 4% per year.

2. In 2014, the State approved a grant for $300,000 to help fund the city park. The grant is collectible within 60 days after year end. The Federal government also approved a grant for $750,000, receivable June 1, 2015.

3. Rapid City uses encumbrance accounting in the Capital Projects Fund.

4. Construction of the park is expected to be completed by the end of 2015. Any amounts remaining in the Capital Projects Fund must be transferred to the Debt Service Fund on completion of the park.

Rapid City
Debt Service Fund Postclosing Trial Balance
December 31, 2014
	Debits		Credits
Cash	$140,000
Fund Balance Restricted			$140,000
	$140,000		$140,000

Additional Information:

1. In December, $140,000 was transferred to the Debt Service Fund from the General Fund to pay the first principal payment on the bonds issued in the Capital Projects Fund.

Requirements:

Prepare the following journal entries 1-45 for Rapid city for fiscal year 2015 Remember to prepare the journal entries in the appropriate funds.

Transactions and events occurred during fiscal 2015:

1) The city council of Rapid City approved the following budgets for fiscal 2015:

General Fund:

Estimated Revenues:

Property taxes= 3,406,000

Income Taxes= 2,174,000

Intergovernmental Grants= (40%*(2,174,000-300,000))= 749,6000

Licensing Fees & Fines= 160,000

Total Estimated Revenues:= 6,489,600

Food Inspection Program = (2,174,000-300,000)= 1,874,000

Salaries Other Programs = (3,406,000 -200,000)= 3,206,000

Supplies & Materials Other programs = (340,000-50,000)= 290,000

Other Program Costs= 650,000

Transfer to Debt Service Fund= 140,000

Total Appropriations= 6,160,000

Budgeted Change in Fund Balance= 329,000

Capital Projects Fund:

Estimated Revenues:

Intergovernmental Grants = 750,000

Investment Income = 120,000

Total Estimated Revenues: = 870,00

Park Construction = 5,800,000

Park Equipment = 850,000

Transfer to Debt Service Fund = 120,000

Total Appropriations = 6,770,000

Budgeted Change in Fund Balance = (5,900,000)

Debt Service Fund:

Estimated Revenues:

Special Property Tax Assessment = 360,000

Investment Income = 5,000

Total Estimated Revenues = 365,000

Estimated Other Financing sources:

Transfer in from General Fund = 140,000

Transfer in from Capital Projects Fund = 120,000

Total Estimated Other Financing sources = 260,000

Appropriations:

Interest = 225,000

Principle = 280,000

Total Appropriations = (505,000)

Budgeted Change in Fund Balance = 120,000

2) Open encumbrances in the General Fund at the end of 2014 were restored.

3) All delinquent property taxes outstanding at the end of 2014 in the General Fund were collected between January and May of 2015, together with late payment penalties of $2,000. Deferred property tax revenue is now recognized.

4) The state paid all of the amounts owed to the city as of December 31, 2014.

5) The Capital Projects Fund invested the bonds issued in December 2014 in a 6-month CD bearing interest at 4.25% per annum.

6) The city received an advance of 80% of the budgeted intergovernmental grant in the General Fund from the state for the food inspection program. The grant is subject to the following requirements: (a) the state will reimburse the city for 50% of all expenditures paid by the city on the food inspection program, up to the maximum amount of the grant (budgeted amount in General Fund); and (b) the city must file a claim for the balance due to the city by no later than December 31, 2015.

7) The city levied property taxes in the amount of $3,406,000 and established an allowance for uncollectible taxes and discounts equal to 5% of the taxes levied.

8) Along with the previous levied property taxes, the city levied the special property tax assessment to service the bond issue for the new city park. The city levied $380,000 in anticipation of realizing net cash of $360,000, establishing a $20,000 allowance for uncollectible taxes and discounts.

9) In addition to the item recorded in transaction 2, purchase orders for supplies and materials were placed in the amount of $(340,000 + 10,000).

10) The city entered into two construction contracts for the new city park: (a) Hillside Construction Co. for $5,100,000 and (b) Palmer Engineering for $550,000.

11) The city collected 95% of the property taxes levied in 2015. The city reduced property tax bills by $(2% of $3,406,000) based on taxpayer appeals of property value assessments, and taxpayers deducted $(1% of $3,406,000) in discounts for early payment of bills.

12) The city reduced the special assessment tax bills by $8,300 based on taxpayer appeals, and taxpayers deducted $3,200 in discounts for early payment of bills. As a result, the citys net collection of special assessment taxes in 2015 against the 2015 tax levy was $353,500.

13) All remaining unpaid property taxes were declared delinquent. The city comptroller concluded that an allowance for uncollectible taxes for property taxes should be 5% of the delinquent property taxes. He believes that 60% of the delinquent taxes will be collected in the first 60 days of 2016. (Thus 35% of the delinquent taxes are considered deferred until 2016 fiscal year.)

14) All remaining unpaid special assessment taxes were declared delinquent. The city comptroller concluded that no allowance for uncollectible taxes is necessary for the special assessment taxes. He believes that all of the delinquent special assessment taxes will be collected in the first 60 days of 2016.

15) The city approved encumbrances of $580,000 for Other program costs.

16) The General Fund transferred the $140,000 to the Debt Service Fund for principle payment on the Capital Project Fund bonds.

17) The city paid 65% of the budgeted amount to operate the food inspection program.

18) The city received $700,000 of the federal grant for the construction of the new city park. Based on the provisions of the grant, the city recognized the amount received as revenue. The grant stipulated that the park must be completed by the end of the fiscal year in order to receive the remaining $50,000 pledged to the project.

19) The Debt Service Fund paid the first installment payment plus interest on the bonds issued for the new city park.

20) The CD in the Capital Projects Fund matured and the city received the principle and interest from the CD.

21) The city vouchered $560,000 related to the encumbered Other Program Costs. (Journal entry #15)

22) During 2015, the city collected 96% of the budgeted amount ($2,174,000) in personal income taxes as a result of withholdings by employers and payments made by taxpayers based on estimates for calendar year 2014.

23) In June, the comptroller estimated that, based on past experience, it is likely that taxpayers who filed timely (that is, by April 15) will request refunds of $(4% of $2,174,000) and will make payments of $(6% of $2,174,000) with their returns. The comptroller also estimated that about $65,000 of additional taxes probably will be received after year end and not within the first 60 days of 2016 from late filers of tax returns.

24) Hillside Construction completed 70% of the work on the park and submitted an invoice for $3,570,000. Palmer Engineering also completed 80% of their work and submitted an invoice for $440,000.

25) The city billed a total of $185,000 in licensing fees and inspection fines (through violation notices). It collected $175,000 cash during the year and expects to collect the rest during the first 60 days of 2016.

26) The city received and vouchered for payment invoices totaling 85% of the amount in journal entry #9 against encumbrances totaling 90% of the amount in journal entry #9 related to Supplies and Materials Other Programs.

27) The city canceled encumbrances totaling 3.5% of the amount in journal entry #9 related to Supplies and Materials Other Programs.

28) The city ordered park equipment in the amount of $800,000 for the new city park.

29) The city paid the previously vouchered invoices related to the Other Program Costs. (journal entry #21)

30) Salaries of 95% of the budgeted salaries were paid during the year. Of this amount, $20,000 reduced the Salaries Payable recorded at December 31, 2014 and the

31)The park equipment ordered in journal entry #28 was received in the amount of $825,000. The city vouchered the invoice.

32) The city paid 30% of the budgeted amount for the food inspection program.

33) The city filed a claim for the balance due from the state for the food inspection program and recognized the revenue from the grant since the program expenditures were now paid. (See journal entries #6, #17, and #32)

34) The retirement system actuary advised the city that the increase in liability for retiree health care benefits as a result of employees who worked in 2015 was $100,000. The citys policy, however, is to finance only the health care benefits of its retirees. For the year, those expenditures were $70,000, of which $60,000 was paid during the year, and the rest will be paid in January 2016. These expenditures relate to Other Program Costs.

35) The city paid for the vouchered supplies and materials received earlier (journal entry #26).

36) The new city park was completed on time, but a little over budget. The federal government was billed for the remaining $50,000 grant, which is expected to be collected in the first 60 days of fiscal 2016.

37) The city received the final invoices for the construction of the city park: (a) Hillside Construction for $1,550,000 and (b) Palmer Engineering for $120,000.

38) The city paid Hillside Construction and Palmer Engineering previously vouchered for the park construction. (Journal entries #24 and #37)

39) The city paid for the vouchered park equipment. (Journal entry #31)

40) The remaining project funds in the Capital Project Fund were transferred to the Debt Service Fund.

41) The Debt Service Fund paid the second installment payment plus interest on the bonds issued for the new city park.

42) The year-end inventory of supplies and materials totaled 3% of the budgeted amount for Supplies and Materials Other Programs.

43) Encumbrances of $8,000 related to Supplies and Materials Other Programs remain open at year-end. The appropriation lapses, but the purchase orders will be honored against 2016s appropriation.

44) At year-end, salaries owed to employees for the last week in December totaled $25,000. They will be paid with the first payroll in 2016.

45) Analysis of vacation leave records showed that the total liability to employees for unused vacation days increased by $25,000 as a result of the years activity. The total liability included $10,000 due to employees who retired December 31; they will receive that amount in January 2016. These expenditures relate to Other Program Costs.