Question
[The following information applies to the questions displayed below.] The City of Lynnwood was recently incorporated and had the following transactions for the fiscal year
[The following information applies to the questions displayed below.]
The City of Lynnwood was recently incorporated and had the following transactions for the fiscal year ended December 31.
- The city council adopted a General Fund budget for the fiscal year. Revenues were estimated at $2,060,000 and appropriations were $1,996,000.
- Property taxes in the amount of $2,000,000 were levied. It is estimated that $12,000 of the taxes levied will be uncollectible.
- A General Fund transfer of $28,000 in cash and $306,000 in equipment (with accumulated depreciation of $71,000) was made to establish a central duplicating internal service fund.
- A citizen of Lynnwood donated marketable securities with a fair value of $860,000. The donated resources are to be maintained in perpetuity with the city using the revenue generated by the donation to finance an after-school program for children, which is sponsored by the culture and recreation function. Revenue earned and received as of December 31 was $46,000.
- The citys utility fund billed the citys General Fund $131,000 for water and sewage services. As of December 31, the General Fund had paid $130,000 of the amount billed.
- The central duplicating fund purchased $7,500 in supplies.
- Cash collections recorded by the general government function during the year were as follows:
Property taxes | $ | 1,931,000 | |
Licenses and permits | 41,000 | ||
User charges | 31,000 | ||
- During the year, the internal service fund billed the citys general government function $18,700 for duplicating services and it billed the citys utility fund $11,100 for services.
- The city council decided to build a city hall at an estimated cost of $5,060,000. To finance the construction, 6 percent bonds were sold at the face value of $5,060,000. A contract for $4,560,000 has been signed for the project; however, no expenditures have been incurred as of December 31.
- The general government function issued a purchase order for $35,000 for computer equipment. When the equipment was received, a voucher for $32,500 was approved for payment and payment was made.
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[The following information applies to the questions displayed below.]
The City of Lynnwood was recently incorporated and had the following transactions for the fiscal year ended December 31.
- The city council adopted a General Fund budget for the fiscal year. Revenues were estimated at $2,000,000 and appropriations were $1,990,000.
- Property taxes in the amount of $1,940,000 were levied. It is estimated that $9,000 of the taxes levied will be uncollectible.
- A General Fund transfer of $25,000 in cash and $300,000 in equipment (with accumulated depreciation of $65,000) was made to establish a central duplicating internal service fund.
- A citizen of Lynnwood donated marketable securities with a fair value of $800,000. The donated resources are to be maintained in perpetuity with the city using the revenue generated by the donation to finance an after-school program for children, which is sponsored by the culture and recreation function. Revenue earned and received as of December 31 was $40,000.
- The citys utility fund billed the citys General Fund $125,000 for water and sewage services. As of December 31, the General Fund had paid $124,000 of the amount billed.
- The central duplicating fund purchased $4,500 in supplies.
- Cash collections recorded by the general government function during the year were as follows:
Property taxes | $ | 1,925,000 | |
Licenses and permits | 35,000 | ||
User charges | 28,000 | ||
8. During the year, the internal service fund billed the citys general government function $15,700 for duplicating services and it billed the citys utility fund $8,100 for services.
9. The city council decided to build a city hall at an estimated cost of $5,000,000. To finance the construction, 6 percent bonds were sold at the face value of $5,000,000. A contract for $4,500,000 has been signed for the project; however, no expenditures have been incurred as of December 31.
10. The general government function issued a purchase order for $32,000 for computer equipment. When the equipment was received, a voucher for $31,900 was approved for payment and payment was made.
Required a. For each transaction number, identify all of the fund and/or government-wide activity journals in which journal entries must be made. (Select all that apply.) 5. The city's utility fund billed the city's General Fund $131,000 for water and sewage services. As of December 31 , the General Fund had paid $130,000 of the amount billed. \begin{tabular}{|c|c|c|c|c|} \hline 5a & Enterprise fund & \multicolumn{3}{|l|}{ Record the $131,000 services received for water and sewage in the enterprise fund. } \\ \hline & & Due from Other Funds & 131,000 & \\ \hline & & Charges for Services & & 131,000 \\ \hline \multirow[t]{3}{*}{5b} & & \multicolumn{3}{|l|}{ Record the $130,000 received from the general fund in the enterprise fund. } \\ \hline & & Cash & 130,000 & \\ \hline & & Due from Other Funds & & 130,000 \\ \hline \multirow[t]{3}{*}{5c} & General Fund & \multicolumn{3}{|l|}{ Record the $131,000 services received for water and sewage in the general fund. } \\ \hline & & Expenditures & 131,000 & \\ \hline & & Due to Other Funds & & 131,000 \\ \hline \multirow[t]{3}{*}{5d} & & \multicolumn{3}{|l|}{ Record the $130,000 payment made to the enterprise fund in the general fund. } \\ \hline & & Due to Other Funds & 130,000 & \\ \hline & & Cash & & 130,000 \\ \hline \multirow[t]{3}{*}{5e} & \begin{tabular}{l} Governmental \\ Activity \end{tabular} & \multicolumn{3}{|c|}{ Record the $131,000 services received for water and sewage in the Governmental Activities general ledger. } \\ \hline & & Expenses-General Government & 131,000 & \\ \hline & & Internal Balances & & 131,000 \\ \hline \multirow[t]{3}{*}{5f} & & \multicolumn{3}{|l|}{ Record the $130,000 received from the general fund in the Governmental Activities general ledger. } \\ \hline & & Internal Balances & 130,000 & \\ \hline & & Cash & & 130,000 \\ \hline \multicolumn{5}{|c|}{ 6. The central duplicating fund purchased $7,500 in supplies. } \\ \hline \multirow[t]{3}{*}{6a} & \begin{tabular}{l} Internal service \\ fund \end{tabular} & \multicolumn{3}{|l|}{ Record the $7,500 purchase of supplies in the internal service fund. } \\ \hline & & Inventory of Supplies & 7,500 & \\ \hline & & Cash & & 7,500 \\ \hline \multirow[t]{3}{*}{6b} & \begin{tabular}{l} Governmental \\ Activity \end{tabular} & \multicolumn{3}{|l|}{ Record the $7,500 purchase of supplies in the Governmental Activities general ledger. } \\ \hline & & Inventory of Supplies & 7,500 & \\ \hline & & Cash & & 7,500 \\ \hline \multicolumn{5}{|c|}{\begin{tabular}{l} 7. Cash collections recorded by the general government function during the year were as follows: property taxes, $1,931,000; licenses and permits, $41,000; \\ user charges, $31,000. \end{tabular}} \\ \hline \multirow[t]{4}{*}{7a} & General Fund & \multicolumn{3}{|c|}{\begin{tabular}{l} Record the cash collections of $1,931,000 for property taxes; $41,000 for licenses and permits; $31,000 for user \\ charges in the general fund. \end{tabular}} \\ \hline & & Cash & 2,003,000 & \\ \hline & & Taxes Receivable-Current & & 1,931,000 \\ \hline & & Revenues & & 72,000 \\ \hline \multirow[t]{4}{*}{7b} & \begin{tabular}{l} Governmental \\ Activity \end{tabular} & \multicolumn{3}{|c|}{\begin{tabular}{l} Record the cash collections of $1,931,000 for property taxes; $41,000 for licenses and permits; $31,000 for user \\ charges in the Governmental Activities general ledger. \end{tabular}} \\ \hline & & Cash & 2,003,000 & \\ \hline & & Taxes Receivable-Current & & 1,931,000 \\ \hline & & Program Revenue-General Government-Charges for Services & & 72,000 \\ \hline \end{tabular} 8. During the year, the internal service fund billed the city's general government function $18,700 for duplicating services and it billed the city's utility fund $11,100 for services. \begin{tabular}{|c|c|c|c|c|} \hline \multirow[t]{2}{*}{8a} & \multirow[t]{2}{*}{\begin{tabular}{l} Internal service \\ fund \end{tabular}} & \multicolumn{3}{|l|}{ Record the $18,700 duplicating services and $11,100 services billed by the internal service fund. } \\ \hline & & Due from Other Funds & 29,800 & \\ \hline & & Billings to departments & & 29,800 \\ \hline \multirow[t]{3}{*}{8b} & Enterprise fund & \multicolumn{3}{|l|}{ Record the 11,100 services billed by the internal service fund in the enterprise fund. } \\ \hline & & Expenses-Administrative & 11,100 & \\ \hline & & Due to Other Funds & & 11,1000 \\ \hline \multirow[t]{3}{*}{8c} & General Fund & \multicolumn{3}{|l|}{ Record the $18,700 duplicating services by the internal service fund in the general fund. } \\ \hline & & Expenditures & 18,700 & \\ \hline & & Due to Other Funds & & 18,7000 \\ \hline \multirow[t]{3}{*}{8d} & \begin{tabular}{l} Governmental \\ Activity \end{tabular} & \multicolumn{3}{|c|}{ Record the 11,100 services billed by the internal service fund in the Governmental Activities general ledger. } \\ \hline & & Internal Balances & 11,100 & \\ \hline & & Program Revenue-General Government-Charges for Services & & 11,100 \\ \hline \multicolumn{5}{|c|}{\begin{tabular}{l} 9. The city council decided to build a city hall at an estimated cost of $5,060,000. To finance the construction, 6 percent bonds were sold at the face value of \\ $5,060,000. A contract for $4,560,000 has been signed for the project; however, no expenditures have been incurred as of December 31 . \end{tabular}} \\ \hline \multirow[t]{3}{*}{8a} & \begin{tabular}{l} Capital projects \\ fund \end{tabular} & \multicolumn{3}{|l|}{ Record the issue of 6% bonds with a face value of $5,060,000 in capital projects fund. } \\ \hline & & Cash & 5,060,000 & \\ \hline & & Other Financing Sources-Proceeds of Bonds & & 5,060,000 \\ \hline \multirow[t]{3}{*}{9b} & & \multicolumn{3}{|c|}{\begin{tabular}{l} Record the $4,560,000 contract signed for building a city call at an estimated cost of $5,060,000 in capital projects \\ fund. \end{tabular}} \\ \hline & & Encumbrances & 4,560,000 & \\ \hline & & Encumbrances Outstanding & & 4,560,000 \\ \hline \multirow[t]{3}{*}{9c} & \begin{tabular}{l} Governmental \\ Activity \end{tabular} & \multicolumn{3}{|c|}{ Record the issue of 6% bonds with a face value of $5,060,000 in the Governmental Activities general ledger. } \\ \hline & & Cash & 5,060,000 & \\ \hline & & Bonds Payable & & 5,060,000 \\ \hline \multicolumn{5}{|c|}{\begin{tabular}{l} 10. The general government function issued a purchase order for $35,000 for computer equipment. When the equipment was received, a voucher for \\ $32,500 was approved for payment and payment was made. \end{tabular}} \\ \hline \multirow[t]{3}{*}{10a} & General Fund & \multicolumn{3}{|l|}{ Record the issue of purchase order for $35,000 for computer equipment in the general fund. } \\ \hline & & Encumbrances & 35,000 & \\ \hline & & Encumbrances Outstanding & & 35,000 \\ \hline \multirow[t]{5}{*}{10b} & & \multicolumn{3}{|l|}{ Record the $32,500 payment made for purchase of computer equipment in the general fund. } \\ \hline & & Encumbrances Outstanding & 35,000 & \\ \hline & & Expenditures & 32,500 & \\ \hline & & Encumbrances & & 35,000 \\ \hline & & Cash & & 32,500 \\ \hline \multirow[t]{3}{*}{10c} & \begin{tabular}{l} Governmental \\ Activity \end{tabular} & \multicolumn{3}{|c|}{\begin{tabular}{l} Record the $32,500 payment made for purchase of computer equipment in the Governmental Activities general \\ ledger. \end{tabular}} \\ \hline & & Equipment & 32,500 & \\ \hline & & Cash & & 32,500 \\ \hline \end{tabular} Required a. For each transaction number, identify all of the fund and/or government-wide activity journals in which journal entries must be made. (Select all that apply.) Required 4. A citizen of Lynnwood donated marketable securities with a fair value of $800,000. The donated resources are to be maintained in perpetuity with the city using the revenue generated by the donation to finance an after-school program for children, which is sponsored by the culture and recreation function. Revenue earned and received as of December 31 was $40,000. \begin{tabular}{|c|c|c|c|c|} \hline \multirow[t]{2}{*}{4a} & \multirow[t]{2}{*}{ Permanent fund } & \multicolumn{3}{|l|}{ Record the receipt of $800,000 marketable securities received as donation in the permanent fund. } \\ \hline & & Investments-Marketable Securities & 800,000 & \\ \hline & & Revenues-Contributions for Endowment & & 800,000 \\ \hline \multirow[t]{3}{*}{4b} & & \multicolumn{3}{|l|}{ Record the $40,000 interest revenue earned and received in the permanent fund. } \\ \hline & & Cash & 40,000 & \\ \hline & & Revenues_Investment Earnings & & 40,000 \\ \hline \multirow[t]{3}{*}{4c} & & \multicolumn{3}{|l|}{ Record the transfer of $40,000 cash. } \\ \hline & & Other Financing Uses_Interfund Transfers Out & 40,000 & \\ \hline & & Cash & & 40,000 \\ \hline \multirow[t]{3}{*}{4d} & \begin{tabular}{l} After-School \\ Fund \end{tabular} & \multicolumn{3}{|c|}{ Record the transfer of $40,000 finance to be used for conducting an after-school program for children. } \\ \hline & & Cash & 40,000 & \\ \hline & & Other Financing Sources-Interfund Transfers In & & 40,000 \\ \hline \multirow[t]{3}{*}{4e} & \begin{tabular}{c} Governmental \\ Activity \end{tabular} & \multicolumn{3}{|c|}{\begin{tabular}{l} Record the receipt of $800,000 marketable securities received as donation in the Governmental Activities \\ general ledger. \end{tabular}} \\ \hline & & Investments-Marketable Securities & 800,000 & \\ \hline & & General Revenues-Contributions for Endowment & & 800,000 \\ \hline \multirow[t]{3}{*}{4f} & & \multicolumn{3}{|c|}{ Record the receipt of $40,000 interest revenue earned in the Governmental Activities general ledger. } \\ \hline & & Cash & 40,000 & \\ \hline & & \begin{tabular}{l} Program Revenues-Culture and Recreation-Operating Grants and \\ Contributions \end{tabular} & & 40,000 \\ \hline \multicolumn{5}{|c|}{\begin{tabular}{l} 5. The city's utility fund billed the city's General Fund $125,000 for water and sewage services. As of December 31, the General Fund had paid \$124,000 \\ of the amount biled. \end{tabular}} \\ \hline \multirow[t]{3}{*}{5a} & Enterprise fund & \multicolumn{3}{|l|}{ Record the $125,000 services received for water and sewage in the enterprise fund. } \\ \hline & & Due from Other Funds & 125,000 & \\ \hline & & Charges for Services & & 125,000 \\ \hline \multirow[t]{3}{*}{5b} & & \multicolumn{3}{|l|}{ Record the $124,000 received from the general fund in the enterprise fund. } \\ \hline & & Cash & 124,000 & \\ \hline & & Due from Other Funds & & 124,000 \\ \hline \multirow[t]{3}{*}{5c} & General Fund & \multicolumn{3}{|l|}{ Record the $125,000 services received for water and sewage in the general fund. } \\ \hline & & Expenditures & 125,000 & \\ \hline & & Due to Other Funds & & 125,000 \\ \hline \multirow[t]{3}{*}{5d} & & \multicolumn{3}{|l|}{ Record the $124,000 payment made to the enterprise fund in the general fund. } \\ \hline & & Due to Other Funds & 124,000 & \\ \hline & & Cash & & 124,000 \\ \hline \multirow[t]{3}{*}{5e} & \begin{tabular}{l} Governmental \\ Activity \end{tabular} & \multicolumn{3}{|c|}{ Record the $125,000 services received for water and sewage in the Governmental Activities general ledger. } \\ \hline & & Expenses-General Government & 125,000 & \\ \hline & & Internal Balances & & 125,000 \\ \hline \multirow[t]{3}{*}{5f} & & \multicolumn{3}{|l|}{ Record the $124,000 received from the general fund in the Governmental Activities general ledger. } \\ \hline & & Internal Balances & 124,000 & \\ \hline & & Cash & & 124,000 \\ \hline \end{tabular} 6. The central duplicating fund purchased $4,500 in supplies. \begin{tabular}{|c|c|c|c|c|} \hline 6a & \begin{tabular}{l} Internal service \\ fund \end{tabular} & \multicolumn{3}{|l|}{ Record the $4,500 purchase of supplies in the internal service fund. } \\ \hline & & Inventory of Supplies & 4,500 & \\ \hline & & Cash & & 4,500 \\ \hline \multirow[t]{3}{*}{6b} & \begin{tabular}{c} Governmental \\ Activity \end{tabular} & \multicolumn{3}{|l|}{ Record the $4,500 purchase of supplies in the Governmental Activities general ledger. } \\ \hline & & Inventory of Supplies & 4,500 & \\ \hline & & Cash & & 4,500 \\ \hline \multicolumn{5}{|c|}{\begin{tabular}{l} 7. Cash collections recorded by the general government function during the year were as follows: property taxes, $1,925,000; licenses and permits, \\ $35,000; user charges, $28,000. \end{tabular}} \\ \hline \multirow[t]{4}{*}{7a} & General Fund & \multicolumn{3}{|c|}{\begin{tabular}{l} Record the cash collections of $1,925,000 for property taxes; $35,000 for licenses and permits; $28,000 for user \\ charges in the general fund. \end{tabular}} \\ \hline & & Cash & 1,988,000 & \\ \hline & & Taxes Receivable-Current & & 1,925,000 \\ \hline & & Revenues & & 63,000 \\ \hline \multirow[t]{4}{*}{7b} & \begin{tabular}{c} Governmental \\ Activity \end{tabular} & \multicolumn{3}{|c|}{\begin{tabular}{l} Record the cash collections of $1,925,000 for property taxes; $35,000 for licenses and permits; $28,000 for user \\ charges in the Governmental Activities general ledger. \end{tabular}} \\ \hline & & Cash & 1,988,000 & \\ \hline & & Taxes Receivable-Current & & 1,925,000 \\ \hline & & Program Revenue_General Government_-Charges for Services & & 63,000 \\ \hline \multicolumn{5}{|c|}{\begin{tabular}{l} 8. During the year, the internal service fund billed the city's general government function $15,700 for duplicating services and it billed the city's utility fund \\ $8,100 for services. \end{tabular}} \\ \hline \multirow[t]{3}{*}{8a} & \begin{tabular}{l} Internal service \\ fund \end{tabular} & \multicolumn{3}{|c|}{ Record the $15,700 duplicating services and $8,100 services billed by the internal service fund. } \\ \hline & & Due from Other Funds & 23,800 & \\ \hline & & Billings to departments & & 23,800 \\ \hline \multirow[t]{3}{*}{8b} & Enterprise fund & \multicolumn{3}{|l|}{ Record the 8,100 services billed by the internal service fund in the enterprise fund. } \\ \hline & Enterprise fund & Expenses-Administrative & 8,100 & \\ \hline & & Due to Other Funds & & 8,100 \\ \hline \multirow[t]{3}{*}{8c} & General Fund & \multicolumn{3}{|l|}{ Record the $15,700 duplicating services by the internal service fund in the general fund. } \\ \hline & & Expenditures & 15,700 & \\ \hline & & Due to Other Funds & & 15,700 \\ \hline \multirow[t]{3}{*}{ 8d } & \begin{tabular}{c} Governmental \\ Activity \end{tabular} & \multicolumn{3}{|c|}{ Record the 8,100 services billed by the internal service fund in the Governmental Activities general ledger. } \\ \hline & & Internal Balances & 8,100 & \\ \hline & & Program Revenue_General Government_Charges for Services & & 8,100 \\ \hline \multicolumn{5}{|c|}{\begin{tabular}{l} 9. The city council decided to build a city hall at an estimated cost of $5,000,000. To finance the construction, 6 percent bonds were sold at the face \\ value of $5,000,000. A contract for $4,500,000 has been signed for the project; however, no expenditures have been incurred as of December 31 . \end{tabular}} \\ \hline \multirow[t]{3}{*}{9a} & \begin{tabular}{l} Capital projects \\ fund \end{tabular} & \multicolumn{3}{|l|}{ Record the issue of 6% bonds with a face value of $5,000,000 in capital projects fund. } \\ \hline & & Cash & 5,000,000 & \\ \hline & & Other Financing Sources-Proceeds of Bonds & & 5,000,000 \\ \hline \multirow[t]{3}{*}{9b} & & \multicolumn{3}{|c|}{\begin{tabular}{l} Record the $4,500,000 contract signed for building a city call at an estimated cost of $5,000,000 in capital \\ projects fund. \end{tabular}} \\ \hline & & Encumbrances & 4,500,000 & \\ \hline & & Encumbrances Outstanding & & 4,500,000 \\ \hline \multirow[t]{3}{*}{9c} & \begin{tabular}{l} Governmental \\ Activity \end{tabular} & \multicolumn{3}{|c|}{ Record the issue of 6% bonds with a face value of $5,000,000 in the Governmental Activities general ledger. } \\ \hline & & Cash & 5,000,000 & \\ \hline & & Bonds Payable & & 5,000,000 \\ \hline \end{tabular} \begin{tabular}{|c|c|c|c|c|} \hline \multirow[t]{2}{*}{10a} & \multirow[t]{2}{*}{ General Fund } & \multicolumn{3}{|l|}{ Record the issue of purchase order for $32,000 for computer equipment in the general fund. } \\ \hline & & Encumbrances & 32,000 & \\ \hline & & Encumbrances Outstanding & & 32,000 \\ \hline \multirow[t]{5}{*}{106} & & \multicolumn{3}{|l|}{ Record the $31,900 payment made for purchase of computer equipment in the general fund. } \\ \hline & & Encumbrances Outstanding & 32,000 & \\ \hline & & Expenditures & 31,900 & \\ \hline & & Encumbrances & & 32,000 \\ \hline & & Cash & & 31,900 \\ \hline \multirow[t]{3}{*}{10c} & \begin{tabular}{c} Governmental \\ Activity \end{tabular} & \multicolumn{3}{|c|}{\begin{tabular}{l} Record the $31,900 payment made for purchase of computer equipment in the Governmental Activities general \\ ledger. \end{tabular}} \\ \hline & & Equipment & 31,9000 & \\ \hline & & Cash & & 31,900 \\ \hline \end{tabular}
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