Transaction Reporting in Fund and Government-Wide Statements

Each transaction relates to the activities of Lancaster County.

1. General obligation bonds, due in 20 years, are issued for $10,000,000 in cash. The bonds are used to finance the building of a new community center. The total cost of the community center is $12,000,000.

2. Principal of $500,000 and interest of $25,000 are paid on general obligation debt. This debt was not used to finance capital assets.

3. Snow removal equipment is purchased by the general fund at a cost of $150,000.

4. Equipment with original cost of $300,000 is sold for $40,000. The equipment had a 5-year life when purchased, and was sold after 4 years. The county uses straight-line depreciation when appropriate. The equipment was used in general government operations.

5. The county collects $225,000 in property taxes to be remitted to the town.

6. Investments are made using $550,000 withheld from paychecks of county workers to finance their pension plan.

7. The investments in transaction 6 increase in value by $11,000 during the year, although the investments are not liquidated.

8. Cash of $200,000 is received from a citizen, to be held in trust and used for scholarships for local citizens to attend local universities. All amounts received are spendable.

Required

For each transaction:

Indicate the fund affected and prepare the journal entry required in the fund financial statements.

Indicate whether the transaction is considered a governmental or business-type activity in the government-wide financial statements and prepare the journal entry required in the government-wide financial statements.

Instructions:

If an item is not reported in a fund statement and/or in the government-wide statements, select Not applicable and No entry.

Enter answers using all zeros (do not abbreviate to millions or to thousands).

1. General obligation bonds, due in 20 years, are issued for $10,000,000 in cash. The bonds are used to finance the building of a new community center. The total cost of the community center is $12,000,000.

Fund financial statements:

1.A Which fund is the transaction recorded in? (Capital projects fund/custodial fund/debt service fund/general fund/pension trust fund/ special revenue fund/NA)

Journal Entries

Description Debit Credit

Answer

Answer

To record Issuance of bonds

Description Debit Credit

Answer

Answer

To record costs incurred to build the community center

1.B

Government-wide statements:

Item(s) is/are reported as (business type/government type/NA)

Journal Entries

Description Debit Credit

Answer

Answer

To record issuance of bonds.

Description Debit Credit

Answer

Answer

To record costs incurred to build the community center.

Description Debit Credit

Answer

Answer

To recategorize net position.

2. Principal of $500,000 and interest of $25,000 are paid on general obligation debt. This debt was not used to finance capital assets.

Fund financial statements:

2.A

Which fund is the transaction recorded in? (Capital projects fund/custodial fund/debt service fund/general fund/pension trust fund/ special revenue fund/NA)

Journal Entries

Description Debit Credit

Expenditures: principal Answer

Answer

Answer

2.B

Government-wide statements:

Item(s) is/are reported as (business type/government type/NA)

Journal Entries

Description Debit Credit

Long-term general obligation debt Answer

Answer

Answer

3. Snow removal equipment is purchased by the general fund at a cost of $150,000.

3.A

Fund financial statements:

Which fund is the transaction recorded in? (Capital projects fund/custodial fund/debt service fund/general fund/pension trust fund/ special revenue fund/NA)

Journal Entries

Description Debit Credit

Answer

Answer

3.B

Government-wide statements:

Item(s) is/are reported as (business type/government type/NA)

Journal Entries

Description Debit Credit

Answer

Answer

Answer

Answer

To recategorize net position.

4. Equipment with original cost of $300,000 is sold for $40,000. The equipment had a 5-year life when purchased, and was sold after 4 years. The county uses straight-line depreciation when appropriate. The equipment was used in general government operations.

4.A

Fund financial statements

Which fund is the transaction recorded in? (Capital projects fund/custodial fund/debt service fund/general fund/pension trust fund/ special revenue fund/NA)

Journal Entries

Description Debit Credit

Answer

Answer

4.B

Government-wide statements:

Item(s) is/are reported as (business type/government type/NA)

Journal Entries

Description Debit Credit

Cash Answer

Answer

Answer

Answer

Answer

To recategorize net position.

5. The county collects $225,000 in property taxes to be remitted to the town.

Fund financial statements:

5.A

Which fund is the transaction recorded in? (Capital projects fund/custodial fund/debt service fund/general fund/pension trust fund/ special revenue fund/NA)

Journal Entries

Description Debit Credit

Answer

Answer

To collection of property taxes.

Description Debit Credit

Answer

Answer

To record property taxes to be remitted to the town.

5.B

Government-wide statements:

Item(s) is/are reported as (business type/government type/NA)

Journal Entries

Description Debit Credit

Answer

Answer

6. Investments are made using $550,000 withheld from paychecks of county workers to finance their pension plan.

Fund financial statements:

6.A

Which fund is the transaction recorded in? (Capital projects fund/custodial fund/debt service fund/general fund/pension trust fund/ special revenue fund/NA)

Journal Entries

Description Debit Credit

Answer

Answer

To collection of property taxes.

6.B

Government-wide statements:

Item(s) is/are reported as (business type/government type/NA)

Journal Entries

Description Debit Credit

Answer

Answer

7. The investments in transaction 6 increase in value by $11,000 during the year, although the investments are not liquidated.

Fund financial statements:

7.A

Which fund is the transaction recorded in? (Capital projects fund/custodial fund/debt service fund/general fund/pension trust fund/ special revenue fund/NA)

Journal Entries

Description Debit Credit

Answer

Answer

7.B

Government-wide statements:

Item(s) is/are reported as (business type/government type/NA)

Journal Entries

Description Debit Credit

Answer

Answer

8. Cash of $200,000 is received from a citizen, to be held in trust and used for scholarships for local citizens to attend local universities. All amounts received are spendable.

Fund financial statements:

8.A

Which fund is the transaction recorded in? (Capital projects fund/custodial fund/debt service fund/general fund/pension trust fund/ special revenue fund/NA)

Journal Entries

Description Debit Credit

Answer

Answer

8.B

Government-wide statements:

Item(s) is/are reported as (business type/government type/NA)

Journal Entries

Description Debit Credit

Answer

Answer

Please answer all parts of the question.