Question
What will my debits and credits look like for these? [Para. 4-a-1] On January 2, 2020, real property taxes were levied for the year in
What will my debits and credits look like for these?
[Para. 4-a-1] On January 2, 2020, real property taxes were levied for the year in the amount of $1,878,700.It was estimated that 2 percent of the levy would be uncollectible.
Required: Record this transaction in both the General Fund and governmental activities journal. (Note: Type 4-a-1 as the paragraph number in the [Add description] field for this entry; 4-a-2 for the next transaction, etc. Careful referencing by paragraph number is very helpful should you need to determine where you may have omitted a required journal entry or may have made an error.) For the General Fund only you will be directed to the Detail Journal where you will select "Accrued Revenue" in the drop down [Description] menu when recording property tax revenue.
2.[Para. 4-a-2] Encumbrances were recorded in the following amounts for purchase orders issued against the appropriations indicated:
General Government$135,673
Public Safety386,652
Public Works180,804
Culture and Recreation126,599
Total$829,728
Required:Record the encumbrances in the General Fund general journal and Detail Journal as appropriate.In the Detail Journal, select "Purchase orders" from the drop down [Description] menu.
3.[Para. 4-a-3] Cash was received during the year in the total amount of $4,028,058 for collections from the following receivables and cash revenues, as indicated:
Current Property Taxes$1,488,206
Delinquent Property Taxes387,201
Interest and Penalties Receivable on Taxes34,270
Due from State Government165,000
Revenues: (total: $1,953,381)
Licenses and Permits477,960
Fines and Forfeits211,106
Intergovernmental639,000
Charges for Services625,315
Total$4,028,058
Required:Record the receipt of cash and the related credits to receivables and revenues accounts, as applicable, in both the General Fund and governmental activities journals.(Select "Received in cash" in the drop down [Description] menu in the Detail Journal related to the General Fund revenue entries.)
For purposes of the governmental activities entries at the government-wide level assume the following revenue classifications:
General FundGovernmental Activities
Licenses and PermitsProgram RevenuesGeneral Government
Charges for Services
Fines and ForfeitsProgram RevenuesGeneral Government
Charges for Services
IntergovernmentalProgram RevenuesPublic SafetyOperating
Grants and Contributions
Charges for ServicesProgram RevenuesGeneral Government
Charges for Services, $343,924
Program RevenuesCulture and Recreation
Charges for Services, $281,391
4.[Para. 4-a-4] Of the $387,201 in delinquent property taxes collected in transaction 4-a-3 $76,994 had been recorded in the Deferred Inflows of Resources account. Additionally, $7,840 of the interest and penalties collected in 4-a-3 had also been recorded as deferred inflows of resources.
Required:In the General Fund recognize the property tax revenues and the interest and penalties revenues related to the deferred inflows of resources. To accomplish this debit the Deferred Inflows of Resources account and credit related property tax revenues and interest and penalties revenues. Select "Previous Deferral" in the [Description] menu in the Detail Journal. Under accrual accounting the deferral was not recognized in the governmental activities journal; therefore, there is no need to record a journal entry in the governmental activities journal.
5.[Para. 4-a-5] General Fund payrolls for the year totaled $3,179,547. Of that amount, $667,705 was withheld for employees' federal income taxes; $453,291 for federal payroll taxes; $238,466 for retirement funds administered by the state government; and the remaining $1,820,085 was paid to employees in cash. The City of Smithville does not record encumbrances for payrolls. The payrolls were chargeable against the following functions:
General Government$663,678
Public Safety1,539,302
Public Works542,765
Culture and Recreation433,802
Total$3,179,547
Required:Make summary journal entries for payroll in both the General Fund and governmental activities general journals for the year.
6.[Para. 4-a-6] Invoices for some of the goods recorded as encumbrances in transaction 4-a-2 were received and vouchered for payment, as listed below. Related encumbrances were canceled in the amounts listed below (Select "Elimination" in the drop down [Description] menu in the Detail Journal):
ExpendituresEncumbrances
General Government$130,606$130,572
Public Safety366,088366,154
Public Works141,981141,972
Culture and Recreation126,000125,965
Total$764,675$764,663
Required:Record the receipt of these goods and the related vouchers payable in both the General Fund and governmental activities journals.In the Detail Journal select "Good received" for the expenditures description. At the government-wide level, you should assume the city uses the periodic inventory method.Thus, the invoiced amounts above should be recorded as expenses of the appropriate functions, except that $32,340 of the amount charged to the Public Works function was for a vehicle (debit Equipment for this item at the government-wide level).
7.[Para. 4-a-7] During FY 2020, the City of Smithville received notification that the state government would send $150,000 at the beginning of the next fiscal year.Based on the city's definition of "available for use," the city considers the funds available for General Government's use in the current reporting period.The budget for the current year included this amount as "Intergovernmental Revenue."
Required:Record this transaction as a receivable and revenue in the General Fund and governmental activities journals.(Note: Select "Accrued Revenue" in the [Description] menuin the Detail Journal).At the government-wide level, assume that this item is an operating grant to the Culture and Recreation function.
8.[Para. 4-a-8] Checks were written in the total amount of $2,096,571 during 2020.These checks were in payment of the following items:
Vouchers Payable$ 700,000
Due to Federal Government1,131,506
Due to State Government265,065
Total amount paid$2,096,571
Required:Record the payment of these items in both the General Fund and governmental activities general journals.
9.[Para. 4-a-9] Current taxes receivable uncollected at year-end, and the related Allowance for Uncollectible Current Taxes account, were both reclassified as delinquent. Of the amount classified as delinquent it was determined $87,010 would not be collected within 60 days of the fiscal year end and would therefore be unavailable for use in the current period.As a result, this amount was reclassified as deferred inflows of resources.
Required:Record the reclassification of the current taxes receivable and related allowance for uncollectible account in the General Fund and governmental activities journals.
Reclassify $87,010 of property tax revenue to the Deferred Inflows of Resources account in the General Fund journal only. (Note: To accomplish the reclassification of revenue, debit the revenue account and credit deferred inflows of resources. Select "Deferral" in the [Description] menu in the Detail Journal.)
10. [Para. 4-a-10] Interest and penalties receivable on delinquent taxes was increased by $40,500; $3,248 of this was estimated as uncollectible and $8,910 was considered unavailable for use in the current fiscal year.
Required:Record this transaction in the General Fund and governmental activities journals as a revenue transaction. The $8,910 classified as unavailable for use is recorded as deferred inflows of resources in the General Fund journal and as revenue in the governmental activities journal.
Post all journal entries to the ledgers: After reviewing all entries for accuracy, including year and paragraph numbers, post all entries to the general ledger accounts and to all subsidiary ledger accounts, by clicking on [Post entries].Also post all entries in the governmental activities journal.
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