Question

4-C. Part 2. Special Revenue Fund Transactions Required: a. Record journal entries for the following transactions for FY 2017 and post to the general ledger. As there are relatively few revenues and expenditures, the use of control accounts is not necessary. (Make entries directly to individual revenue and expenditure accounts). (1) The state government notified the City that $1,065,000 will be available for street and highway maintenance during 2017 (i.e. the City has met eligibility requirements). The funds are not considered reimbursement-type as defined by GASB standards. Continuous Problem - City of Monroe (2) Cash in the total amount of $997,000 was received from the state government. (3) Contracts, all eligible for payment from the Street and Highway Fund, were signed in the amount of $1,062,000. (4) Contractual services (see transaction 3) were received; the related contracts amounted to $1,042,000. Invoices amounting to $1,040,500 for these items were approved for payment. The goods and services all were for street and highway maintenance. (5) Investment revenue of $5,120 was earned and received. (6) Accounts payable were paid in the amount of $923,000. (7) All required legal steps were accomplished to increase appropriations in the amount of $4,500. b. Prepare and post the necessary closing entries for the Street and Highway Fund. c. Prepare a Statement of Revenues, Expenditures, and Changes in Fund Balances for the Street and Highway Fund for the fiscal year ended December 31, 2017. d. Prepare a Balance Sheet for the Street and Highway Fund as of December 31, 2017. Assume any unexpended net resources are classified as Restricted Fund Balance.

Answer 1

		Dr	Cr
		$	$
1	No Journal entry required
	The state government has just notified
2	Cash a/c	9,97,000
	To Funds for street and highway maintenance a/c		9,97,000
3	No Journal entry required
	Only contract is signed
4	Funds for street and highway maintenance a/c	10,42,000
	To Revenue		10,42,000
5	Cash a/c	5,120
	To Income on Investment		5,120
6	Accounts Payable a/c	9,23,000
	To Cash a/c		9,23,000
7	Legal Exp a/c	4,500
	To Cash a/c		4,500

Statemetn of Revenue
revenue from Street and highwasy maintenance	10,42,000
revene from Investment	5,120
Total	10,47,120
Statemetn of Expenditure
Accounts Payable	9,23,000
Legal Exp	4,500
Total	9,27,500
Changes in fund
Amount received for Maintenance	9,97,000
revene from Investment	5,120
Accounts payable	-9,23,000
Legal Exp	-4,500
Closing Balance	74,620
For Balance sheet all the data is not available