Question

Chesterfield County had the following transactions. a. A budget is passed for all ongoing activities. Revenue is anticipated to be $1,026,750 with approved spending of $638,000 and operating transfers out of $335,000. b. A contract is signed with a construction company to build a new central office building for the government at a cost of $8,500,000. A budget for this project has previously been recorded. c. Bonds are sold for $8,500,000 (face value) to finance construction of the new office building. d. The new building is completed. An invoice for $8,500,000 is received and paid. e. Previously unrestricted cash of $1,100,000 is set aside to begin paying the bonds issued in (c) f. A portion of the bonds comes due and $1,100,000 is paid. Of this total, $225,000 represents interest. The interest had not been previously accrued. g. Citizens' property tax levies are assessed. Total billing for this tax is $935,000. On this date, the assessment is a legally enforceable claim according to the laws of this state. The money to be received is designated for the current period and 90 percent is assumed to be collectible in this period with receipt of an additional 6 percent during subsequent periods but in time to be available to pay current period claims. The remainder is expected to be uncollectible. h. Cash of $217,000 is received from a toll road. This money is restricted for highway maintenance. i. The county received investments valued at $382,000 as a donation from a grateful citizen. Income from these investments must be used to beautify local parks. Prepare the entries first for fund financial statements and then for government-wide financial statements.

Answer 1

Journal Enteries Event Fund a. General Particulars Estimated Revenue Control a/c Dr. To Appropriations Control To Estimated other financing uses - operating transferes To Budgetary Balance Debit in $ Credit in $ 1026750 638000 335000 53750 Government Wide No journal entry since budgets are not required to be reported b. Capital Projects Dr. 8500000 Encumbrance Control a/c To Fund Balance - Reserved for Encumbrances 8500000 Government Wide No journal entry since commitments are not required to be reported C. Capital Projects 8500000 Cash a/c Dr. To Other Financial sources control 8500000 Dr. 8500000 Government Wide Cash a/c To Bonds Payable 8500000 d. Capital Projects 8500000 Fund Balance - Reserved fro Encumbrances a/c Dr. To Encumbrance Control 8500000 8500000 Expenditures Control a/c To Contracts Payable 8500000 8500000 Contracts Payable a/c To Cash 8500000 8500000 Government Wide Buildings a/c To Cash 8500000 e. General Dr. 1100000 Other Financing Uses Control a/c To Cash 1100000 Debt Service Dr. 1100000 Cash a/c To Other Financing Resources 1100000 Government Wide No journal entry since since there was an interactivity transfer. Remember that interactivities are for transfers within the government.

Event Fund Particulars Debit in $ Credit in $ Bonds = Total cash - interest amount = 1100000 - 225000 = 875000 Debt Service Expenditures control - Bonds a/c Expenditures control - Interest a/c To Cash Dr. Dr. 875000 225000 1100000 Government Wide Bonds Payable a/c Interest Expense a/c To Cash 875000 225000 Dr. 1100000 Total Collectible Tax = 90% +6% = 96% It is stated that 90% is assumed to be collected and the city receives a receiot for 6% to be collected in subsequent periods. Therefore this 6% can still be used for the current period even though it will not be collected in the current period. Tax Income = 935000 x 96% = 897600 Uncollectable tax = Total Tax-tax income = 935000 - 897600 = 37400 General Dr. 935000 Property Tax Receivable a/c To Revenues - Property Tax To Uncollectible Taxes 897600 37400 Dr. 935000 Government Wide Property Tax Receivable a/c To Revenues - Property Tax To Uncollectible Taxes 897600 37400 h. Special Revenue 217000 Cash a/c To Revenues Control 217000 Dr. 217000 Government Wide Cash a/c To Revenue - Reserved for Highway Maintenance 217000 Permanent 382000 Investments a/c To Contribution Revenue 382000 382000 Government Wide Investments a/c To Revenue- Donations 382000