Question

[Para. 4-a-10]Invoices for some of goods and services ordered in transaction 4-a-3 were received and vouchered for later payment. (Select “Elimination” in the drop down [Transaction Description] menu in the Detail Journal):

                                                                        Actual           Estimated

                  General Government               $   395,940      $   394,060

                  Public Safety                             1,086,650        1,088,600

                  Public Works                               922,300           927,620

                  Health and Welfare                      661,200           663,600

                  Culture and Recreation                593,750           597,000

                  Miscellaneous                              138,000           138,000

                       Totals                                 $3,797,840      $3,808,880

Required: Record the receipt of these goods and the related vouchers payable in both the General Fund and governmental activities journals. 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 for $72,500 of playground equipment ordered by Culture and Recreation. The equipment meets the city’s threshold for capitalization (debit Equipment for this item at the government-wide level). Expenditures charged to the miscellaneous appropriation should be recorded in this case as General Government expenses at the government-wide level.

[Para. 4-a-11] The General Fund paid vouchers during the year in the amount of $3,200,000 as well as its liabilities for employees’ federal and state income taxes withheld and payroll taxes.

Required:   Record the payment of these items in both the General Fund and governmental activities general journals.

[Para. 4-a-12] The General Fund transferred $50,000 to the debt service fund so the debt service fund could make a bond interest payment.

      Required: Record this transaction in the General Fund only. The transaction has no effect at the government-wide level since it occurs between two governmental activities. (Do not record this transaction in the debt service fund until instructed to do so in Chapter 6 of this case.)

[Para. 4-a-13]Tax anticipation notes issued by the General Fund were paid at maturity at the face amount plus interest of $10,000.

Required:   Record the payment of these items in both the General Fund and governmental activities general journals. For the General Fund charge Miscellaneous for the interest expenditure. At the government-wide level, debit Expenses—Interest on Tax Anticipation Notes.

Answer 1

General Fund

3,808,880 General Fund - General Journal Encumbrances Outstanding Encumbrances Expenditures Vouchers Payable 2600 7010 6010 2010 4-a-10 4-a-10 4-a-10 4-a-10 3,808,880 3,797,840 3,797,840

Note: Use of ACCT 7010 will open the detail journal for encumbrances where you will enter the estimated amounts by function. Use of ACCT 6010 will open the detail journal for expenditures where you will enter the actual amounts by function and use goods received in the pull down menu. (You will have to populate the goods received in the pull down menu each time you enter the expenditure).

Gov Wide

Assume the city uses the periodic inventory method. The invoiced amounts above should be recorded as expenses of the appropriate functions, except for $72,500 of playground equipment ordered by Culture and Recreation. The equipment meets the city’s threshold for capitalization (debit Equipment for this item at the government-wide level). The amount attributable to Culture and Recreation is $72,500 for the equipment and $521,250 for expenses totaling to $593,750

1280 6600 6610 6640 6650 6660 2010 Gov Act, Gov-Wide - General Journal Equipment Expenses - Gen Gov Expenses - Public Safety Expenses - Public Works Expenses - Health and Welfare Expenses - Culture and Recreation Vouchers Payable 4-a-10 4-a-10 4-a-10 4-a-10 4-a-10 4-a-10 4-a-10 72,500 533,940 1,086,650 922,300 661,200 521,250 3,797,840

Para 4-a-11

3,200,000 3,200,000 2010 1010 2040 2050 General Fund - General Journal Vouchers Payable Cash Due to Federal Government Due to State Government Cash 4-a-11 4-a-11 4-a-11 4-a-11 4-a-11 1,632,851 610,950 1010 2,243,801 3,200,000 3,200,000 2010 1010 2040 2050 1010 Gov Act, Gov-Wide - General Journal Vouchers Payable Cash Due to Federal Government Due to State Government Cash 4-a-11 4-a-11 4-a-11 4-a-11 4-a-11 1,632,851 610,950 2,243,801

Para 4-a-12

General Fund - General Journal Other Fin Uses - Interfund Transfers Out Cash 50,000 6160 1010 su 4-a-12 4-a-12 50,000

Para 4-a-13

6010 2020 1010 General Fund - General Journal Expenditures Tax Anticipation Notes Payable Cash 4-a-13 4-a-13 4-a-13 10,000 500,000 510,000 2020 6680 1010 Gov Act, Gov-Wide - General Journal Tax Anticipation Notes Payable Expenses - Int on Tax Anticipation Notes Cash 4-a-13 4-a-13 4-a-13 500,000 10,000 510,000