Question

ACCOUNTING FOR GOVERNMENTAL AND NONPROFIT ORGANIZATIONS HANDOUT PROBLEM 3 Score Name Section Problem (10 points) In fiscal year 20x4, a philanthropic citizen made a gift to the City of Champlin. Under the terms of the gift, the city was to purchase securities and use the earnings on these securities to purchase book on history for the local library. Only the earnings on the securities are eligible for expenditure. During fiscal year 20X4, the attached transactions occurred. Prepare the appropriate general journal entries, in proper form, that would be required for this permanent fund for fiscal year 20X4 based upon the attached information. Omit explanations. Use the letter of the transaction as the transaction date. REQUIRED: (1) (2) Prepare a statement of revenues, expenditures, and changes in fund balances in proper form, for this fund for fiscal year 20X4.

Answer 1

Journal Entries
Date	Particulars	Debit($)	Credit($)
a	Cash	$3,000,000
	Revenue		$3,000,000
	Received the Gift
b	Government Securities	$3,000,000
	Cash		$3,000,000
	Purchased Government Securities
c	Cash	$125,000
	Revenue		$125,000
	Received Investment Revenue
d	Cash	$90,000
	Revenue		$90,000
	Received Library Fund
e	Audit Expenses	$2,500
	Accounts Payable		$2,500
	Received Audit bill
f	Cash	$62,000
	Revenue		$62,000
	Investment Revenu Received
g	Cash	$30,000
	accounts Receivable	$20,000
	Revenue		$50,000
	Transfer Made to the Libray Fund
h	accounts Receivable	$22,000
	Revenue		$22,000
	Investment Revenue Accrued
i	Cash	$40,000
	Revenue		$40,000

Cash
Date	Debit ($)	Credit($)	Balance($)
a	$3,000,000		$3,000,000
b		$3,000,000	$0
c	$125,000		$125,000
d	$90,000		$215,000
f	$62,000		$277,000
g	$30,000		$307,000
i	$40,000		$347,000

Revenue
Date	Debit ($)	Credit($)	Balance($)
a		$3,000,000	($3,000,000)
c		$125,000	($3,125,000)
d		$90,000	($3,215,000)
f		$62,000	($3,277,000)
g		$50,000	($3,327,000)
h		$22,000	($3,349,000)
i		$40,000	($3,389,000)

Government Securities
Date	Debit ($)	Credit($)	Balance($)
b	$3,000,000		$3,000,000

Audit Expenses
Date	Debit ($)	Credit($)	Balance($)
e	$2,500		$2,500

Accounts Payable
Date	Debit ($)	Credit($)	Balance($)
e		$2,500	($2,500)

accounts Receivable
Date	Debit ($)	Credit($)	Balance($)
g	$20,000		$20,000
h	$22,000		$42,000

Trail Balance
Particulars	Debit($)	Credit($)
Cash	$347,000
Revenue		$3,389,000
Government Securities	$3,000,000
Audit Expenses	$2,500
Accounts Payable		$2,500
accounts Receivable	$42,000
	$3,391,500	$3,391,500