Question

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The following transactions occurred during the 2020 fiscal year for the City of Evergreen. For budgetary purposes, the city reports encumbrances in the Expenditures section of its budgetary comparison schedule for the General Fund but excludes expenditures chargeable to a prior year’s appropriation.

1. The budget prepared for the fiscal year 2020 was as follows:

Estimated Revenues:
Taxes	$	1,943,000
Licenses and permits		372,000
Intergovernmental revenue		397,000
Miscellaneous revenues		62,000
Total estimated revenues		2,774,000
Appropriations:
General government		471,000
Public safety		886,000
Public works		650,000
Health and welfare		600,000
Miscellaneous		86,000
Total appropriations		2,693,000
Budgeted increase in fund balance	$	81,000

2. Encumbrances issued against the appropriations during the year were as follows:

General government	$	58,000
Public safety		250,000
Public works		392,000
Health and welfare		160,000
Miscellaneous		71,000
Total	$	931,000

3. The current year’s tax levy of $2,005,000 was recorded; uncollectibles were estimated as $65,000.

4. Tax collections of the current year’s levy totaled $1,459,000. The City also collected $132,000 in taxes from the prior year’s levy in the first 60 days after year end. (These delinquent collections had been anticipated prior to year-end.)

5. Personnel costs during the year were charged to the following appropriations in the amounts indicated. Encumbrances were not recorded for personnel costs. Because no liabilities currently exist for withholdings, you may ignore any FICA or federal or state income tax withholdings. (Expenditures charged to Miscellaneous should be treated as General Government expenses in the governmental activities general journal at the government-wide level.)

General government	$	411,000
Public safety		635,000
Public works		254,000
Health and welfare		439,000
Miscellaneous		11,100
Credit to Vouchers Payable	$	1,750,100

6. Invoices for all items ordered during the prior year were received and approved for payment in the amount of $14,470. Encumbrances had been recorded in the prior year for these items in the amount of $14,000. The amount chargeable to each year’s appropriations should be charged to the Public Safety appropriation.

7. Invoices were received and approved for payment for items ordered in documents recorded as encumbrances in Transaction (2) of this problem. The following appropriations were affected.

	Actual Liability				Estimated Liability
General government	$	52,700			$	52,200
Public safety		236,200				240,900
Public works		360,000				357,000
Health and welfare		130,600				130,100
Miscellaneous		71,000				71,000
	$	850,500			$	851,200

8. Revenue other than taxes collected during the year consisted of licenses and permits, $373,000; intergovernmental revenue, $400,000; and $66,000 of miscellaneous revenues. For purposes of accounting for these revenues at the government-wide level, the intergovernmental revenues were operating grants and contributions for the Public Safety function. Miscellaneous revenues are not identifiable with any function and, therefore, are recorded as General Revenues at the government-wide level.

9. Payments on Vouchers Payable totaled $2,505,000.

Additional information follows: The General Fund Fund Balance—Unassigned account had a credit balance of $96,900 as of December 31, 2019; no entries have been made in the Fund Balance—Unassigned account during 2020.

b- Prepare a budgetary comparison schedule for the General Fund of the City of Evergreen for the fiscal year ending December 31, 2020. (Input all amounts as positive values.)

CITY OF EVERGREEN General Fund Budgetary Comparison Schedule For the Year Ended December 31, 2020 Budget (Original and Final) Actual Variance with Final Budget Over (Under) Revenues Total Revenues

Answer 1

Answer:

City Of Evergreen
General Fund
Budgetary Comparison Schedule
For The Year Ended December 31, 2020
	Budget (Original and Final)	Actual	Variance With Final Budget Over (Under)
Revenues:
Taxes	$1,943,000	$1,940,000	($3,000)
Licenses And Permits	372,000	373,000	$1,000
Intergovernmental Revenue	397,000	400,000	$3,000
Miscellaneous Revenues	62,000	66,000	$4,000
Total Revenues	2,774,000	2,779,000	$5,000
Expenditures (Budget Basis):
General Government	471,000	469,500	($1,500)
Public Safety	886,000	880,770	($5,230)
Public Works	650,000	649,000	($1,000)
Health And Welfare	600,000	599,500	($500)
Miscellaneous	86,000	82,100	($3,900)
Total Expenditures	2,693,000	2,680,870	($12,130)
Excess Of Revenues Over Expenditures	81,000	98,130	$17,130
Increase In Encumbrances Outstanding	0	65,800	$65,800
Increase In Fund Balances	81,000	163,930	$82,930
Fund Balances, 1/1	96,900	96,900	$0
Fund Balances, 12/31	$177,900	$260,830	$82,930

Calculation :

Taxes (Actual) = 2,005,000 - 65,000= 1,940,000

Expenditure Actual:

GENERAL GOVERNMENT
			Original Budget		471,000
1	58,000
2	411,000
5	-52,200
7	52,700
Variance calculated		1,500
Actual		469,500
PUBLIC SAFETY
Original Budget		886,000
1	250,000
2	635,000
5	-240,900
6	236,200
7	470
Variance calculated		5,230
Actual		880,770
PUBLIC WORKS
Original Budget		650,000
1	392,000
2	254,000
5	-357,000
7	360,000
Variance calculated		1,000
Actual		649,000
HEALTH AND WELFARE
Original Budget		600,000
1	160,000
2	439,000
5	-130,100
7	130,600
Variance calculated		500
Actual		599,500
MISCELLANEOUS
Original Budget		86,000
1	71,000
2	11,100
5	-71,000
7	71,000
Variance calculated		3,900
Actual		82,100

Increase In Encumbrances Outstanding

Fund balances do not include encumbrances.

So, the $79,800 of encumbrances which were included as actual expenditure for budgetary comparison should be added back to confirm they doesnt affect fund balances. Even though, $14,000 of the expenditures made during the year for goods received in 2020 that were ordered in 2019 were reported as expenditures of the current year and therefore deducted fund balances by that amount.

So, 79,800 -14,000 = 65,800