Different types of funds justify different practices as to budgets and commitments.
Review the budget note to the Smith City's financial statements presented in the previous problem. Assume that the city engaged in the following transactions in 2020 and 2021:
In 2020, it signed a service contract with a private security company. The company agreed to provide security services to the city's for one year at a cost of $72,000 ($6,000 per month.) By year end the company provided, and paid for, services for three months.
In 2021, the company preformed, and the city paid for, the remaining nine months of the contract. However, because of the agreed-upon changes in the services provided by the company, the total charges for 2021 were reduced from $54,000 to $50,000.
1.
a. General Fund
2020
Fund balance $72,000
Appropriations $72,000
To record an appropriation for the full amount of the contract
Encumbrances $72,000
Reserve for encumbrances $72,000
To establish a reserve for encumbrances
Expenditures $18,000
Cash $18,000
To record expenditures for three months of services
Reserve for encumbrances $18,000
Encumbrances $18,000
To reverse entry establishing encumbrances
Appropriations $72,000
Fund balance $72,000
To close the budgetary account
Fund Balance $72,000
Expenditures $18,000
Encumbrances $54,000
To close encumbrances and expenditures
2021
Fund balance $54,000
Appropriations $54,000
To record the budget for nine months of services
Encumbrances $54,000
Fund balance $54,000
To restore encumbrances
Expenditures $50,000
Cash $50,000
To record expenditures for nine months of services
Reserve for encumbrances $54,000
Encumbrances $54,000
To reverse entry establishing encumbrances
Appropriations $54,000
Fund balance $54,000
To close the budgetary account
Fund balance $50,000
Expenditures $50,000
To close expenditures
b. Capital Projects Fund
2020
Fund balance $72,000
Appropriations $72,000
To record the budget for 12 months of services (the full cost to be incurred over the period of the contract)
Encumbrances $72,000
Reserve for encumbrances $72,000
To establish a reserve for encumbrances
Expenditures $18,000
Cash $18,000
To record expenditures for three months of services
Reserve for encumbrances $18,000
Encumbrances $18,000
To reverse entry establishing encumbrances
2021
Expenditures $50,000
Cash $50,000
To record expenditures for nine months of services
Reserve for encumbrances $54,000
Encumbrances $54,000
To reverse remaining balances in encumbrances and reserve for encumbrances
Appropriations $72,000
Fund balance $72,000
To close the budgetary account
Fund balance $68,000
Expenditures $68,000
To close expenditures
Different types of funds justify different practices as to budgets and commitments. Review the budget note...
The City of South River budget for the fiscal year ended June 30.2020. Included an appropriation for the police department in the amount of $8.712.000. During the month of July 2020, the following transactions occurred in summary: Purchase orders were issued in the amount of $545.000 Of the $545,000 in purchase orders, $502,000 were filled with involces amounting to $492,000. Salaries, not encumbered, amounted to $308.000. A budget appropriations reduction in the amount of $64.000 was approved by the city...
The Edward City Council approved and adopted the budget for its general fund for the year just ended. The budget contained the following amounts: Estimated revenues $4,900,000 Appropriations 4,780,000 Authorized interfund transfer to the sports and recreation debt service fund 90,000 During the year, various transactions and events occurred that affected the general fund. Edward City levied property taxes of $4,000,000, of which it estimated that $25,000 would be uncollectible. During the discount period between the levy and the date...
The town council of Riverside estimated revenues for 2020 to be
$878,412 from property taxes and $211,588 from business licenses.
The appropriations budget from the council was as
follows:
General government
$
411,000
Parks and recreation
142,000
Sanitation
122,000
Streets and sidewalks
192,000
In April, heavy spring rains caused some flooding near the river.
As a result, a picnic area at River’s Edge Park was ruined and
several damaged shops had to shut down. The council adopted an
upward revision...
The Balance Sheet of the General Fund of the City of Monroe as of December 31, 2019 , follow.3.C. This portion of the continuous problem continues the General Fund example by requiring the recording and posting of the budgetary entries. To reduce clerical effort required for the solution use control accounts for the budgetary accounts, revenues. expenditures and encumbrances. Subsidiary accounts are not required. Budget information for the City includes:(1) As of January 1, 2020 , the City Council approved...
Greenville has provided the following information from its General Fund Revenues and Appropriations/Expenditure/Encumbrances subsidiary ledgers for the fiscal year ended. Assume the beginning fund balances are $156 (in thousands) and that the budget was not amended during the year. City of Greenville General Fund Subsidiary Ledger Account Balances (in thousands) For the Fiscal Year Debits Credits Estimated Revenue Taxes 6,048 Fines & Forfeits 303 Intergovernmental Revenue 504 Charges for Services 370 Revenues Taxes 6,056 Fines & Forfeits 308 Intergovernmental Revenue...
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.
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...
[The following information applies to the questions
displayed below.]
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.
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...
Greenville has provided the following information from its
General Fund Revenues and Appropriations/Expenditure/Encumbrances
subsidiary ledgers for the fiscal year ended. Assume the beginning
fund balances are $167 (in thousands) and that the budget was not
amended during the year.
Required
Prepare a General Fund statement of revenues, expenditures, and
changes in fund balance.
Prepare a General Fund schedule of revenues, expenditures, and
changes in fund balance—budget and actual (assume the budget is
prepared on a GAAP basis).
514 308 367...
Required information [The following information applies to the questions displayed below.] 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: $1,943,000 372,000 397,000 62,000 Тахes Licenses and permits Intergovernmental revenue Miscellaneous revenues...
4) A properly prepared schedule of revenues, expenditures, and changes in fund halar budget and actual will include which of the following columns? A) Actual revenue and expenditure amounts on the GAAP basis. B) Actual revenue and expenditure amounts on the budget basis. C) Encumbrances outstanding at year-end. D) Unexpended appropriations. 5) Which of the following would properly be reported in the operating statement of a governmental fund? A) Interest on a tax anticipation note issued and repaid during the...