Question

P3-3 (Budgetary Comparison Statement) This problem is based on the information about the Murphy County General Fund budgeted and actual transactions and events described in Problem 3-2.

P3-2 (Budgetary and Other Entries—General and Subsidiary Ledgers) The Murphy County Commissioners adopted the following General Fund budget for the 20X8 fiscal year:

Murphy County General FundBudget—20X8
Estimated Revenues:
Taxes	$  8,000,000
Licenses and permits	800,000
Intergovernmental	2,000,000
Charges for services	200,000
Fines and forfeits	400,000
Other	600,000
	12,000,000
Appropriations:
General government	1,000,000
Public safety	4,000,000
Highways and streets	5,000,000
Health and sanitation	900,000
Culture and recreation	400,000
Other	600,000
	11,900,000
Excess of Estimated Revenues over Appropriations	100,000
Fund Balance—Beginning	1,400,000
Fund Balance—Ending (Anticipated)	$ 1,500,000

The following events occurred during 20X8:

1. Purchase orders issued and contracts let were expected to cost:

General government	$  300,000
Public safety	1,200,000
Highways and streets	2,500,000
Health and sanitation	500,000
Culture and recreation	300,000
Other	200,000
	$  5,000,000

2. The commissioners reviewed the budget during the year and (a) revised the estimate of Intergovernmental Revenues to $1,500,000 and reduced the Public safety and Highways and streets appropriations by $225,000 each to partially compensate for the anticipated decline in intergovernmental revenues, and (b) increased the Health and sanitation appropriation by $70,000 because of costs incurred in connection with an unusual outbreak of Tasmanian flu.
3. Revenues (actual) for 20X8 were:

Taxes	$ 8,150,000
Licenses and permits	785,000
Intergovernmental	1,520,000
Charges for services	210,000
Fines and forfeits	395,000
Other	500,000
	$11,560,000

4. Goods and services under purchase orders and contracts were received:

	Estimated Cost	Actual Cost
General government	$ 280,000	$ 278,000
Public safety	900,000	910,000
Highways and streets	2,500,000	2,500,000
Health and sanitation	440,000	440,000
Culture and recreation	300,000	295,000
Other	180,000	181,000
	$4,600,000	$4,604,000

5. The remaining orders are still outstanding.
6. Other expenditures incurred were:

General government	$ 700,000
Public safety	2,560,000
Highways and streets	2,271,000
Health and sanitation	485,000
Culture and recreation	45,000
Other	391,000
	$6,452,000

Required

1. Set up general ledger T-accounts like those in Illustration 3-1 and also revenues and expenditures subsidiary ledgers like those in Illustrations 3-2 and 3-3.
2. Record the Murphy County 20X8 General Fund budget in the general ledger and subsidiary ledger accounts, keying these entries “B” (for budget). Then record the numbered transactions and events, keying these entries by those numbers.

Required

1. Prepare a budgetary comparison statement for the General Fund of Murphy County for the 20X8 fiscal year. The statement should present revenues (by source category), expenditures and encumbrances (by function), and the excess of revenues over (under) expenditures and encumbrances. Use these column headings:
   •       Original Budget
   •       Revised Budget
   •       Actual
   •       Variance—Over (Under)

Assume that no encumbrances were outstanding at the beginning of 20X8.

2. Because encumbrances do not constitute expenditures, some governmental fund budgetary comparison statements omit data on encumbrances. (a) If no encumbrances were outstanding at the beginning of 20X8, what effects would omission of encumbrances data have on the Murphy County General Fund budgetary comparison statement for the 20X8 fiscal year? (b) In what circumstances would including or excluding encumbrances data mislead users of a governmental fund budgetary comparison statement?

Answer 1

P. No. 1 Solution from the data :- Sleptir Now we have to prepare the berdgetary Comparison Statement. - A budgetary Comparision Statement is a financial Statement of general govt. fund, which shows the budgeted and actual expenditure and encumbrance in the form Variance. ) revenue and म step-2 : Prepare the Statement of revenue, expenditures, and changes in fund balances on 6 budgetary basis

2 Varance favorable ! 50,000 15,000 20,000 10,000 (5,000 400,000 100,000 Budgetary comparision statement for the fiscal year of 20x8 original Revised Actual Details budget budget budger Revenues : Taxes 8,000,000 8,000,000 8,150,000 licenses & permit 800,000 800,000 785,000 Antergovernmental 2,000,000 1,500,000 $20,000 200,000 900,000 2,10,000 charge for services 400,000 395,000 fine & forfeils others 600,000 600,000 500,000 Tolal Revenues 12,000,000 1,500,000 11,560,000 Expenditure & encaubrances General Govt. 1,000,000 1,000,000 998,000 public safty 4,000,000 3,775,000 3,770,000 Highways & street 5,000,000 4775,000 4771,000 Health & Sanitation 900,000 970,000 985,600 ecreation 400,000 400,000 340,000 others 600,000 592,000 Total Expenditure 11,900,000 11,520,000 11,456,000 Ences of Revenue 100,000 20,000 Expor liture and encumbron el 60,000 2000 S000 4,000 15,000 60,000 Culture & rea 600,000 8,000 Gu,ooo Over 100,000 120,000

3 Step.3: Calculate the revised budget for public Safely fependiture:- The estimated personal personal Service appropriation for the fiscal year $ 4,000,000. The City Council has decreased the budget by $ 995,000 ܦܘܟܥܘ Revised budget for poblic Safely $ 4,000,000 $ 395,000 $ 3,775,000 Step-4 :- and 7 Calculate the revised budget for highway Street - Highway and Street appropriation for the Cascal year 5,000,000 The City Counot has decreased the budget by $225,000

Revised budget for $5,000,000 - $325,000 highway Estreet $ 4,750,000 2 and Step.s Calculate the devised budget for health Sanitation : - Health and Sanitation appropriation for the fiscal year $ 900,000 The City Council was Inc. the budget by $ 70,000 900,000 + $ 70,000 $ 970,000 please give me "Thomsop!