Question

Option #2: Preparing journal entries

The City of Desert Foothills established the following activities after it was founded: General Fund, Governmental Activities, Enterprise Fund, Internal Service Fund, Enterprise Fund, and Permanent Fund. Assign the following transactions to the appropriate activity and explain why you assigned the transaction to the activity.

Cash was transferred from the General Fund to establish a central duplicating Internal Service Fund in the amount of $40,000 in cash and $280,000 in equipment with accumulated depreciation of $90,000.

The city’s General Fund was billed $1250,000 for water and sewage by the Utility Fund. By the last day of the year, the entire amount was paid of the utility bill.

The Internal Service Fund billed the city’s general government function $18,400 for duplicating services and the city’s Utility Fund for $8,700 for services.

A purchase order of $27,000 was created by the general government function for computer equipment.

A payment voucher was approved for $26,400 upon receipt of the equipment and the payment was made.

Assignment: Prepare journal entries for these transactions, but do not include closing entries.

Answer 1

City of Desert Foothills Debit Credit 40,000 2,80,000 Trans, Particulars Internal Service Fund: Cash Equipment Accumulated Depreciation Interfund trasnfer in from General Fund General Fund: Other financing uses- interfund transfer out Cash 90.000 3,20,000 4.10,000 4.10.000 2 12,50.000 12,50,000 12,50.000 12.50,000 12,50.000 Enterprise Fund: Due from other funds Charges for services Cash Due from other funds General Fund: Expenditures-Water & Sewage Due to ultility fund Due to utility fund Cash Govermental Activities: Expenses- Water & Sewage Internal balances Internal balances Cash 12,50.000 12,50.000 12,50.000 12,50.000 12,50.000 12,50.000 12,50.000 3 27.100 27.100 8,700 8,700 Internal Service Fund: Due from other funds Billing to departments Enterprise Fund: Expenses- Administrative services Due from other funds General Fund: Expenditures- duplicating services Due to other funds Govermental Activites: Internal balances Revenue-charges for services 18.400 18,400 27.100 27.100 4 General Fund: Conor Encumbrance Encumbrances outstanding 27.000 27,000 27,000 27,000 26.400 26,400 26,400 General Fund: Encumbrances outstanding Encumbrances Expenditures Vouchers payable Vouchers payable Cash Govermental Activities: Equipment Vouchers payable Vouchers payable Cash 26.400 26.400 26.400 26,400 26,400