Prepare journal entries for a local government to record the following transacti
ID: 2424174 • Letter: P
Question
Prepare journal entries for a local government to record the following transactions, first for fund financial statements and then for government-wide financial statements. (If no entry is required for a transaction/event, select "No journal entry required" in the first account field. Enter your answers in dollars not in millions.)
a. The government sells $904,000 in bonds at face value to finance construction of a warehouse.
b. A $1.07 million contract is signed for construction of the warehouse. The commitment is required if allowed.
c. A $144,000 transfer of unrestricted funds was made for the eventual payment of the debt in (a).
d. Equipment for the fire department is received with a cost of $14,790. When it was ordered, an anticipated cost of $14,400 had been recorded.
e. Supplies to be used in the schools are bought for $2,700 cash. The consumption method is used.
f. A state grant of $105,500 is awarded to supplement police salaries. The money will be paid to reimburse the government after the supplement payments have been made to the police officers.
g. Property tax assessments are mailed to citizens of the government. The total assessment is $680,000, although officials anticipate that 2% will never be collected. There is an enforceable legal claim for this money and the government can use it immediately.
Explanation / Answer
Prepare journal entries for a local government to record the following transactions, first for fund financial statements and then for government-wide financial statements. (If no entry is required for a transaction/event, select "No journal entry required" in the first account field. Enter your answers in dollars not in millions.)
a. The government sells $904,000 in bonds at face value to finance construction of a warehouse.
b. A $1.07 million contract is signed for construction of the warehouse. The commitment is required if allowed.
c. A $144,000 transfer of unrestricted funds was made for the eventual payment of the debt in (a).
d. Equipment for the fire department is received with a cost of $14,790. When it was ordered, an anticipated cost of $14,400 had been recorded.
e. Supplies to be used in the schools are bought for $2,700 cash. The consumption method is used.
f. A state grant of $105,500 is awarded to supplement police salaries. The money will be paid to reimburse the government after the supplement payments have been made to the police officers.
g. Property tax assessments are mailed to citizens of the government. The total assessment is $680,000, although officials anticipate that 2% will never be collected. There is an enforceable legal claim for this money and the government can use it immediately.
Fund financial statements
a. Capital Projects Fund
Cash $904,000
Other Financing Sources-Bonds Proceeds $904,000
b. Capital Projects Fund
Encumbrances $1,070,000
Fund Balance-Reserved For Encumbrances $1070,000
c. General Fund
Other Financing Uses-Transfers Out $144,000
Cash $144,000
Debt Service Fund
Cash $144,000
Other Financing Sources-Transfer In $144,000
d. General Fund
Fund Balance-Reserved for Encumbrances $14,400
Encumbrances $14,400
Expenditures Control-Machinery and Equipment $14,790
Vouchers Payable $14,790
e. General Fund
Inventory of Supplies $2,700
Cash $2,700
f. Special Revenue Fund
Cash $105,500
Deferred Revenues $105,500
g. General Fund
Taxes Receivable $680,000
Revenues Control $666,400
Allowance for Uncollectible Current Taxes $13,600
Government-wide financial statements
a. Governmental Activities
Cash $904,000
Bonds Payable $904,000
b. No entry
c. No entry
d. Governmental Activities
Machinery and Equipment $14,790
Vouchers or Accounts Payable $14,790
e. Governmental Activities
Inventory of Supplies $2,700
Cash $2,700
f. Governmental Activities
Cash $105,500
Deferred Revenues $105,500
g. Governmental Activities
Taxes Receivable $ 680,000
Revenues Control $666,400
Allowance for Uncollectible Current Taxes $13,600