Advanced Accounting - Standalone book
12th Edition
ISBN: 9780077632588
Author: Hoyle
Publisher: MCG
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Textbook Question
Chapter 16, Problem 42P
Chesterfield County had the following transactions. Prepare the entries first for fund financial statements and then for government-wide financial statements.
- a. A budget is passed for all ongoing activities. Revenue is anticipated to be $834,000 with approved spending of $540,000 and operating transfers out of $242,000.
- b. A contract is signed with a construction company to build a new central office building for the government at a cost of $8 million. A budget for this project has previously been recorded.
- c. Bonds are sold for $8 million (face value) to finance construction of the new office building.
- d. The new building is completed. An invoice for $8 million is received and paid.
- e. Previously unrestricted cash of $1 million is set aside to begin paying the bonds issued in (c).
- f. A portion of the bonds comes due and $1 million is paid. Of this total, $100,000 represents interest. The interest had not been previously accrued.
- g. Citizens’ property tax levies are assessed. Total billing for this tax is $800,000. On this date, the assessment is a legally enforceable claim according to the laws of this state. The money to be received is designated for the current period, and 90 percent is assumed to be collectible in this period with receipt of an additional 6 percent during subsequent periods but in time to be available to pay current period claims. The remainder is expected to be uncollectible.
- h. Cash of $120,000 is received from a toll road. This money is restricted for highway maintenance.
- i. The county received investments valued at $300,000 as a donation from a grateful citizen. Income from these investments must be used to beautify local parks.
Expert Solution & Answer
To determine
Prepare the entries first for fund financial statements and then for government-wide financial statements.
Explanation of Solution
The entries in the fund financial statements are as follows:
Date | Account Title and Explanation | Post ref. | Debit ($) | Credit ($) |
a. | General Fund | |||
Estimated Revenue Control | 834,000 | |||
Appropriations control | 540,000 | |||
Estimated Other Financing Uses-Operating transfers | 242,000 | |||
Budgetary balance | 52,000 | |||
(being budget recorded along with spending) | ||||
b. | Capital project Fund | |||
Encumbrance Control | 8,000,000 | |||
Fund Balance-Reserved for encumbrances | 8,000,000 | |||
c. | Capital project Fund | |||
Cash | 8,000,000 | |||
Other Financing sources control | 8,000,000 | |||
d. | Capital project Fund | |||
Fund Balance-Reserved for Encumbrances | 8,000,000 | |||
Encumbrances Control | 8,000,000 | |||
Expenditures Control | 8,000,000 | |||
Contracts Payable | 8,000,000 | |||
Contracts Payable | 8,000,000 | |||
Cash | 8,000,000 | |||
e. | General Fund | |||
Other Financing sources control | 1,000,000 | |||
Cash | 1,000,000 | |||
Debt Service Fund | ||||
Cash | 1,000,000 | |||
Other Financing Resources | 1,000,000 | |||
f. | Debt Service Fund | |||
Expenditures Control-Bonds | 900,000 | |||
Expenditures Control-Interest | 100,000 | |||
Cash | 1,000,000 | |||
g. | General Fund | |||
Property Tax receivable | 800,000 | |||
Revenues-Property Tax | 768,000 | |||
Uncollectable Tax | 32,000 | |||
h. | Special Revenue fund | |||
Cash | 120,000 | |||
Revenue Control | 120,000 | |||
i. | Permanent Fund | |||
Investments | 300,000 | |||
Contribution revenue | 300,000 |
Table: (1)
The entries in the government-wide financial statements are as follows:
Date | Account Title and Explanation | Post ref. | Debit ($) | Credit ($) |
a. | Budgets are not reported in the government-wide financial statements | |||
b. | Commitments are not recorded in the government-wide Financial Statements | |||
c. | Cash | 8,000,000 | ||
bonds payable | 8,000,000 | |||
d. | Buildings | 8,000,000 | ||
Cash | 8,000,000 | |||
e. | Intra-entity activity transfers are not recorded in government-wide financial statements | |||
f. | Bonds payable | 900,000 | ||
Interest expense | 100,000 | |||
Cash | 1,000,000 | |||
g. | Property Tax receivable | 800,000 | ||
Revenues-Property Tax | 768,000 | |||
Uncollectable Tax | 32,000 | |||
h. | Cash | 120,000 | ||
Revenue-Reserved for Highway Maintenance | 120,000 | |||
i. | Investments | 300,000 | ||
Revenues-Donations | 300,000 | |||
Table: (2)
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Chapter 16 Solutions
Advanced Accounting - Standalone book
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