ADV.FIN.ACCT. CONNECT+PROCTORIO PLUS
ADV.FIN.ACCT. CONNECT+PROCTORIO PLUS
12th Edition
ISBN: 9781266379017
Author: Christensen
Publisher: INTER MCG
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Chapter 18, Problem 18.9E

Interfund Transfers and Transactions
During 20X8, the following transfer and transactions between funds took place in the City of Matthew.

  1. On March 1. a $12,000 transfer was made from the general fund to establish a building maintenance internal service fund. Matthew uses transfer accounts for this type of transfer.
  2. On April 1, the general fund made an $8,000, six-month loan to the building maintenance service fund.
  3. On April 15, $2,400 was transferred from the general fund to the debt service fund to pay interest.
  4. On May 5, Matthew’s transportation service fund billed the general fund $825 for April services.

Required

  1. Prepare journal entries for the general fund and the other fund invoked at the time of each transfer or transaction
  2. For each transfer or transaction, prepare the appropriate closing entries for the general fund and the other fund involved for the year ended June 30, 20X8.

a.

Expert Solution
Check Mark
To determine

Introduction: Inter-fund transfer are made to fulfill the requirements of the specific fund and are closed at the end of the year. These funds are transferred from general fund account.General fund is the primary fund maintained by the companies for recording all inflows and outflows except which are associated with the special purpose funds. It is mostly the difference between assets and liabilities of the company’s fund.

The journal entries for general fund and other funds for various transfers made during the year.

Explanation of Solution

Journal entries in general fund account for the inter-fund transfers:

    ParticularsAmount ($)Amount ($)
    Building maintenance fund 12000  
    To Cash   12000
    (Being transfer made to building maintenance internal service fund)    
         
    Loan to building maintenance fund 8000  
    To cash   8000
    (Being loan given to building maintenance fund)    
         
    Debt service fund    
    To cash 2400  
    (Being transfer to debt service fund for payment of interest)   2400
         
    Expenses 825  
    To Transportation service fund   825
    (Being expenses incurred from transportation service fund)    
         
    Transportation service fund 825  
    To cash   825
    (Being transportation service transfer from general fund)    

Journal entry in Building maintenance fund for the transfers made from general fund:

    ParticularsAmount ($)Amount ($)
    Cash 12000  
    To general fund transfer   12000
    (Being transfer from general fund account)    
         
    Cash 8000  
    To due from general fund   8000
    (Being loan received from general fund)    

Journal entry in debt service fund for the transfers made from general fund:

    ParticularsAmount ($)Amount ($)
    Cash 2400
    To general fund transfer   2400
    (Being transfer from general fund account)    

Journal entry in internal service fund for the billing made to general fund account:

    ParticularsAmount ($)Amount ($)
    Due from general fund 825  
    To Revenue account   825
    (Being income due from general fund account)    

b.

Expert Solution
Check Mark
To determine

Introduction: Inter-fund transfer are made to fulfill the requirements of the specific fund and are closed at the end of the year. These funds are transferred from general fund account.General fund is the primary fund maintained by the companies for recording all inflows and outflows except which are associated with the special purpose funds. It is mostly the difference between assets and liabilities of the company’s fund.

The journal entries for closing general fund and other funds for various transfers made during the year.

Explanation of Solution

Closing entries for general fund account is as follows:

    ParticularsAmount ($) Amount ($)
    General fund-unreserved 12000  
    To building maintenance fund   12000
    (Being entry for closing the building maintenance fund)    
         
    General fund-unreserved 2400  
    To debt service fund   2400
    (Being entry to close debt service fund)    
         
    General fund-unreserved 825  
    To transportation service fund   825
    (Being entry to close transportation service fund)    

Closing entry for building maintenance fund is as follows:

    ParticularsAmount ($) Amount ($)
    General fund transfer 12000  
    To Net asset   12000
    (Being entry to close general fund)    

Closing entry for debt service fund is as follows:

    ParticularsAmount ($) Amount ($)
    General fund transfer 2400  
    To Fund balance-unreserved   2400
    (Being closing entry for general fund balance)    

Closing entry for Internal service fund is as follows:

    ParticularsAmount ($) Amount ($)
    Revenues 825  
    To Net assets   825
    (Being closing entry for internal service fund)    

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Chapter 18 Solutions

ADV.FIN.ACCT. CONNECT+PROCTORIO PLUS

Ch. 18 - Prob. 18.11QCh. 18 - Prob. 18.12QCh. 18 - Prob. 18.13QCh. 18 - GASB 34 required a budgetary comparison schedule...Ch. 18 - Prob. 18.15QCh. 18 - Prob. 18.1CCh. 18 - Capital Projects, Debt Service, and Internal...Ch. 18 - Prob. 18.1.1ECh. 18 - Prob. 18.1.2ECh. 18 - Prob. 18.1.3ECh. 18 - Prob. 18.1.4ECh. 18 - Prob. 18.1.5ECh. 18 - Prob. 18.1.6ECh. 18 - Prob. 18.1.7ECh. 18 - Prob. 18.1.8ECh. 18 - Prob. 18.1.9ECh. 18 - Prob. 18.1.10ECh. 18 - Prob. 18.1.11ECh. 18 - Prob. 18.1.12ECh. 18 - Multiple-Choice Items on Governmental Funds [AICPA...Ch. 18 - Prob. 18.2.2ECh. 18 - Prob. 18.2.3ECh. 18 - Multiple-Choice Items on Governmental Funds [AICPA...Ch. 18 - Prob. 18.2.5ECh. 18 - Multiple-Choice Items on Governmental Funds [AICPA...Ch. 18 - Multiple-Choice Items on Proprietary Funds [AICPA...Ch. 18 - Prob. 18.3.2ECh. 18 - Prob. 18.3.3ECh. 18 - Prob. 18.3.4ECh. 18 - Prob. 18.3.5ECh. 18 - Prob. 18.3.6ECh. 18 - Prob. 18.3.7ECh. 18 - Prob. 18.3.8ECh. 18 - Prob. 18.3.9ECh. 18 - Prob. 18.4.1ECh. 18 - Prob. 18.4.2ECh. 18 - Prob. 18.4.3ECh. 18 - Prob. 18.4.4ECh. 18 - Prob. 18.4.5ECh. 18 - Prob. 18.4.6ECh. 18 - Prob. 18.4.7ECh. 18 - Prob. 18.4.8ECh. 18 - Prob. 18.5.1ECh. 18 - Prob. 18.5.2ECh. 18 - Prob. 18.5.3ECh. 18 - Prob. 18.5.4ECh. 18 - Prob. 18.5.5ECh. 18 - Prob. 18.5.6ECh. 18 - Prob. 18.5.7ECh. 18 - Prob. 18.5.8ECh. 18 - Capital Projects Fund Entries and Statements The...Ch. 18 - Debt Service Fund Entries and Statements The City...Ch. 18 - Enterprise Fund Entries and Statements Augusta has...Ch. 18 - Interfund Transfers and Transactions During 20X8,...Ch. 18 - Internal Service Fund Entries and Statements...Ch. 18 - Prob. 18.11.1ECh. 18 - Prob. 18.11.2ECh. 18 - Prob. 18.11.3ECh. 18 - Prob. 18.11.4ECh. 18 - Prob. 18.11.5ECh. 18 - Prob. 18.11.6ECh. 18 - Prob. 18.11.7ECh. 18 - Prob. 18.11.8ECh. 18 - Prob. 18.11.9ECh. 18 - Prob. 18.11.10ECh. 18 - Adjusting Entries for General Fund [AICPA Adapted]...Ch. 18 - Entries for Funds [AICPA Adapted] Olivia Village...Ch. 18 - Prob. 18.14PCh. 18 - Prob. 18.15PCh. 18 - Prob. 18.16PCh. 18 - Matching Items Involving Various Funds The...Ch. 18 - Prob. 18.18.1PCh. 18 - Prob. 18.18.2PCh. 18 - Prob. 18.18.3PCh. 18 - Prob. 18.18.4PCh. 18 - Prob. 18.18.5PCh. 18 - Prob. 18.18.6PCh. 18 - Prob. 18.18.7PCh. 18 - Prob. 18.18.8PCh. 18 - Prob. 18.18.9PCh. 18 - Prob. 18.18.10PCh. 18 - Matching Items Involving the Statement of Cash...Ch. 18 - Prob. 18.20PCh. 18 - Matching Items on Fund Transactions [AICPA...Ch. 18 - Major Fund Tests The City of Somerset has the...Ch. 18 - Prob. 18.23PCh. 18 - Prob. 18.24.1PCh. 18 - Prob. 18.24.2PCh. 18 - Prob. 18.24.3PCh. 18 - Prob. 18.24.4PCh. 18 - Prob. 18.24.5PCh. 18 - Prob. 18.24.6PCh. 18 - Prob. 18.24.7PCh. 18 - Prob. 18.24.8PCh. 18 - Prob. 18.24.9PCh. 18 - Prob. 18.24.10PCh. 18 - Prob. 18.24.11PCh. 18 - Prob. 18.24.12PCh. 18 - Prob. 18.24.13PCh. 18 - Prob. 18.24.14PCh. 18 - Prob. 18.24.15PCh. 18 - Prob. 18.25PCh. 18 - Prob. 18.26P
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