Devry ACCT567 Homework Week 2

Problem 3-9 Recording General Fund Operating Budget and Operating Transactions
Recording General Fund Operating Budget and Operating Transactions. The Town of Bedford Falls approved a General Fund operating budget for the fiscal year ending June 30, 2011. The budget provides for estimated revenues of $2,700,000 as follows: property taxes, $1,900,000; licenses and permits, $350,000; fines and forfeits, $250,000; and intergovernmental (state grants), $200,000. The budget approved appropriations of $2,650,000 as follows: General Government, $500,000; Public Safety, $1,600,000; Public Works, $350,000; Parks and Recreation, $150,000; and Miscellaneous, $50,000.
Required
a. Prepare the journal entry (or entries), including subsidiary ledger entries, to record the Town of Bedford Falls’s General Fund operating budget on July 1, 2010, the beginning of the Town’s 2011 fiscal year.
b. Prepare journal entries to record the following transactions that occurred during the month of July 2010.
1. Revenues were collected in cash amounting to $31,000 for licenses and permits and $12,000 for fines and forfeits.
2. Supplies were ordered by the following functions in early July 2010 at the estimated costs shown:

3. During July 2010, supplies were received at the actual costs shown below and were paid in cash. General Government, Parks and Recreation, and Miscellaneous received all supplies ordered. Public Safety and Public Works received part of the supplies ordered earlier in the month at estimated costs of $10,700 and $5,900, respectively.

c. Calculate and show in good form the amount of budgeted but unrealized revenues in total and from each source as of July 31, 2010.
d. Calculate and show in good form the amount of available appropriation in total and for each function as of July 31, 2010.

Problem 4-4 Property Tax Calculations and Journal Entries

Property Tax Calculations and Journal Entries. The Village of Darby’s budget calls for property tax revenues for the fiscal year ending December 31, 2011, of $2,660,000. Village records indicate that, on average, 2 percent of taxes levied are not collected. The county tax assessor has assessed the value of taxable property located in the village at $135,714,300.
Required
a. Calculate to the nearest penny what tax rate per $100 of assessed valuation is required to generate a tax levy that will produce the required amount of revenue for the year.
b. Record the tax levy for 2011 in the General Fund. (Ignore subsidiary detail and entries at the government-wide level.)
c. By December 31, 2011, $2,540,000 of the current property tax levy had been collected. Record the amounts collected and reclassify the uncollected amount as delinquent. Interest and penalties of 6 percent were immediately due on the delinquent taxes, but the finance director estimates that 10 percent will not be collectible. Record the interest and penalties receivable. (Round all amounts to the nearest dollar.)

Problem 4-10 The City of Ashland’s General Fund
Operating Transactions, Special Topics, and Financial Statements. The City of Ashland’s General Fund had the following post-closing trial balance at April 30, 2010, the end of its fiscal year:

During the year ended April 30, 2011, the following transactions, in summary form, with subsidiary ledger detail omitted, occurred:
1. The budget for FY 2011 provided for General Fund estimated revenues totaling $3,140,000 and appropriations totaling $3,100,000.
2. The city council authorized temporary borrowing of $300,000 in the form of a 120-day tax anticipation note. The loan was obtained from a local bank at a discount of 6 percent per annum (debit Expenditures for discount).
3. The property tax levy for FY 2011 was recorded. Net assessed valuation of taxable property for the year was $43,000,000, and the tax rate was $5 per $100. It was estimated that 4 percent of the levy would be uncollectible.
4. Purchase orders and contracts were issued to vendors and others in the amount of $2,059,000.
5. The County Board of Review discovered unassessed properties with a total taxable value of $500,000. The owners of these properties were charged with taxes at the city’s General Fund rate of $5 per $100 assessed value. (You need not adjust the Estimated Uncollectible Current Taxes account.)
6. $1,961,000 of current taxes, $383,270 of delinquent taxes, and $20,570 of interest and penalties were collected.
7. Additional interest and penalties on delinquent taxes were accrued in the amount of $38,430, of which 30 percent was estimated to be uncollectible.
8. Because of a change in state law, the city was notified that it will receive $80,000 less in intergovernmental revenues than was budgeted.
9. Total payroll during the year was $819,490. Of that amount, $62,690 was withheld for employees’ FICA tax liability, $103,710 for employees’ federal income tax liability, and $34,400 for state taxes; the balance was paid to employees in cash.
10. The employer’s FICA tax liability was recorded for $62,690.
11. Revenues from sources other than taxes were collected in the amount of $946,700.
12. Amounts due the federal government as of April 30, 2011, and amounts due for FICA taxes, and state and federal withholding taxes during the year were vouchered.
13. Purchase orders and contracts encumbered in the amount of $1,988,040 were filled at a net cost of $1,987,570, which was vouchered.
14. Vouchers payable totaling $2,301,660 were paid after deducting a credit for purchases discount of $8,030 (credit Expenditures).
15. The tax anticipation note of $300,000 was repaid.
16. All unpaid current year’s property taxes became delinquent. The balances of the current tax receivables and related uncollectibles were transferred to delinquent accounts.
17. A physical inventory of materials and supplies at April 30, 2011, showed a total of $19,100. Inventory is recorded using the purchases method in the General Fund; the consumption method is used at the government-wide level.
Required
a. Record in general journal form the effect of the above transactions on the General Fund and governmental activities for the year ended April 30, 2011. Do not record subsidiary ledger debits and credits.
b. Record in general journal form entries to close the budgetary and operating statement accounts.
c. Prepare a General Fund balance sheet as of April 30, 2011.
d. Prepare a statement of revenues, expenditures, and changes in fund balance for the year ended April 30, 2011. Do not prepare the government-wide financial statements.