Prepare
- a. A new truck for the sanitation department was ordered at a cost of $94,000.
- b. The city print shop did $1,200 worth of work for the school system (but has not yet been paid).
- c. An $11 million bond was issued to build a new road.
- d. Cash of $140,000 is transferred from the general fund to provide permanent financing for a municipal swimming pool that will be viewed as an enterprise fund.
- e. The truck ordered in (a) is received at an actual cost of $96,000. Payment is not made at this time.
- f. Cash of $32,000 is transferred from the general fund to the capital projects fund.
- g. A state grant of $30,000 is received that must be spent to promote recycling.
- h. The first $5,000 of the state grant received in (g) is appropriately expended.
Prepare journal entries for the City of Pudding’s governmental funds to record the following transactions, first for fund financial statements and then for government-wide financial statements.
Explanation of Solution
The journal entries for the City of Pudding’s governmental funds to record the given transactions for fund financial statements are as follows:
Date | Account Title and Explanation | Post ref. | Debit ($) | Credit ($) |
a. | General Fund | |||
Encumbrance Control | 94,000 | |||
Fund Balance-Reserved for encumbrances | 94,000 | |||
(to record the order placed for the new work) | ||||
b. | Expenditures | 1200 | ||
Due to internal service fund | 1200 | |||
(to record the work done but not paid) | ||||
c. | Capital project Fund | |||
Cash | 11,000,000 | |||
Other Financing sources-Bond proceeds | 11,000,000 | |||
(being cash received from issue of bonds to construct a new road) | ||||
d. | General fund | |||
Other Financing Uses-Transfer Out | 140,000 | |||
Cash | 140,000 | |||
(being funds transferred from general fund to enterprise fund) | ||||
e. | General fund | 11,800 | ||
Fund Balance-Reserved for encumbrances | 11,800 | |||
Encumbrances | ||||
(being encumbrance received for the equipment) | ||||
Expenditures: Truck | 96,000 | |||
Vouchers Payable | 96,000 | |||
f. | General fund | |||
Other Financing Uses-Transfer Out | 32,000 | |||
Cash | 32,000 | |||
(being funds transferred from general fund to capital project fund) | ||||
Capital project Fund | ||||
Cash | 30,000 | |||
Other Financing Uses-Transfer in | 30,000 | |||
(being state grant received) | ||||
g. | Special Revenue fund | |||
Cash | 30,000 | |||
Deferred Revenues | 30,000 | |||
(being state grant received) | ||||
h. | Special Revenue fund | |||
Deferred Revenues | 5,000 | |||
Cash | 5,000 | |||
(being grant expended) | ||||
Expenditures | 5,000 | |||
Cash | 5,000 | |||
(being expenses incurred for using state grant recorded) |
Table: (1)
The journal entries for the City of Pudding’s governmental funds to record the given transactions for government-wide financial statements are as follows:
Date | Account Title and Explanation | Post ref. | Debit ($) | Credit ($) |
a. | The entry will be recorded when the truck has been actually received | |||
b. | Intra-entity activity transfers are not recorded in government-wide financial statements | |||
c. | Cash | 11,000,000 | ||
Bonds payable | 11,000,000 | |||
(being cash received from issue of bonds to construct a new road) | ||||
d. | Transfers out-Swimming pool | 140000 | ||
Cash | 140000 | |||
(being funds transferred from general fund to enterprise fund) | ||||
Cash | 140000 | |||
Transfers in-General Fund | 140000 | |||
(being funds transferred from general fund to enterprise fund) | ||||
e. | Expenditures: Truck | 96,000 | ||
Vouchers Payable | 96,000 | |||
(being truck received) | ||||
f. | Intra-entity activity transfers are not recorded in government-wide financial statements | |||
g. | Cash | 30,000 | ||
Deferred Revenues | 30,000 | |||
(being state grant received) | ||||
h. | Deferred Revenues | 5,000 | ||
Cash | 5,000 | |||
(being grant expended) | ||||
Expenditures | 5,000 | |||
Cash | 5,000 | |||
(being expenses incurred for using state grant recorded) |
Table: (2)
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Chapter 16 Solutions
Soft Bound Version for Advanced Accounting 13th Edition
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