Opening the Books
The City of Smithville has just implemented a new computerized accounting system, which provides files for General Journal entries and posting to appropriate General Ledger/subsidiary ledger accounts. Accounts are provided for both budgetary and actual operating statement accounts and balance sheet accounts for the General Fund, as well as for governmental activities at the government-wide level. Accounts are also provided as appropriate for all other funds used by the City of Smithville. As the City's new accountant (lucky you!), it is your job to enter the City's initial accounting information as of December 31, 2004, and prepare to commence normal operation of the new accounting system effective January 1, 2005.
Required
a. Open the City of Smithville software by choosing [Start]- [Programs]-[City of Smithville]. Click, then either [Open] to open an existing project or [New] to create a new project. If creating a new project, type in your last name as filename or other filename as you desire. You can also specify a drive and folder at this time. When the [Create New Project] window appears, type in your first name, middle initial, and last name and click "Create and Open New Project."
b. If it is not already displayed, select [General Fund] in the Current Accounting Entity window and the [Accounts] view. Verify that the following accounts are listed [Note: In addition to the accounts listed below you will see detail accounts that will be used in subsequent chapters for achieving budgetary control and recording revenues and expenditures detail.] Select the [Journal] view and click the arrow to the right of the box labeled "Account #/Account Description." You should see all of the following General Ledger accounts listed (Note: For purposes of this exercise, dates are omitted from the expenditure and encumbrances accounts as expenditures from two year's appropriations do not occur.).
Cash
Taxes Receivable--Current
Estimated Uncollectible Current Taxes
Taxes Receivable--Delinquent
Estimated Uncollectible Delinquent Taxes
Interest and Penalties Receivable on Taxes
Estimated Uncollectible Interest and Penalties
Due from Other Funds
Due from State Government
Estimated Revenues
Revenues
Vouchers Payable
Tax Anticipation Notes Payable
Due to Other Funds
Due to Federal Government
Due to State Government
Appropriations
Expenditures
Encumbrances
Reserve for Encumbrances
Fund Balance
c. The Trial Balance of the General Fund of the City of Smithville as of December 31, 2004, is shown on the following page. Select the [Journal] view and create a journal entry to enter the balance sheet accounts and amounts shown in the trial balance [Review software operating procedures in Chapter 1 of this manual if necessary]. Be sure to enter 2004 from the drop-down [Year] menu and enter the paragraph number from these instructions in the [Transaction Description] box of the [Journal] view. For this entry you should enter 2-c. Select the appropriate accounts individually and insert the appropriate amounts. It is recommended that you enter all debit accounts first, then all credit accounts. [Note: Enter all dollar amounts without dollar signs and without commas. All amounts in this project should be rounded to the nearest whole dollar.]
You must enter each account and amount one line at a time by clicking [Add Entry].
The year and transaction description need only be entered for the first line of the journal entry; it will remain in the boxes for the rest of the accounts. When you have completed entering all account data and amounts, verify all your entries, including date and paragraph numbers, prior to posting the journal entries to the General Ledger. When you are sure that entries are correct, then click Post Entries to post the items to the General Ledger of the General Fund. Keep in mind that editing is simple before you post the entries, but is not permitted after entries have been posted. After posting, you must make and post correcting journal entries to make changes to any general or subsidiary ledger accounts.
Select [Reports, Trial Balances, Post-Closing Trial Balance] and print the post- closing trial balance for year 2004. Retain the printed trial balance in your personal cumulative folder until the due date assigned by your instructor for the project.
CITY OF SMITHVILLE
General Fund Post-Closing Trial Balance
As of December 31, 2004
General Ledger
|
Account Title
|
Debits
|
Credits
|
|
Cash
|
$118,280
|
|
|
Taxes Receivable--Delinquent
|
275,420
|
|
|
Estimated Uncollectible
|
|
|
|
Delinquent Taxes
|
|
$ 62,200
|
|
Interest and Penalties
|
|
|
|
Receivable on Taxes
|
41,300
|
|
|
Estimated Uncollectible
|
|
|
|
Interest and Penalties
|
|
12,400
|
|
Due from State Government
|
500,000
|
|
|
Vouchers Payable
|
|
330,500
|
|
Tax Anticipation Notes
|
|
|
|
Payable
|
|
250,000
|
|
Fund Balance
|
|
279,900
|
|
Totals
|
$935,000
|
$935,000
|
d. Select [Governmental Activities-Government-Wide] in the Current Fund window and the [Accounts] view. You will see all of the accounts included in the preceding trial balance, plus many other accounts that will be used in the various chapters of the City of Smithville project.
e. Select the [Journal] view and create a journal entry to enter the statement of net assets (i.e., balance sheet) accounts and amounts shown in the following trial balance. It is necessary to enter these items in the general journal and general ledger for the governmental activities category at the government-wide level as these comprise a separate "set of books" from those for the General Fund. Be sure to enter 2004 from the drop-down date menu, and select the accounts individually and insert the appropriate amounts. Again, it is recommended that you enter all debit accounts first, then all credit accounts. When you have completed entering the initial data, verify its accuracy and click [Post Entries] to post the entry to the Governmental Activities, Government-wide General Ledger.
Select [Reports, Trial Balances, Post-Closing Trial Balance] and report the trial balance for 2004. Retain in your cumulative file until the due date for your project or the time specified by your instructor.
CITY OF SMITHVILLE
Governmental Activities
Government-Wide Level Post-Closing
Trial Balance
As of December 31, 2004
General Ledger
|
Account Title
|
Debits
|
Credits
|
|
Cash
|
$ 118,280
|
|
|
Taxes Receivable--Delinquent
|
275,420
|
|
|
Estimated Uncollectible
|
|
|
|
Delinquent Taxes
|
|
$ 62,200
|
|
Interest and Penalties
|
|
|
|
Receivable on Taxes
|
41,300
|
|
|
Estimated Uncollectible
|
|
|
|
Interest and Penalties
|
|
12,400
|
|
Due from State Government
|
500,000
|
|
|
Land
|
3,700,000
|
|
|
Buildings
|
6,640,000
|
|
|
Accumulated Depreciation-Buildings
|
|
1,854,000
|
|
Equipment
|
2,735,000
|
|
|
Accumulated Depreciation-Equipment
|
|
980,000
|
|
Improvements Other Than Buildings
|
4,780,000
|
|
|
Accumulated Depreciation-Improvements
|
|
|
|
Other Than Buildings
|
|
1,160,000
|
|
Vouchers Payable
|
|
330,500
|
|
Tax Anticipation Notes Payable
|
|
250,000
|
|
Net Assets-Invested in Capital Assets,
|
|
|
|
Net of Related Debt
|
|
13,861,000
|
|
Net Assets--Unrestricted
|
|
279,900
|
|
Totals
|
$18,790,000
|
$18,790,000
|