Problem 1 - Amber City maintains a general fund, a capital projects fund, and a special revenue fund. During 2005, the City engaged in the following transactions.
Required: Record all transactions in both the appropriate fund journal and the governmental activities journal, as necessary. Be sure to clearly indicate the fund in which the entry is made.
a. The City sold bonds, face value $26 million, at par to finance the construction of a new city hall.
b. The City purchased two new police cars at a total cost of $50,000.
c. The City collected $8,000 in taxes dedicated for the eradication of noxious weeds.
d. The City spent $6,000 on pesticides for noxious weeds.
e. The City acquired a new tractor for $75,000. The City paid $20,000 in cash and signed a note that is due in three years.
Problem 2 - Assume that the City of Pasco maintains its books and records in a manner that facilitates preparation of the fund financial statements. The City engaged in the following transactions related to its general fund during the current fiscal year. The City formally integrates the budget into the accounting records. The City does not maintain an inventory of supplies. All amounts are in thousands.
Required: Prepare, in summary form, the appropriate journal entries.
a. The City Council approved a budget with revenues estimated to be $600 and expenditures of $590.
b. The City ordered supplies at an estimated cost of $25 and equipment at an estimated cost of $20.
c. The City incurred salaries and other operating expenses during the year totaling $550. The City paid for these items in cash.
d. The City received the supplies at an actual cost of $23.
e. The City collected revenues of $595.
Problem 3 - Property Taxes
Assuming that a city maintains its books and records in a manner that facilitates the preparation of the fund financial statements, prepare all necessary journal entries to record the following events related to property tax revenues for the year ended Dec. 31, 2006. The city has adopted the 60-day rule for all revenue recognition for which it is appropriate.
Required: Prepare appropriate journal entries.
a. On Jan. 3, the city council levied property taxes of $1 million to support general government operations, due in two equal installments on June 20 and Dec. 20. The property taxes were levied to finance the 2006 budget, which had been adopted on Nov. 3, 2005. Historically, 2% of property taxes are uncollectible.
b. The City collected the following amounts related to property taxes:
Delinquent 2005 taxes collected in January 2006 $ 11,000
Delinquent 2005 taxes collected in March 2006 12,500
2006 taxes collected in June 2006 540,000
2006 taxes collected in December 2006 400,000
Delinquent 2006 taxes collected in January 2007 10,000
Delinquent 2006 taxes collected in March 2007 15,000
c. Delinquent 2006 property taxes were reclassified as delinquent after the June payment date.
d. $2,000 of 2004 taxes were written off during 2006.
Problem 4 - The City of Jonesboro engaged in the following transactions during the fiscal year ended Sept. 30, 2005.
Required: Record the following transactions related to interfund transfers. Be sure to make ALL necessary entries and to indicate in which fund the entry is being made.
a. The City transferred $300,000 from the general fund to the debt service fund to make the interest payments due during the fiscal year. The payments due during the fiscal year were paid. The City also transferred $150,000 from the general fund to the debt service fund to advance fund the $150,000 interest payment due Oct. 15, 2004.
b. The City transferred $75,000 from the air operations special revenue fund to the general fund to close out the operations of that fund.
c. The City transferred $130,000 from the general fund to the city electric utility enterprise fund to pay for the utilities used by the general and administrative offices during the year.
d. The City transferred the actuarially determined pension contribution of $2 million from the general fund to the City's pension trust fund.
e. The City deposited into the general fund the proceeds of a $5.5 million dollar bond issue. The bonds were sold for $5.6 million.