Problem- Various funds and accounts groups. The Village of Fay was recently incorporated and began financial operations on July 1, 2018, the beginning got its fiscal year.
The following transactions occurred during this first fiscal year from July 1, 2018, to June 30, 2019:
1. The village council adopted a budget for general operations during the fiscal year ending June 30, 2019. Revenues were estimated at $400,000. Legal authorizations for expenditures were $394,000.
2. Property taxes were levied for $390,000. It was estimated that 2% of this amount would prove to be uncollectible. These taxes were available on the date of the levy to finance current expenditures.
3. During the year, a resident of the village donated marketable securities, valued at $50,000, to the village under the terms of a trust agreement. The agreement stipulated that the principal is to be kept intact. The use of revenue generated by the securities is to be restricted to financing college scholarships for needy students. Revenue earned and received on these marketable securities amounted to $5,500 through June 30, 2019.
4. A general fund transfer of $5,000 was made to establish an Intergovernmental Service Fund to provide for a permanent investment in inventory.
5. The village decided to install lighting in the village park. A special assessment project was authorized to install the lighting at a cost of $75,000. The appropriations was formally recorded. To finance the project, $3,000 is to be transferred from the general fund, and the balance is form special assessments.
6. Assessments were levied for $72,000, with the village contributing $3,000 from the general fund. All assessments and the village contributions were collected during the year.
7. A contract for $75,000 was signed and approved by a village official for the installation of lighting. At June 30, 2019, the contract was completed for $75,000. The contractor was paid all but 5%, which was retained to ensure compliance with the terms of the contract. Encumbrances and other budgetary accounts are maintained.
8. During the year, the internal service fund purchased various supplies at a cost of $1,900.
9. Cash collections recorded by the general fund during the year were as follows:
Property taxes..........................................$386,000
Licenses and permits.................................... 7,000
10. The village council decided to build a village hall, at an estimated cost of $500,000, to replace space occupied in rented facilities. The village does not record project authorizations. It was decided that general obligation bonds bearing 6% would be issued. On June 30, 2019, the bonds were issued at their face value of $500,000, payable in 20 years. No contracts have been signed for this project, and no expenditures have been made.
11. A fire truck, originally approved for purchase by the highest legislative body in the village, was purchased for $150,000, and the voucher was approved. Payment was made through the general fund. This expenditure was previously encumbered for $145,000.
Prepare journal entries to properly record each of the proceedings transactions in the appropriate funds(s) or group of accounts of Fay for the fiscal year ended June 30, 2019. Use the following funds and groups of accounts:
a. General fund
b. Capital projects fund
c. Internal service fund
d. Private-purpose principal fund
e. Private-purpose earnings funds
f. General long-term debt account group
g. General fixed assets account group
Journal entries should be numbered to correspond with the appropriate transactions. Do not prepare closing entries for any fund.