1. The data presented below were taken from the books and records of the Village of Maxieville. All amounts are in millions. The village encumbers all outlays. As is evident from the data, some goods and services that were ordered and encumbered have not yet been received. City regulations require that all appropriations lapse at year - end.1. Prepare summary entries to record
Village of Maxieville
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Amounts Received
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|
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Estimated
Appropriated
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Amounts
Encumbered
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Estimated
Cost
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Actuals
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Revenue
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|
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Property Taxes
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S23,700
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$23,400
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Sales Taxes
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$11,700
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$10,800
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Licenses
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$900
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$600
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Other
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$2,100
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$1,200
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Total revenues
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$38,400
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$36,000
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Expenditures/Appropriations
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|
|
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General government
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$9,000
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$7,800
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$7,200
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$8,400
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Public safety
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$18,000
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$17,700
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$15,000
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$14,700
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Recreciation
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$3,600
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$3,600
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$2,400
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$2,700
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Health and sanitation
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S6,900
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S6,600
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S6,600
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$6,300
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Total Expenditures/Appropriations
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$37,500
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S35,700
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S31,200
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S32,100
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Excess of estimated revenues over appropriations
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$900
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Beginning unassigned fund balance
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$3,600
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Estimated unassigned ending fund balance
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$4,500
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A. The budget
B. the encumbrance of the goods and services
C. the receipt of the goods and services. All invoices were paid in cash.
D. the actual revenues (all cash receipts)
2. Prepare summary entries to close the accounts
3. What would be the year-end?
A. fund balance (unassigned)
B. Reserve for encumbrance balance (irrespective of how classi?ed)
4. Prepare a schedule in which you compare budgeted to actual revenues and expenditures.
5. A citizen reviews the budget to actual schedule that you have prepared. She comments on the rather substantial favorable variance between budgeted and actual expenditures and questions why the government did not spend the full amount of money that it appropriated. Brie?y explain to her the nature of the variance.