a. Please help with the journal entry recordings. Record the following transactions in the general journal for the General Fund and, if applicable, in the general journal for governmental activities at the government-wide level.
1. Tax anticipation notes were issued in the amount of $400,000.
2. Property taxes were levied in the amount of $6,200,000. It is estimated that 3 percent of the tax will be uncollectible.
3. The General Fund paid $350,000 on the vouchers payable that were outstanding at the end of FY 2013.
4. Purchase orders, contracts, and other commitment documents were issued in the following amounts for the following functions:
General Government $ 394,900
Public Safety 1,143,000
Public Works 915,420
Health and Welfare 663,600
Culture and Recreation 461,080
Miscellaneous 86,000
Total $3,664,000
5. The General Fund collected the following amounts in cash: Delinquent Taxes, $418,000; Interest and Penalties Receivable on Taxes, $20,860; Sales Taxes, $251,000; Licenses and Permits, $468,000; Fines and Forfeits, $605,000; Intergovernmental Revenues, $500,000; Charges for Services, $351,000; and Miscellaneous Revenues, $110,500. For governmental activities at the government-wide level, all Licenses and Permits and Charges for Services were attributable to the General Government function. Fines and forfeits were collected by General Government departments in the amount of $285,000 and by Public Safety departments in the amount of $320,000. Intergovernmental Revenues should be credited to "Program Revenues-General Government-Operating Grants and Contributions."
6. The General Fund paid the $13,000 reported as Due to Other Funds at the end of FY 2013. This amount was reported as Internal Payables to Business -type Activities at the government-wide level.
7. Delinquent taxes receivable in the amount of $26,000 were written off as uncollectible. Interest and penalties accrued on these taxes in the amount of $1,300 were also written off.
8. Collections of current year property taxes totaled $5,964,000.
9. General Fund payrolls totaled $4,199,100. Of that amount, $553,400 was withheld for employees' federal income taxes, $316,000 for employees' FICA tax liability, and $88,100 for state income taxes; the balance of $3,241,600 was paid in cash. Encumbrances are not used for payroll. The payroll amounts by function are as follows:
General Government $ 1,135,066
Public Safety 2,047,942
Public Works 497,464
Health and Welfare 263,538
Culture and Recreation 255,090
Total $4,199,100
10. A liability was recorded in the amount of $321,000 for the city's share of FICA taxes, applicable to functions in the amounts shown below.
General Government $ 86,343
Public Safety 157,363
Public Works 37,842
Health and Welfare 20,047
Culture and Recreation 19,405
Total $321,000
11. Invoices for goods and services ordered in transaction 4-a-4 were received. One of the invoices received was for $51,500 of playground equipment ordered by Culture and Recreation. The equipment meets the city's threshold for capitalization. Vouchers were recorded for the following actual amounts: (Note: At the government-wide level, expenditures charged to miscellaneous are reported as Expenses-General Government.)
Actual Estimated
General Government $ 399,940 $ 392,060
Public Safety 1,123,650 1,128,600
Public Works 902,300 907,620
Health and Welfare 681,200 663,600
Culture and Recreation 438,750 452,000
Miscellaneous 83,600 85,000
Totals $3,629,440 $3,628,880
12. The General Fund paid its liability for employees' federal and state income taxes withheld and the total liability for FICA taxes.
13. The General Fund transferred $90,000 to the debt service fund so the debt service fund could make a bond interest payment. (Note: Because this transaction involves two governmental funds it is not recorded in the governmental activities journal. Do not record this transaction in the debt service fund until instructed to do so in Chapter 6 of this case.)
14. Tax anticipation notes issued by the General Fund were paid at maturity at the face amount plus interest of $10,000. For the General Fund charge Miscellaneous for the interest expenditure. At the government-wide level, debit Expenses-Interest on Tax Anticipation Notes.
15. General Fund paid vouchers during the year in the amount of $3,500,000.
16. The General Fund recorded liabilities of $40,000 to other funds for services received from the Water Utility Fund during the year. Of this amount, $31,000 should be charged to Public Safety and $9,000 to General Government. At the government-wide level, you should credit Internal Payables to Business-type Activities. (Note: Do not record this transaction in the Water Utility Fund until instructed to do so in Chapter 7 of this case.)
17. The balances in the current taxes receivable and related estimated uncollectibles accounts were reclassified as delinquent. Interest and penalties of $52,480 were recorded on the delinquent taxes, of which $10,500 was estimated to be uncollectible.
18. In view of unexpected revenue and expenditure developments the city council revised the budgets for the current year as shown below:
Budget Adjustments
Inc. (Dec.)
Estimated Revenues:
Licenses and Permits $ (10,000)
Charges for Services (6,000)
Miscellaneous Revenue (15,000)
Appropriations:
General Government 125,000
Public Safety 5,000
Public Works (4,000)
Health and Welfare 0
Culture and Recreation (46,000)
Miscellaneous 0
b. Record the following transactions in the general journals of the City Hall Annex Construction Fund and governmental activities at the government-wide level. Do not record entries at this time in any other affected funds; those entries will be made in later chapters of this cumulative problem that cover those funds.
1. On the first day of the 2014 fiscal year (January 1, 2014), the bond issue was sold at 101. Cash in the face amount of the bonds, $6,000,000, was deposited in the City Hall Annex Construction Fund; the premium was deposited in the debt service fund, as required by state law. Make the appropriate entries in the general journals of the Capital Projects Fund and governmental activities at the government-wide level. Wait until instructed in Chapter 6 to make the corresponding entry in the debt service fund.
2. The city invested $3,000,000 of the bond proceeds in 90-day notes.
3. The City Hall Annex Construction Fund purchased land for the annex for $500,000. This amount was vouchered. In the governmental activities general journal at the government-wide level, this purchase should be debited to Land.
4. A contract for architectural services was signed at an estimated amount of $320,000 for the design of the City Hall Annex.
5. Legal and other capitalizable costs of the bond issue were vouchered in the amount of $100,000.
6. Preliminary plans were received (related to the contract signed in paragraph 5-a-3) for which architectural fees of $75,000 were vouchered.
7. Advertisements soliciting construction bids were vouchered at a cost of $4,000.
8. Vouchers payable were recorded in the amount of $260,000 for the final architectural plans and specifications for the construction project (see para. 5-a-4).
9. Construction bids were opened and analyzed. A contract was signed with the firm that submitted the winning bid of $4,000,000. A provision of the contract permits the city to withhold 5 percent of payment pending final acceptance of the completed project.
10. The 90-day notes matured, paying $11,250 in interest (see para. 5-a-2). The interest should be recorded as general revenue in the governmental activities journal.
11. The contractor submitted a billing for $2,000,000. This amount was recorded as a contract payable.
12. The contractor's billing (see para. 5-a-11) was paid, less a 5 percent retained percentage.
13. All pending vouchers were approved and paid.
14. Furniture and equipment for the annex were ordered at an estimated total cost of $685,000.
15. The contractor completed construction, submitted the final bill, and requested payment of the balance due. A liability was recorded in the amount of $2,300,000.
16. After final inspection, a final payment was made to the contractor, including the amount retained in para. 5-a-12.
17. Furniture and equipment were received (see para. 5-a-14) at a total cost of $681,500. Invoices were vouchered for payment. In the governmental activities general journal, you should debit Equipment.
18. The City Hall Annex Construction Fund paid all outstanding liabilities on December 31, 2014. The completed building was recorded in the governmental activities general journal. Remaining cash in the City Hall Annex Construction Fund was transferred to the debt service fund. (Note: Record the transfer of cash in the City Hall Annex Construction Fund general journal. Do not record the transfer in the debt service fund until you are instructed to do so in Chapter 6. This transaction involves two governmental funds.)