Question:
Part 1: Research the following statements and write a paper of 500 words on your findings:
What are the key differences between a governmental unit and a commercial company?
Discuss the following terms and how they are used during the budget process of a governmental unit:
- Appropriations
- Encumbrances
- Expenditures
- Budgetary fund balances
Give examples for each of the above terms.
Part 2: Given the following information, create the journal entries required for each of the situations described:
| Estimated revenues |
|
|
|
| Property taxes |
$1,250,000 |
| Fines and forfeits |
80,000 |
| Intergovernmental |
500,000 |
| Total |
$1,830,000 |
|
|
| Appropriations |
|
|
|
| General |
$300,000 |
| Streets |
50,000 |
| Public safety |
800,000 |
| Total |
$1,150,000 |
1. Make the journal entry to record the adoption of the annual budget.
2. Make the journal entries necessary to record the following cash revenues that were received:
| Property taxes |
$800,000 |
| Fines and forfeits |
73,000 |
| Intergovernmental |
300,000 |
| Total |
$1,173,000 |
3. Purchase orders were issued for the following goods and services:
| General |
$285,000 |
| Streets |
50,000 |
| Public safety |
670,000 |
| Total |
$1,005,000 |
4. Purchase orders were fulfilled based upon the following estimated and actual costs:
|
Estimated |
Actual |
|
|
|
| General |
$285,000 |
$280,000 |
| Streets |
50,000 |
50,000 |
| Public safety |
670,000 |
660,000 |
| Total |
$1,005,000 |
$990,000 |