Completethe following problems and exercises, showing all work and submit in the classroom.
1.Long-term Liability Transactions. Following are anumber of unrelated transactions for the Village of Centerville, someof which affect governmental activities at the government-wide level.None of the transactions have been recorded yet.The
General Fund
collected and transferred $750,000 in taxcollections to the debt service fund; $600,000 of this amount was usedto retire outstanding serial bonds and the remainder was used to makethe interest payment on the outstanding serial bonds.A $5,000,000 issue of serial bonds to finance a capital project wassold at 102 plus accrued interest in the amount of
$50,000
. The accruedinterest and the premium were recorded in the debt service fund. Accruedinterest on bonds sold must be used for interest payments; the premiumis designated by state law for eventual payment of bond principal.The debt service fund made a
$110,000
capital lease payment, ofwhich $15,809 was interest. Funds used to make the lease payment camefrom a capital grant received by the special revenue fund.Tax-supported serial bonds with a $2,800,000 par value were issuedin cash to permit partial refunding of a $3,500,000 par value issue ofterm bonds. The difference was settled with $700,000 that had beenaccumulated in prior years in a debt service fund. Assume that the termbonds had been issued several years earlier at par.
000 were issued to fund a streetlight improvement project in a localsubdivision. The bonds are secondarily backed by the village. The first$25,000 installment will be due from property owners six months afterthe initial bond issuance, but no debt payments are due in the firstyear.
Using this information
Prepare in general journal form the necessary entries in thegovernmental activities and appropriate fund journals for eachtransaction. Explanations may be omitted. For each entry you prepare,name the fund in which the entry should be made.2. Serial Bond Debt Service Fund Journal Entries and Financial Statements.As of December 31, 2016, Sandy Beach had $9,500,000 in 4.5 percentserial bonds outstanding.
Cash
of $50
9,000
is the debt service fund’sonly asset as of December 31, 2016, and there are no liabilities. Theserial bonds pay interest semiannually on January 1 and July 1, with
$500,000
in bonds being retired on each interest payment date. Resourcesfor payment of interest are transferred from the General Fund, and thedebt service fund levies property taxes in an amount sufficient to coverprincipal payments.Prepare debt service fund and government-wide entries in generaljournal form to reflect, as necessary, the following information andtransactions for FY 2017.The operating budget for FY 2017 consists of estimated revenues of$1,020,000 and estimated other financing sources equal to the amount ofinterest to be paid in FY 2017. Appropriations must be provided forinterest payments and bond redemptions on January 1 and July 1.Cash was received from the General Fund and checks were written and mailed for the January 1 principal and interest payments.Property taxes in the amount of $1,020,000 were levied (no estimate for uncollectible accounts has been made).Property taxes in the amount of $1,019,000 were collected.Cash was received from the General Fund and checks were written and mailed for the July 1 principal and interest payments.Adjusting entries were made and uncollected taxes receivable werereclassified as delinquent. At the fund level, entries were also made toclose budgetary and operating statement accounts. (Ignore closingentries in the government activities journal.)Prepare a statement of revenues, expenditures, and changes in fundbalances for the debt service fund for the year ended December 31, 2017.
3.Central Garage Internal Service Fund. The City ofAshville operates an internal service fund to provide garage space andrepairs for all city-owned-and-operated vehicles. The Central GarageFund was established by a contribution of $300,000 from the General Fundon July 1, 2016, at which time the land and building were acquired. Thepost-closing trial balance at June 30, 2016, was as follows:
Debits
Credits
Cash$110,000
Due from Other Funds
$9,000
Inventory of Supplies
$90,000
Land
$50,000
Building
$250,000
Allowance for Depreciation–Building
$20,000
Machinery and Equipment
$65,000
Allowance for Depreciation– Machinery and Equipment
$12,000
Vouchers Payable
$31,000
Net Position–Net Investment in Capital
Assets
$333,000
Nets Position–Unrestricted
$178,000
Total
$574,000
$574,000
The following information applies to the fiscal year ended June 30, 2017:
The cost of supplies used during the year ended June 30, 2017, was$110,000. A physical count taken as of that date showed materials andsupplies on hand totaled $72,000 at cost.
Billings totaling $30,000 were received from the enterprise fund forutility charges. The Central Garage Fund paid $27,000 of the amountowed.Depreciation of the building was recorded in the amount of $12,000;depreciation of the machinery and equipment amounted to $8,000.
General Fund
$270,000
Special Revenue Fund
127,000
|
6/30/16 |
6/30/17 |
|
$2,500 |
$3,000 |
|
6,500 |
Using this informationAssume all expenses at the government-wide level are charged to theGeneral Government function. Prepare journal entries to record all ofthe trans- actions for this period in the Central Garage Fund accountsand in the governmental activities accounts.Prepare a statement of revenues, expenses, and changes in netposition for the Central Garage Fund for the period ended June 30, 2017.
Explain what the Central Garage Fund would need to report at thegovernmental activities level, and where the information would bereported.
4.Enterprise Fund Journal Entries and Financial Statements. Following is the June 30, 2016, statement of net position for the City of Bay Lake Water Utility Fund.
CITY OF BAY LAKEWater Utility FundStatement of Fund
Net Position
June 30, 2016
Assets
Current assets:
Cash and investments
$1,775,019
Accounts receivable (net of $13,367 provision for uncollectible accounts)
$306,869
Accrued utility revenue
$500,000
Due from General Fund
$29,311
Interest receivable
$82,000
Total current assets
$2,693,199
Restricted assets:
Cash
$9,193
Capital assets:
Land
$1,780,945
Buildings (net of $3,420,000 in accumulated depreciation)
$5,214,407
Machinery and equipment (net of $5,129,928 in accumulated depreciation)
$8,488,395
Total capital assets (net)
$15,483,747
Total Assets
$18,186,139
Liabilities
Current liabilities:
Accounts payable
$532,047
Interest payable
$131,772
Current portion of long-term debt
$400,000
Total current liabilities
$1,063,819
Liabilities payable from restricted assets:
Customer deposits
$9,193
Long-term liabilities:
Revenue bond payable
$11,600,000
Total Liabilities
$12,673,012
Net Position
Net investment in capital assets
$3,483,747
Unrestricted
$2,029,380
$5,513,127
For fiscal year 2017, prepare general journal entries for the Water Utility Fund using the following information.The amount in the Accrued Utility Revenue account was reversed.Billings to customers for water usage during fiscal year 2017totaled $2,982,557; $193,866 of the total was billed to the GeneralFund.Cash in the amount of $260,000 was received. The cash was for interest earned on investments and $82,000 in accrued interest.Expenses accrued for the period were: management and administration,$360,408; maintenance and distribution, $689,103; and treatment plant,$695,237.Cash receipts for customer deposits totaled $2,427.Cash collections on customer accounts totaled $2,943,401, of which $209,531 was from the General Fund.Cash payments for the period were as follows: Accounts Payable,$1,462,596; interest (which includes the interest payable), $395,917;bond principal, $400,000; machinery and equipment, $583,425; and returnof customer deposits, $912.A state grant amounting to $475,000 was received to help pay for new water treatment equipment.Accounts written off as uncollectible totaled $10,013.The utility fund transferred $800,000 in excess operating income to the General Fund.Adjusting entries for the period were recorded as follows:depreciation on buildings was $240,053 and on machinery and equipmentwas $360,079; the allowance for uncollectible accounts was increased by$14,913; an accrual for unbilled customer receivables was made for$700,000; accrued interest income was $15,849; and accrued interestexpense was $61,406.The Revenue Bond Payable account was adjusted by $400,000 to record the current portion of the bond.Closing entries and necessary adjustments were made to the net position accounts.Prepare a statement of revenues, expenses, and changes in fund netposition for the Water Utility Fund for the year ended June 30, 2017.Prepare a statement of net position for the Water Utility Fund as of June 30, 2017.Prepare a statement of cash flows for the Water Utility Fund as of June 30, 2017.
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