Solution manual advanced accounting 4e jeter ch17

To download more slides, ebook, solutions and test bank, visit http://downloadslide.blogspot.com CHAPTER 17 ANSWERS TO QUESTIONS The performance of services by nonbusiness organizations is based on social need rather than on the profit motive and there is no conscious or deliberate effort by such organizations to derive a profit from their operations Nonbusiness organizations are not operated for the financial benefit of a specific individual or group of individuals and those who contribute resources to nonbusiness organizations not necessarily benefit proportionately or at all from the services provided by such organizations There is no proprietary interest in nonbusiness organizations and the equity interest in the net assets of such organizations cannot be sold or exchanged A fund is a fiscal and accounting entity with a self-balancing set of accounts recording cash and other financial resources together with all related liabilities and residual equities or balances, and changes therein, which are segregated for the purpose of carrying on specific activities or attaining certain objectives in accordance with special regulations, restrictions, or limitations At any particular point in time the unreserved fund balance of an expendable fund entity represents the balance of financial resources that are available for expenditure for the specified purposes or objectives for which the fund was created Major classifications of increases in expendable fund resources are revenues, debt issue proceeds and transfers from other funds Decreases in expendable fund resources are classified as expenditures or as transfers to other funds In accounting for expendable funds entities revenue is recognized when (1) it can be objectively measured and (2) it is available to finance expenditures of the current period In contrast, in accounting for profit-oriented enterprises revenue is ordinarily not recognized until (1) it can be objectively measured and (2) the earnings process is complete or substantially complete Municipality: Functions – Public Safety Activity – Vice Control Organization Unit – Police Department Object – Travel Functional and activity classifications are recommended for external financial reporting An appropriation is an authorization enacted by a legislative body or granted by a governing board to make expenditures for a specified purpose An encumbrance is an obligation in the form of a purchase order or other commitment that reduces appropriation authority and is formally recorded in the accounting records 17 - To download more slides, ebook, solutions and test bank, visit http://downloadslide.blogspot.com An expenditure is a decrease in the net financial resources of a fund entity incurred to carry out the activities or objectives of the fund A disbursement represents the payment of cash for an expenditure Such payments may precede the expenditure (an advance), coincide with the expenditure (a direct payment), or follow the expenditure (the payment of a liability) An expense is associated with accounting for profit oriented enterprises or proprietary funds and may be defined as an expired cost consumed in the production of revenue An expenditure is associated with accounting for expendable funds entities and is a decrease in the net financial resources of a fund entity incurred to carry out the activities or objectives of the fund In accounting for commercial activities, estimated uncollectible receivables are treated as an expense in the determination of net income In accounting for expendable fund entities, estimated uncollectible taxes are treated as a direct reduction of revenue in the determination of the inflow of financial resources The estimate of uncollectible taxes is treated as a direct reduction of revenue rather than as an expenditure since the failure to collect taxes is not an outflow of financial resources but rather is a reduction in the inflow of financial resources Since there is no appropriation for the amount of estimated uncollectible taxes, it is properly accounted for as a reduction of revenue rather than as an expenditure 10 Since the amount of an appropriation cannot be legally exceeded, the placing of purchase orders and the signing of contracts are critical events in controlling the expenditures of expendable fund entities The financial resources of a fund are said to be encumbered when a transaction is entered into that requires performance on the part of another party before the nonprofit entity becomes liable to perform (expend financial resources) its part of the transaction Encumbrance accounting formally records the reduction of appropriation authority resulting from purchase orders and similar commitments and thus serves to provide an accounting safeguard against the expenditure of financial resources in excess of appropriations There would be no reason to prevent a commercial enterprise from using encumbrance accounting so long as the balance in reserve for encumbrances was offset by the balance in the encumbrances account for reporting purposes However, the compelling need for encumbrance accounting arising from the penalties provided by law for government administrators who expend funds in excess of those appropriated is not a factor in the operation and administration of commercial enterprises 11 The balance in the Reserve for Encumbrances account is not a liability Rather it represents the estimated amount of net financial resources of the fund entity that will be needed in the subsequent year to liquidate obligations entered into under the authority of the current year’s appropriation As such it represents a restriction on the availability of fund resources for future appropriation rather than a liability and is properly reported in the financial statements as a portion (reserved) of the total fund balance 12 There should be columns for the following balances: Appropriations, Encumbrances, Expenditures, Total Encumbrances and Expenditures, and Unencumbered Balance 13 Assets acquired with the resources of an expendable fund entity not represent expendable financial resources but rather reflect the purposes for which the financial resources have been used Thus, they are recorded and reported as expenditures of, rather than as assets of, the expendable 17 - To download more slides, ebook, solutions and test bank, visit http://downloadslide.blogspot.com fund entity Depreciation is not accounted for in the records of an expendable fund entity for the same reasons that fixed assets are excluded from the records of such entities Expenditures, not expenses, are measured in fund accounting Acquisitions of fixed assets require the use of financial resources and are accounted for as expenditures Depreciation of such assets is not a use of the financial resources of an expendable fund entity and thus is not properly recorded in the accounts of such entities Inclusion of depreciation expense in the operating statement of an expendable fund entity would confuse two fundamentally different measurements - expenditures and expenses 14 The adoption of a budget for a general fund is a legislative process that is highly formalized and which results in the formal recording of the budgeted amounts (appropriations) within the framework of the double entry accounting system The adoption of a budget by a commercial unit is also a planning and control device, but the adoption process and the subsequent application of the budget is seldom as formalized or as rigid as it is in governmental accounting 15 There are two principal financial statements recommended for expendable fund entities: (1) a Comparative Balance Sheet and (2) a Comparative Statement of Revenue, Expenditures and Other Changes in Fund Balance These two statements may be accompanied by schedules that present detailed financial data which support and amplify the information summarized in the formal financial statements Supporting schedules may also be used to present budgetary data or to demonstrate compliance with legal provisions 16 In order to determine the total cost of performing a particular function or activity, the total expenditures for such functions or activities would have to be adjusted by reducing the amount of capital expenditures included therein and by adding depreciation expenses relating to the dissipation of services embodied in capital assets utilized to support the function or activity Since capital acquisitions are not distinguished from other expenditures in the records of expendable fund entities and since depreciation is not calculated within the framework of the records of expendable fund entities there may be no reasonable basis for determining the amount or classification of these adjustments Business Ethics Business ethics solutions are merely suggestions of points to address The objective is to raise the students' awareness of the topics, and to invite discussion In most cases, there is clear room for disagreement or conflicting viewpoints Issues to be considered: If pricing is a function of cost, then businesses charging excessive prices can be viewed as following excessive, even obscene pricing strategies Also, there are others visiting the city who are not attending the football game and who might adversely affected (for example, individuals with medical emergencies, ill family members, etc.) On the other hand, the goal of business is to make a profit and take advantage of market opportunities As long as people are aware of the practices, many might argue that the pricing strategy is appropriate Answers to Analyzing Financial Statements AFS 17-1 Assets and liabilities are not classified by current and non-current, because government funds present current financial resources In addition, the typical for-profit balance sheet equation is assets equal liabilities plus equity In the non-profit statement, Assets equal liabilities plus fund balances 17 - To download more slides, ebook, solutions and test bank, visit http://downloadslide.blogspot.com The largest asset is Investments This may seem surprising, but in the general fund capital assets are not recorded The reserve for encumbrances represents the portion of the funds set aside to pay for goods not yet received and services not yet contracted for prior to year-end AFS 17-2 The statement of Revenues, Expenditures, and Changes in Fund Balances focuses on the inflows and outflows of current financial resources and come into and leave from the government When a capital asset is purchased, the entire cost is recognized in the government’s fund (whereas on a for-profit statement the cost is capitalized and depreciation over its useful life) Similarly, when a government repays debt, both the interest and principal payments are reflected on the statement On a for-profit income statement, only interest is recognized as an expense The largest expenditure in the general fund is for police The largest source of revenue is from property taxes When the general fund revenues, expenditures, and other financing sources are added together, the general fund increased by $39,777 Of this amount, $10,851 was transferred in from other parts of the government ANSWERS TO EXERCISES Exercise 17-1 Cash 15,000 Revenue 15,000 Cash 100,000 Revenue 100,000 Encumbrances Reserve for Encumbrances 130,000 Cash 500,000 130,000 Bond Issue Proceeds 500,000 17 - To download more slides, ebook, solutions and test bank, visit http://downloadslide.blogspot.com Exercise 17–1 (continued) Cash 250,000 Revenue 250,000 Expenditures Vouchers Payable 140,000 Reserve for Encumbrances Encumbrances 130,000 140,000 130,000 Exercise 17–2 Estimated Revenues Appropriations Unreserved Fund Balance 4,000,000 Property Tax Receivable Estimated Uncollectible Property Tax Revenue 3,000,000 3,800,000 200,000 120,000 2,880,000 Due From State Revenue 500,000 Encumbrances Reserve for Encumbrances 250,000 Expenditures Vouchers Payable 250,000 Reserve for Encumbrances Encumbrances 250,000 Vouchers Payable Cash 250,000 500,000 250,000 250,000 250,000 250,000 Expenditures Cash 36,000 36,000 Cash 2,050,000 Property Tax Receivable 2,050,000 17 - To download more slides, ebook, solutions and test bank, visit http://downloadslide.blogspot.com Exercise 17–3 Estimated Revenues Appropriations Unreserved Fund Balance 1,950,000 Property Tax Receivable Estimated Uncollectible Property Tax Revenue 1,150,000 Cash 1,080,000 1,800,000 150,000 35,000 1,115,000 Property Tax Receivable 1,080,000 Expenditures Cash 200,000 200,000 Cash 24,000 Revenue 24,000 Encumbrances Reserve for Encumbrances 96,000 96,000 Expenditures Contracts Payable 8,000 Reserve for Encumbrances Encumbrances 8,000 Contracts Payable Cash 8,000 8,000 8,000 8,000 17 - To download more slides, ebook, solutions and test bank, visit http://downloadslide.blogspot.com Exercise 17–4 Revenue Estimated Revenue Unreserved Fund Balance 3,210,000 Appropriations Expenditures Encumbrances Unreserved Fund Balance 2,700,000 3,110,000 100,000 1,960,000 734,000 6,000 Reserve for Encumbrances – 2008 Unreserved Fund Balance Expenditures – 2008 50,000 5,000 Transfers From Other Funds Unreserved Fund Balance Transfers to Other Funds 40,000 50,000 55,000 90,000 Exercise 17–5 Revenue Unreserved Fund Balance Estimated Revenue 1,675,000 15,000 Appropriations Expenditures Encumbrances Unreserved Fund Balance 1,550,000 1,690,000 1,310,000 165,000 75,000 Reserve for Encumbrances – 2007 Expenditures – 2007 Unreserved Fund Balance 35,000 32,000 3,000 Exercise 17–6 Part A Inventory Reserve for Supplies Inventory Part B 65,000 65,000 $350,000 17 - To download more slides, ebook, solutions and test bank, visit http://downloadslide.blogspot.com Exercise 17–7 Part A Expenditures Cash 225,000 225,000 Inventory Reserve for Supplies Inventory Part B 5,000 5,000 Expenditures Cash 225,000 225,000 Inventory Expenditures 5,000 Unreserved Fund Balance Reserve for Supplies Inventory 5,000 5,000 5,000 Part C Unreserved Fund Balance 1/1/ Balance Purchase of Supplies Use of Supplies Setting up of Reserve 12/31/ Balance Purchases Consumption $555,000 (225,000) $555,000 $330,000 (220,000) (5,000) $330,000 Exercise 17–8 Estimated Revenue Appropriations Unreserved Fund Balance 1,900,000 1,850,000 50,000 Property Tax Receivable Estimated Uncollectible Property Taxes (5%) Revenue 955,000 47,750 907,250 Encumbrances Reserve for Encumbrances 16,400 Encumbrances Reserve for Encumbrances 140,000 16,400 140,000 Expenditures Cash 90,000 90,000 17 - To download more slides, ebook, solutions and test bank, visit http://downloadslide.blogspot.com Exercise 17–8 (continued) Due from State Revenue 375,000 375,000 Expenditures Vouchers Payable 135,000 Reserve for Encumbrances Encumbrances 137,000 135,000 137,000 Expenditures Vouchers Payable 16,200 Reserve for Encumbrances Encumbrances 16,400 16,200 16,400 Cash 450,000 Property Tax Receivable 10 11 450,000 Vouchers Payable ($135,000 + $16,200) Cash Reserve for Encumbrances Encumbrances 151,200 151,200 650 650 Exercise 17–9 Estimated Revenue Unreserved Fund Balance Appropriations To record the approved operating budget 565,000 15,000 Property Tax Receivable ($60,000,000/$100) Estimated Uncollectible Taxes (3%) Revenue To record tax levy 600,000 580,000 18,000 582,000 Encumbrances Reserve for Encumbrances To record purchase order for motorcycle 4,200 Expenditures ($4,200 + $425) Vouchers Payable 4,625 Reserve for Encumbrances Encumbrances To record liability for motorcycle received and to remove the encumbrance 4,200 4,200 4,625 17 - 4,200 To download more slides, ebook, solutions and test bank, visit http://downloadslide.blogspot.com Exercise 17–9 (continued) Expenditures Cash To record payment of payroll (an unencumbered expenditure) Cash 20,000 20,000 8,225 Revenue To record receipt of proceeds from sale of equipment Cash 8,225 540,000 Property Tax Receivable To record property tax receipts 540,000 Exercise 17–10 d a d b d c c 17 - 10 To download more slides, ebook, solutions and test bank, visit http://downloadslide.blogspot.com Problem 17–4 Part A Journal Entries Estimated Revenue Appropriations Unreserved Fund Balance 1,600,000 1,530,000 70,000 Due from Trust Fund Transfers from Other Funds 50,000 Transfers to Other Funds Due to Debt Service Fund 80,000 50,000 80,000 Property Tax Receivable Estimated Uncollectible Taxes Revenue 1,500,000 Encumbrances Reserve for Encumbrances 1,400,000 Cash 1,450,000 30,000 1,470,000 1,400,000 Property Tax Receivable 1,450,000 Cash 50,000 Due from Trust Fund 50,000 Expenditures Vouchers Payable 1,380,000 1,380,000 Reserve for Encumbrances Encumbrances 1,360,000 1,360,000 Cash 48,000 Revenue 48,000 Vouchers Payable Cash 1,300,000 1,300,000 Due to Debt Service Fund Cash 80,000 80,000 10 Supplies Inventory Reserve for Supplies Inventory ($100,000 - $75,000 = $25,000) 17 - 15 25,000 25,000 To download more slides, ebook, solutions and test bank, visit http://downloadslide.blogspot.com Problem 17-4 (continued) Part B CITY OF MONTE VISTA The General Fund Preclosing Trial Balance December 31, 2009 Debits $468,000 50,000 Cash Property Tax Receivable Estimated Uncollectible Taxes Supplies Inventory Unreserved Fund Balance Reserve for Supplies Inventory Estimated Revenue Appropriations Transfers from Other Funds Transfers to Other Funds Revenue Encumbrances Reserve for Encumbrances Expenditures Vouchers Payable Total Credits 1,518,000 100,000 $370,000 100,000 1,600,000 1,530,000 50,000 80,000 30,000 40,000 40,000 1,380,000 _ $3,718,000 Part C Closing Entries Revenue Unreserved Fund Balance Estimated Revenue 1,518,000 82,000 Appropriations Expenditures Encumbrances Unreserved Fund Balance 1,530,000 1,600,000 1,380,000 40,000 110,000 Transfers From Other Funds Unreserved Fund Balance Transfers to Other Funds 50,000 30,000 80,000 17 - 16 80,000 $3,718,000 To download more slides, ebook, solutions and test bank, visit http://downloadslide.blogspot.com Problem 17-4 (continued) Part D Financial Statements CITY OF MONTE VISTA The General Fund Balance Sheet December 31, 2009 Assets Cash Supplies Inventory Property Tax Receivable Less Estimated Uncollectible Taxes Total $468,000 100,000 $50,000 30,000 Liabilities and Fund Balance Vouchers Payable Fund Balance: Unreserved ($370,000 - $82,000 + $110,000 - $30,000) Reserve for Encumbrances Reserve for Supplies Inventory Total 80,000 $368,000 40,000 100,000 CITY OF MONTE VISTA The General Fund Statement of Revenue, Expenditures and Changes in Fund Balance For the Year Ended December 31, 2009 Revenue Expenditures Revenues over expenditures $1,518,000 1,380,000 138,000 Other Financing Sources (uses) Transfers From Other Funds Transfers to Other Funds 50,000 (80,000) Increase in Supplies Inventory Increase in Fund Balance (30,000) 25,000 133,000 Fund Balance 1/1/ ($300,000 + $75,000) Fund Balance 12/31 375,000 $ 508,000 17 - 17 20,000 $588,000 508,000 $588,000 To download more slides, ebook, solutions and test bank, visit http://downloadslide.blogspot.com Problem 17–5 Part A Journal Entries Estimated Revenue Appropriations Unreserved Fund Balance 735,000 Property Tax Receivable Estimated Uncollectible Taxes Revenue 590,000 700,000 35,000 Cash 24,000 566,000 35,000 Revenue 35,000 Cash 110,000 Revenue 110,000 Encumbrances Reserve for Encumbrances 642,500 Expenditures Vouchers Payable 455,000 642,500 455,000 Reserve for Encumbrances Encumbrances 470,000 470,000 Expenditures - 2008 Vouchers Payable 28,000 28,000 Cash 570,000 Property Tax Receivable 570,000 Vouchers Payable Cash 475,000 475,000 10 Cash 50,000 Due from Trust Fund 50,000 11 Estimated Uncollectible Taxes Property Tax Receivable 30,000 30,000 17 - 18 To download more slides, ebook, solutions and test bank, visit http://downloadslide.blogspot.com Problem 17-5 (continued) Part B CITY OF FAIRFIELD The General Fund Preclosing Trial Balance December 31, 2009 Debits $720,000 35,000 Cash Property Tax Receivable Estimated Uncollectible Taxes Vouchers Payable Reserve for Encumbrances – 2008 Unreserve Fund Balance Estimated Revenue Appropriations Revenue Encumbrances Reserve for Encumbrances Expenditures Expenditures - 2008 Total Credits $14,000 68,000 30,000 450,000 735,000 700,000 711,000 172,500 172,500 455,000 28,000 $2,145,500 $2,145,500 Part C Closing Entries Revenue Unreserved Fund Balance Estimated Revenue 711,000 24,000 735,000 Reserve for Encumbrances - 2008 Expenditures - 2008 Unreserved Fund Balance 30,000 Appropriations Expenditures Encumbrances Unreserved Fund Balance 700,000 28,000 2,000 455,000 172,500 72,500 17 - 19 To download more slides, ebook, solutions and test bank, visit http://downloadslide.blogspot.com Problem 17-5 (continued) Part D CITY OF FAIRFIELD The General Fund Balance Sheet December 31, 2009 Assets Cash Property Tax Receivable Less Estimated Uncollectible Taxes $720,000 $35,000 14,000 Liabilities and Fund Balance Vouchers Payable Fund Balance Unreserved ($450,000 - $24,000 + $2,000 + $72,500) Reserve for Encumbrances Total 21,000 $741,000 $68,000 $500,500 172,500 673,000 $741,000 CITY OF FAIRFIELD The General Fund Statement of Revenue, Expenditures and Changes in Fund Balance For the Year Ended December 31, 2009 Revenue Expenditures ($455,000 + $28,000) Excess of Revenue over Expenditures Fund Balance - January ($415,000 + $30,000) Fund Balance - December 31 17 - 20 $711,000 483,000 228,000 445,000 $673,000 To download more slides, ebook, solutions and test bank, visit http://downloadslide.blogspot.com Problem 17-6 Part A HUNNINGTON TOWNSHIP Statement of Revenues, Expenditures and Changes in Fund Balance For the Year Ended June 30, 2009 Revenue Expenditures: Current Year’s Appropriation Prior Year’s Appropriation Total Excess of Revenues over Expenditures $760,000a Sale of Equipment Increase (Decrease) in Fund Balance Fund Balance July 1, 2008 Fund Balance June 30, 2009 7,000 12,000 144,000c $156,000d 712,500b 42,500 755,000 5,000 a $700,000 + $60,000 = $767,000 $755,000 - $42,500 = $712,500 c Unreserved fund balance per trial balance Add appropriations Deduct estimated revenue (note 3) Unreserved fund balance - July 1, 2008 Reserve for encumbrances - July 1, 2008 Fund Balance - July 1, 2008 b d Unreserved fund balance per trial balance Add revenue in excess of estimated revenue ($767,000 - $700,000) Deduct expenditures and encumbrances in excess of appropriations [($755,000 + $37,000) - $764,000] Unreserved fund balance - June 30, 2009 Reserve for encumbrances Fund Balance - June 30, 2009 17 - 21 $80,000 720,000 (700,000) 100,000 44,000 $144,000 $80,000 67,000 (28,000) 119,000 37,000 $156,000 To download more slides, ebook, solutions and test bank, visit http://downloadslide.blogspot.com Problem 17-6 (continued) Part B HUNNINGTON TOWNSHIP The General Fund Balance Sheet June 30, 2009 Assets Cash Property Tax Receivable Less Estimated Uncollectible Taxes Accounts Receivable Less Allowance for Uncollectible Accounts Due from Internal Service Fund Total Liabilities and Fund Balance Vouchers Payable Due to Enterprise Fund Fund Balance: Unreserved Reserve for Encumbrances Total $11,000 $107,000 18,000 40,000 4,000 89,000 36,000 50,000 $186,000 $20,000 10,000 $119,000 37,000 17 - 22 156,000 $186,000 To download more slides, ebook, solutions and test bank, visit http://downloadslide.blogspot.com Problem 17-7 Part A Omitted Part B 1A 1B 1C 3A 3B General Journal Entries Estimated Revenue Appropriations Unreserved Fund Balance 2,268,000 2,225,000 43,000 Due from Water and Sewer Fund Transfers From Other Funds 118,000 118,000 Transfers to Other Funds Due to Debt Service Fund 55,000 55,000 Encumbrances Reserve for Encumbrances 1,202,000 Reserve for Encumbrances Encumbrances 1,202,000 Expenditures - 2007 Expenditures Vouchers Payable 80,000 1,085,600 1,202,000 1,202,000 1,165,600 Encumbrances Reserve for Encumbrances 78,000 Cash 92,500 78,000 Revenue 92,500 Property Tax Receivable ($18,500,000 8%) Revenue Allowance for Uncollectible Taxes (2%) Cash 1,480,000 1,450,400 29,600 58,000 Due from Federal Government 10 11 58,000 Due to Debt Service Fund Cash 55,000 55,000 Accounts Receivable Revenue 155,675 155,675 Cash Allowance for Uncollectible Taxes Property Tax Receivable 1,438,455 18,250 1,456,705 Expenditures Cash 998,765 998,765 17 - 23 To download more slides, ebook, solutions and test bank, visit http://downloadslide.blogspot.com Problem 17-7 (continued) 12 Cash 333,650 Revenue 13 333,650 Cash 495,402 Revenue ($98,682 + $130,000) Accounts Receivable Due from Water and Sewer Fund 228,682 148,720 118,000 14A Expenditures Voucher Payable 57,680 14B Vouchers Payable Cash 57,680 15A Reserve for Encumbrances Encumbrances 78,000 15B Expenditures Vouchers Payable 79,280 15C Vouchers Payable Cash 79,280 16 57,680 57,680 78,000 79,280 79,280 Vouchers Payable Cash 1,207,100 1,207,100 17 - 24 To download more slides, ebook, solutions and test bank, visit http://downloadslide.blogspot.com Problem 17-7 (continued) Part C CITY OF ROSENBURG The General Fund Preclosing Trial Balance1 December 31, 2008 Cash Certificates of Deposit Accounts Receivable Supplies Inventory Estimated Revenue Property Taxes Receivable Allowance for Uncollectible Taxes Appropriations Vouchers Payable Transfer from Water and Sewer Fund Transfer to Debt Service Fund Unreserved Fund Balance Reserve for Inventory Reserve for Encumbrances - 2007 Expenditures Revenues Encumbrances Expenditures - 2007 Reserve for Encumbrances Part D Debit $175,632 200,000 35,630 37,600 2,268,000 98,895 Credit $43,500 2,225,000 139,500 118,000 55,000 269,075 37,600 78,500 2,221,325 2,260,907 80,000 _ $5,172,082 $5,172,082 Before adjustment for inventory and accrued interest on certificates of deposit Adjusting Entries 17a Certificates of Deposit ($200,000)(.05) Revenues 17b Inventory Reserve for Inventory ($38,250 - $37,600) 17 - 25 10,000 10,000 650 650 To download more slides, ebook, solutions and test bank, visit http://downloadslide.blogspot.com Problem 17-7 (continued) Part E Part F Closing Entries a Revenue ($2,260,907 + $10,000) Estimated Revenue Unreserved Fund Balance 2,270,907 b Appropriations Expenditures Unreserved Fund Balance 2,225,000 2,268,000 2,907 2,221,325 3,675 c Reserve for Encumbrances - 2007 Unreserved Fund Balance Expenditures – 2007 78,500 1,500 d Transfer from Other Funds Transfer To Other Funds Unreserved Fund Balance 118,000 80,000 55,000 63,000 CITY OF ROSEBURG The General Fund Balance Sheet December 31, 2008 and 2007 Asset Cash Certificates of Deposit Accounts Receivable Due from Federal Government Property Taxes Receivable (Less Allowance for Uncollectible Amounts, 2008 - $43,500; 2007 – $32,150) Supplies Inventory Total Liabilities and Fund Balance Vouchers Payable Fund Balance: Unreserved ($269,075 + $2,907 + $3,675 - $1,500 + $63,000) Reserve for Encumbrances Reserve for Inventory Total Fund Balance Total 17 - 26 2008 $175,632 210,000 35,630 2007 $155,450 200,000 28,675 58,000 55,395 38,250 $514,907 43,450 37,600 $523,175 $139,500 $181,000 337,157 38,250 375,407 $514,907 226,075 78,500 37,600 342,175 $523,175 To download more slides, ebook, solutions and test bank, visit http://downloadslide.blogspot.com Problem 17-7 (continued) Part G CITY OF ROSEBURG Statement of Revenues, Expenditures and other Changes in Fund Balance For the Year Ended December 31, 2008 Revenue Expenditures $2,270,907 2,301,325 Excess of expenditures over revenues (30,418) Transfers from Other Funds Transfers to Other Funds Increase in Supplies Inventory 118,000 (55,000) 650 Increase in Fund Balance Fund Balance 1/1 Fund Balance 12/31 33,232 342,175 $375,407 17 - 27 To download more slides, ebook, solutions and test bank, visit http://downloadslide.blogspot.com Problem 17-8 THE MADRAS SCHOOL DISTRICT General Fund Transactions July 1, 2008 through June 30, 2009 Estimated Revenue Appropriations Unreserved Fund Balance To record the adoption of the budget for the year Property Tax Receivable (given) Revenue from Taxes Estimated Uncollectible Taxes To record tax levy for year Debit 3,000,000 2,980,000 20,000 2,870,000 2,800,000 70,000 Estimated Uncollectible Taxes Property Tax Receivable To record write-off of uncollectible taxes 40,000 40,000 Cash 2,940,000 Property Tax Receivable Miscellaneous Revenue To record cash collection during year 10 Credit 2,810,000 130,000 Encumbrances Reserve for Encumbrances To record encumbrances for current expenditures 2,700,000 2,700,000 Reserve for Encumbrances Encumbrances To reverse encumbrances 2,700,00 Expenditures Vouchers Payable To record vouchers payable 2,700,000 Vouchers Payable Cash To record cash payments during year 2,640,000 Expenditures - Prior Year Vouchers Payable To record expenditures for prior year 58,000 Reserve for Encumbrances Expenditures - Prior Year Fund Balance To close out excess reserve to fund balance 60,000 2,700,000 2,700,000 2,640,000 58,000 17 - 28 58,000 2,000 To download more slides, ebook, solutions and test bank, visit http://downloadslide.blogspot.com Problem 17-8 (continued) 11 12 13 Due to Other Funds Vouchers Payable To record vouchers for payment to other funds 210,000 Expenditures Due to Others Funds To record expenditures for amounts due other funds 142,000 Encumbrances Reserve for Encumbrances To record encumbrances for new contract 17 - 29 210,000 142,000 91,000 91,000 ... associated with accounting for profit oriented enterprises or proprietary funds and may be defined as an expired cost consumed in the production of revenue An expenditure is associated with accounting. .. objectives of the fund In accounting for commercial activities, estimated uncollectible receivables are treated as an expense in the determination of net income In accounting for expendable fund... transaction Encumbrance accounting formally records the reduction of appropriation authority resulting from purchase orders and similar commitments and thus serves to provide an accounting safeguard