ACG 3501

Government Activity 2
Instructions
Use an Excel spreadsheet to organize the background information provided here in such a
manner as to allow you to answer the questions noted under the Quizzes tab for Government
Activity 2 Part A and Government Activity 2 Part B. For this assignment you are
required to prepare journal entries and post them to T accounts as well as to use the
encumbrance worksheet approach if applicable. Please clearly label all rows and columns in
your spreadsheet and show all calculations. Remember, your formulas in a cell are not visible
when uploaded; therefore, please show and properly label all work using the rows and columns
approach. Your work will be completed more efficiently if you thoroughly review the questions
you are required to answer before attempting to set up your Excel spreadsheet.
Submission of your Excel spreadsheet is a required part of this assignment and is worth a
maximum of 50 points. The remaining 100 points for this assignment are related to the questions
(located under the Quizzes tab 1) that you will need to answer using the background
information provided here. In order to receive points for your spreadsheet, you will need to
attach it and then submit it via the Assignments tab in Webcourses.
Please save your file as an Excel 97-2003 Workbook as webcourses does not like newer
versions of Windows or Microsoft Office. Files saved in a newer version of Excel are not
likely to properly load and will present a problem with grading.
Guidelines for the preparation of your Excel spreadsheet are as follows:
Use only one sheet for your work.
Your name and ACG 3501 section number should appear at the top of the spreadsheet.
Any journal entries are to be in good form (i.e. balanced, debit and credit amounts clearly
delineated, no abbreviations, brief description of the entry, etc.) and posted to T accounts
and/or an encumbrance worksheet as applicable or appropriate.
Order any journal entries in the same order as the background information.
Order any T accounts in proper order by type of accounts. For example, asset accounts
will appear before liabilities, revenues before expenditures, etc. Order any encumbrance
worksheets in the same order as the functions listed in the background information.
Clearly label any columns and rows and show ALL of your work. This means all
components of a formula are to be clearly labeled on separate lines rather than simply
including all the relevant cells and functions in a single cell. In addition, please avoid
using abbreviations that are not generally accepted in the accounting vernacular.
Enable the spreadsheet to allow the instructor to view the formulae used in each cell.
Use commas for all numbers but do not use decimals or places (i.e. one thousand ten
dollars and 20 cents should show as 1,010 not $1,010.20).

Please note that there are two quizzes for this assignment Part A and Part B which coincide with the
information here indicated as Part A and Part B.

The information on your spreadsheet will be used to determine if any partial credit should be
awarded for questions that are missed on the quiz. Therefore it is very important that you
make the information on your spreadsheet easy for someone not familiar with how your brain
thinks to follow the work and easily find your answers.
Background Information
Part A
The following information relates to the Town of Johnsonville for the fiscal years ending 9/30/14
and 9/30/15.
In March 2013, the citizens of Johnsonville approved an additional penny sales tax to be used
to fund debt service requirements associated with the Citys transportation network. During the
spring and summer of 2013, the City Council, City Manager, Public Works Director, City
Engineer, and a citizens committee worked together to identify and prioritize the Citys
transportation needs.
Based on the recommendation of the citizens committee, the City Council authorized an
expansion and extension of Main Street in an amount not to exceed $50,000,000 at its last
meeting in September. The project is to be funded with bonds of $39,000,000, a contribution of
$9,500,000 from the General Fund, and a State grant of $1,500,000 and a separate capital project
fund will be used to account for the project throughout its duration. Upon completion of the
project, any funds remaining in the Capital Project Fund are to be transferred to the Debt Service
Fund.
The following transactions occurred during the fiscal years ending 9/30/14 and 9/30/15.
1. 10/15/13 General Fund transferred $9,500,000 to the newly established Capital Projects
Fund.
2. 3/1/14 Paid architect fees of $2,000,000 associated with the road expansion.
3. 3/31/14 The City issued 5%, 20-year serial bonds dated 3/31/14 in the face amount of
$39,000,000 at 102. Interest is payable semi-annually on March 31 and September 30.
Equal principal payments are due each March 31 with the first principal payment due
3/31/15. According to the Bond Indenture, any premium on the bonds is to be deposited
into a debt service fund and is restricted for debt service (for accounting purposes,
assume the premium is amortized using the straight-line method). The Bond Indenture
also requires the City to transfer any unspent bond proceeds at the end of the construction
project to the Debt Service Fund to be used for debt service.
4. 4/15/14 City Council awarded a $45,000,000 construction contract to the ABC
Construction Company. A purchase order was issued for the full amount of the contract.
5. 6/1/14 The City paid the Electric Utility Fund $500,000 for wiring associated with
street lights to be placed in the right-of-way of the expanded road.
6. 7/15/14 The City received a check from the State Department of Revenue for
$3,500,000 for the penny sales tax collected through 6/30/14.

7. 7/31/14 ABC Construction Company submitted its first progress billing for
$25,000,000. The City Engineer inspects the work performed to date and approves the
pay request in full less 5% for retainage.
8. 8/15/14 The City pays ABC Construction Company the amount billed less the 5%
amount retained.
9. 9/15/14 The City receives $1,500,000 from the State Department of Transportation as a
grant in aid of construction.
10. 9/30/14 Amounts due the bondholders are paid.
11. 1/15/15 - The City received a check from the State Department of Revenue for
$2,500,000 for the penny sales tax collected through 12/31/14.
12. 2/12/15 - ABC Construction Company submitted a final bill for the project in the amount
of $20,000,000. The City Engineer inspects the work performed and finds a 500 foot
section of the road needs to have the asphalt re-applied and approves the pay request in
full less 5% for retainage.
13. 3/1/15 - City employees re-apply asphalt to the section of road at a labor and materials
cost of $500,000 which is paid with funds in the Capital Projects Fund.
14. 3/31/15 Amounts due the bondholders are paid.
15. 4/1/15 Public Works employees purchase and install landscape materials in the total
amount of $1,300,000 which are paid with funds in the Capital Projects Fund.
16. 4/15/15 All amounts due ABC Construction Company are paid.
17. 6/1/15 The expansion of Main Street is complete and all costs incurred have been paid.
18. 9/30/15 Amounts due the bondholders are paid.
Part B
The following information relates to the Town of Johnsonville for the fiscal years ending 9/30/14
and 9/30/15.
Following is selected information from the Statement of Net Position prepared for the Towns
Water and Sewer Utility Fund for the year ended 9/30/14.
1.
2.
3.
4.
5.
6.

Cash and investments

Restricted cash and investments
Accounts receivable customers
Unbilled water and sewer revenues
Accrued interest receivable
Property, plant and equipment
a. Land
b. Buildings
c. Water Plant
d. Sewer Plant
e. Water Lines
f. Sewer Lines
g. Machinery and equipment
h. Construction in progress sewer plant upgrade
7. Accumulated depreciation

1,800,000
1,700,000
450,000
400,000
50,000
500,000
1,500,000
5,000,000
8,000,000
15,000,000
20,000,000
700,000
500,000
15,000,000

8. Accounts payable
9. Liabilities payable from restricted assets customer deposits
10. Accrued interest payable
11. Accrued salaries and benefits
12. Bonds payable current portion
13. Bonds payable long-term portion
14. Net position
a. Net investment in capital assets
b. Restricted - unspent bond proceeds sewer plant upgrade
c. Unrestricted

100,000
200,000
400,000
105,000
600,000
20,000,000
17,100,000
1,500,000
595,000

The following transactions occurred in the Towns Water and Sewer Utility Fund during the
fiscal year ending 9/30/15.
15. Water and sewer revenues billed to customers throughout the year
$
6,000,000
16. Salaries and benefits paid throughout the year - operations
$
1,800,000
17. Salaries and benefits paid throughout the year general/administrative
$
400,000
18. Operating expenses paid throughout the year
$
600,000
19. General/administrative expenses paid throughout the year
$
150,000
20. Investment income received during the year unrestricted investments
$
50,000
21. Investment income received during the year invested customer deposits $
10,000
22. Recorded estimated depreciation based on actual from prior year
$
1,600,000
23. Completed the sewer treatment plant upgrades in progress 9/30/14
$
1,500,000
24. Paid interest on bonds
$
1,200,000
25. Paid principal on bonds
$
600,000
26. Information about water and sewer billings for October and November 2015
a. Amounts billed
i. 10/1/15 for water and sewer service 8/11/15 - 9/10/15
$
155,200
ii. 10/15/15 for water and sewer service 8/25/15 - 9/24/15
$
140,500
iii. 11/1/15 for water and sewer service 9/11/15 - 10/13/15
$
176,550
iv. 11/15/15 for water and sewer service 9/25/15 10/27/15 $
143,000
27. Interest earned but not received on unrestricted fixed income investments $
15,000
28. Interest incurred but not paid on bonds payable
$
200,000
29. Accrued salaries and benefits incurred but unpaid at 9/30/15
$
60,000
30. Unrealized gains due to increase in fair value of
a. Unrestricted investments
$
25,000
b. Restricted investments
$
35,000
31. Actual depreciation expense
$
1,700,000
32. Additional background information
a. During the current year, $5,800,000 was collected from customers for amounts
billed.
b. There was no net change in the number of utility customers from 9/30/14 to
9/30/15.
c. All bonds were issued to construct or acquire property, plant, or equipment for the
Water and Sewer Utility Fund.

d. The Town issued $2,000,000 in bonds in June 2014 to provide funds for sewer
system upgrades estimated to cost $2,000,000.
e. All investments consist of U.S. Treasury bonds, municipal bonds, and stocks
actively traded on U.S. exchanges.
f. No assets were retired, traded, or sold during the year ended 9/30/15.
g. The Town is not required to, and therefore does not, allocate/pay interest earned
on invested customer deposits to customers.
h. For purposes of this assignment, ignore the effects of capitalized interest.
i. Water and sewer services are consumed equally throughout a month.

The following information relates to the Towns governmental funds.

Total change in fund balance for all governmental funds at 9/30/15

100,000

The following transactions occurred during the year related to governmental funds and
government-type activities.
1. General obligation bonds of $5,000,000 were issued on 11/1/14 at 105 the proceeds of
which were used to purchase park land on 12/15/14. All proceeds from the issuance of
the bonds were deposited to the General Fund.
2. An additional $250,000 of general capital assets was purchased during the year.
3. Amounts paid on outstanding general obligation bonds were $500,000 for principal and
$400,000 for interest.
4. Depreciation expense for general capital assets for the year ending 9/30/15 is $3,000,000.
5. At 9/30/15, $90,000 of property taxes receivable was expected to be collected in the
spring of 2016.