Chapter 20 ACCOUNTING FOR STATE AND LOCAL GOVERNMENTAL UNITS GOVERNMENTAL FUNDS Questions 1 The governmental fun a!!

!ount"ng e#uat"on "$% Current A$$et$ & Current L"a'"l"t"e$ ( Fun )alan!e 2 GAS) *+ no longer allo,$ the u$e of -re$erve . or -unre$erve . fun 'alan!e/ The allo,a'le !la$$"f"!at"on$ are non$0en a'le1 re$tr"!te 1 !omm"tte 1 a$$"gne an una$$"gne / Ta20a3er$ are '"lle the full 45661666/ The amount re!or e a$ Revenue ,oul 'e 478+1666 ,"th 491666 re!or e a$ Allo,an!e for Un!olle!t"'le Ta2e$/ Encumbrance mean$ -!omm"tment1. an en!um'ran!e a!!ount"ng re!or $ !omm"tment$ ma e for goo $ on or er an for un0erforme !ontra!t$ "n or er to 0rov" e a "t"onal !ontrol over e20en "ture$/ The re#u"re governmental fun f"nan!"al $tatement$ "n!lu e a $tatement of net a$$et$ or 'alan!e $heet an a $tatement of revenue$1 e20en "ture$1 an !hange$ "n fun 'alan!e/ The fun f"nan!"al $tatement$ for the governmental fun $ are 0re0are on the mo "f"e a!!rual 'a$"$ of a!!ount"ng/ Ca0"tal 0ro:e!t$ fun $ are u$e to a!!ount for the f"nan!"ng an a!#u"$"t"on of !a0"tal fa!"l"t"e$ or other !a0"tal a$$et$ ;general f"2e a$$et$< of a governmental un"t/ The3 are not u$e to a!!ount for the a!#u"$"t"on of !a0"tal fa!"l"t"e$ f"nan!e through "nternal $erv"!e or enter0r"$e fun $/ General f"2e a$$et$ ma3 'e 0ur!ha$e through the general fun or $0e!"al revenue fun $/ General f"2e a$$et$ ma3 'e a!#u"re '3 onat"on "n ,h"!h !a$e the !a0"tal 0ro:e!t$ fun ,oul not l"=el3 'e "nvolve / Ca0"tal 0ro:e!t$ fun $ ma3 re!e"ve re$our!e$ from numerou$ $our!e$ $u!h a$ the 0ro!ee $ of general o'l"gat"on 'on "$$ue$1 $tate an fe eral grant$1 $hare revenue$1 an tran$fer$ from other fun $/ A C>F "$ term"nate ,hen the !a0"tal fa!"l"t"e$ have 'een a!#u"re an 0ro:e!t l"a'"l"t"e$ $ettle / Th"$ ma3 "nvolve a $hort 0er"o of t"me "n the !a$e of a$$et$ a!#u"re '3 0ur!ha$e an $everal 3ear$ "n the !a$e of a$$et$ a!#u"re '3 !on$tru!t"on/ A$$et$ rema"n"ng after a !a0"tal 0ro:e!t ha$ 'een !om0lete an 0a" for are or "nar"l3 tran$ferre to the general fun or to the e't $erv"!e fun ,"th re$0on$"'"l"t3 for $erv"!"ng the e't "$$ue to f"nan!e the 0ro:e!t/ A government ma3 treat $u00l3 a!#u"$"t"on$ a$ e20en "ture$ e"ther ,hen 0ur!ha$e 2011 Pearson Education, Inc. publishing as Prentice Hall

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20-2 ;purchases method< or ,hen u$e ;consumption method<1 a$ long a$ "t re0ort$ $"gn"f"!ant amount$ of "nventor3 "n the 'alan!e $heet/ ?h"le the !on$um0t"on metho "$ $"m"lar to the manner "n ,h"!h !ommer!"al 'u$"ne$$e$ re!or $u00l"e$1 the 0ur!ha$e$ metho 'etter allo,$ for !om0ar"$on of e20en "ture$ an a00ro0r"at"on$/ Un er the 0ur!ha$e$ metho 1 a government ,"th $"gn"f"!ant "nventor3 'alan!e$ at 3ear@en ,"ll re!ogn"Ae the 'alan!e$ a$ a$$et$ "n the fun 'alan!e $heet an e$ta'l"$h an a!!om0an3"ng fun 'alan!e@non$0en a'le to refle!t the fa!t that the $u00l3 amount "$ not an ava"la'le f"nan!"al a$$et/ 9 De't $erv"!e fun $ ma3 'e u$e to a!!ount for e't $erv"!e on an3 long@term1 general government l"a'"l"t"e$ "n!lu "ng e't $erv"!e on $0e!"al a$$e$$ment e't for ,h"!h the government "$ o'l"gate "n $ome manner/ De't "$$ue for an "nten e to 'e re0a" from re$our!e$ of enter0r"$e1 "nternal $erv"!e1 or tru$t fun $ "$ a!!ounte for "n tho$e fun $/ A tran$fer of re$our!e$ '3 the general fun to the e't $erv"!e fun to 'e u$e to ret"re all or a 0ort"on of the general long@term e't ,oul affe!t the general fun an the e't $erv"!e fun at the $ame t"me/ A$$um"ng that the amount of the tran$fer "$ 47616661 the entr"e$ ,oul 'e% GF Nonre!"0ro!al o0erat"ng tran$fer to e't $erv"!e fun Ca$h DSF Ca$h Nonre!"0ro!al o0erat"ng tran$fer from general fun 11 761666 761666 761666 761666

10

S0e!"al a$$e$$ment lev"e$ are !harge$ ma e aga"n$t $0e!"f"! 0ro0ert3 o,ner$ ;or !"t"Aen$< to 0a3 for "m0rovement$ ;or $erv"!e$< that 0rov" e $0e!"al 'enef"t$ to the 0ro0ert3 o,ner$/ Su!h "m0rovement$ are u$uall3 re#ue$te '3 tho$e ,ho re!e"ve the 'enef"t$ an agree to 0a3 the"r $hare of the !o$t/ General ta2 lev"e$ are lev"e aga"n$t all !"t"Aen$ of the governmental un"t on a un"form 'a$"$ to f"nan!e the general !o$t of government/ General ta2 lev"e$ are eterm"ne '3 ele!te off"!"al$1 a00l3 to all ;or v"rtuall3 all< 0ro0ert3 "n the :ur"$ "!t"on1 an ma3 have l"ttle or no relat"on$h"0 to the a!tual 'enef"t$ re!e"ve '3 "n "v" ual ta20a3er$/ A f"nal "fferen!e "$ that 0ro0ert3 ta2e$ are lev"e ea!h 3ear for that 3ear ;or $omet"me$ the follo,"ng 3ear</ S0e!"al a$$e$$ment lev"e$ often are for amount$ to 'e !olle!te over $everal 3ear$/ Ca0"tal 0ro:e!t fun $ are u$e to a!!ount for the !on$tru!t"on a!t"v"t"e$ of general government $0e!"al a$$e$$ment 0ro:e!t$ an the e't $erv"!e fun "$ u$e to a!!ount for the relate e't $erv"!e "f the government "$ obligated in some manner/ De't $erv"!e for $0e!"al a$$e$$ment l"a'"l"t"e$ for ,h"!h the government "$ not obligated in any manner "$ a!!ounte for "n agen!3 fun $1 ,"th the $0e!"al a$$e$$ment o'l"gat"on 'e"ng "$!lo$e "n note$ to the f"nan!"al $tatement$/ 2011 Pearson Education, Inc. publishing as Prentice Hall

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20-3 13 ?hen government$ enter "nto !a0"tal lea$e agreement$1 the governmental fun a!#u"r"ng the general f"2e a$$et re!or $ an e20en "ture an other f"nan!"ng $our!e1 a$ "f long@term e't ha 'een "$$ue / At the $ame t"me1 the to,n note$ a l"a'"l"t3 ;!a0"tal lea$e 0a3a'le< "n the general long@term e't a!!ount re!or $ for the amount rema"n"ng ue an a $ an a$$et to the general f"2e a$$et a!!ount re!or $ at the 0re$ent value of the m"n"mum lea$e 0a3ment$ eterm"ne '3 FAS) 7B !r"ter"a/ The a$$et an l"a'"l"t31 a$ ,ell a$ a$$o!"ate e0re!"at"on1 ,"ll a00ear "n the government@," e f"nan!"al $tatement$C ho,ever1 onl3 an e20en "ture an other f"nan!"ng $our!e a00ear "n the governmental fun $tatement$/ The to,n ma3 re!or future !a0"tal lea$e 0a3ment$ a$ e20en "ture$ of 0r"n!"0al an "ntere$t "n the general fun or tran$fer re$our!e$ to the e't $erv"!e fun 1 ,h"!h ,"ll re!ogn"Ae the e20en "ture$/ The note$ to the f"nan!"al $tatement$ "$!lo$e m"n"mum lea$e 0a3ment$ for ea!h of the follo,"ng f"ve 3ear$ an "n f"ve@3ear "n!rement$ thereafter/ E20en "ture$ +561666 Su00l"e$ Inventor3 To a :u$t the $u00l"e$ "nventor3 an $u00l"e$ e20en "ture$ a!!ount$/

14 +561666

The !lo$"ng an re!la$$"f"!at"on entr"e$ ,"ll re$ult "n a 561666 e!rea$e "n Fun 'alan!e@ non$0en a'le $u!h a$ 'elo,/ Note ho, the amount of una$$"gne fun 'alan!e that ,a$ -u$e u0. "n th"$ 3ear "$ the amount a!tuall3 $0ent on $u00l"e$ ;4+661666< ,h"le the amount "n the e20en "ture$ a!!ount ;4+561666< "$ the amount !on$ume ur"ng the 3ear/ The "fferen!e "$ refle!te "n the 4561666 e!rea$e "n the fun 'alan!e@non$0en a'le a!!ount/ Fun 'alan!e & non$0en a'le Fun 'alan!e & una$$"gne E20en "ture$ To !lo$e an re!la$$"f3 $u00l3 e20en "ture$/ 15 561666 +661666 +561666

Government$ re!or eta"l$ of the 0lanne revenue$ ;$u!h a$ 0ro0ert3 ta2e$1 $ale$ ta2e$1 an l"!en$e revenue< an a00ro0r"at"on$ ;$u!h a$ 0ol"!e $u00l"e$1 ma3orD$ off"!e e20en$e$1 an ma"ntenan!e of the to,n hall< "n $u'$" "ar3 revenue an e20en "ture le ger$/ The eta"l allo,$ for 'etter !ontrol over e20en "ture$1 a$ a00ro0r"at"on$ !an 'e !om0are to e20en "ture$ an en!um'ran!e$ at an3 t"me/ The amount that !"t3 off"!"al$ !an or er 0r"or to 3ear en "$ 4E*1666 ;45*61666 & 47E*1666</ If the3 have not $0ent the full 45*61666 "n a00ro0r"at"on$ 0r"or to 3ear en 1 e0en "ng on the la,$ of the V"llage of Le$ter1 all a00ro0r"at"on$ la0$e at the en of the 3ear for ,h"!h the3 are ma e1 ,"th the e2!e0t"on of !omm"tte a00ro0r"at"on$ ;en!um'ran!e$ out$tan "ng<1 ,h"!h !an !ont"nue to $erve a$ author"Aat"on$ for "tem$ on or er or un er !ontra!t/ S"n!e government$ are longer allo,e to re0ort -re$erve for en!um'ran!e$. "n the f"nan!"al $tatement$ ue to GAS) *+1 the government ,"ll nee to e$ta'l"$h a 0ol"!3 for ho, to re!or an re0ort on out$tan "ng !omm"tment$ at the en of the 3ear/ One a00roa!h "$ to rever$e all of the en!um'ran!e$ an relate re$erve for 2011 Pearson Education, Inc. publishing as Prentice Hall

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20-4 en!um'ran!e$ an re0ort the !omm"tment$ a$ Fun 'alan!e@!omm"tte / 17 Permanent funds ;>F< a!!ount for !ontr"'ut"on$ for ,h"!h the grantor $0e!"f"e$ that a 0r"n!"0al amount mu$t 'e ma"nta"ne 'ut for ,h"!h "ntere$t a!!umulat"on or a$$et a00re!"at"on1 or 'oth1 are to 'e u$e for a $0e!"f"e 0ur0o$e/ Fun $ that are e20en a'le are a!!ounte for "n a $0e!"al revenue fun / If !ontr"'ut"on$ 'enef"t 0art"e$ e2ternal to the government1 the3 are a!!ounte for "n 0r"vate 0ur0o$e tru$t fun $/ The general fun "$ al,a3$ a ma:or fun / Other fun $ are !on$" ere ma:or fun $ "f the3 meet 'oth of the follo,"ng !r"ter"a% 7/ Total a$$et$1 l"a'"l"t"e$1 revenue$1 or e20en "ture$Fe20en$e$ ;e2!lu "ng e2traor "nar3 "tem$< of that "n "v" ual governmental or enter0r"$e fun are at lea$t 76G of the !orre$0on "ng total ;a$$et$1 l"a'"l"t"e$1 et!/< for all fun $ of that !ategor3 or t30e/ Total a$$et$1 l"a'"l"t"e$1 revenue$1 or e20en "ture$Fe20en$e$ ;e2!lu "ng e2traor "nar3 "tem$< of that "n "v" ual governmental or enter0r"$e fun are at lea$t *G of the !orre$0on "ng total for all governmental an enter0r"$e fun $ !om'"ne /

18

5/

19

A 'u getar3 !om0ar"$on $!he ule1 ,h"!h "$ re#u"re $u00lementar3 "nformat"on for the general fun an for all $0e!"al revenue fun $ ,"th legall3 a o0te 'u get$1 "n!lu e$ !olumn$ for the or"g"nal 'u get1 the f"nal 'u get1 a!tual 'alan!e$ ;on the 'u getar3 'a$"$< an var"an!e$ ;o0t"onal</ The 'u getar3 !om0ar"$on $!he ule "n!lu e$ the $ame !la$$"f"!at"on$ a$ the GAA> o0erat"ng $tatement1 ho,ever1 the amount$ re0orte for revenue$1 e20en "ture$1 an fun 'alan!e$ often "ffer 'et,een the t,o $tatement$/ D"fferen!e$ e2"$t ,hen a government u$e$ a non@GAA> 'a$"$ of a!!ount"ng for 'u get"ng 0ur0o$e$/ It $houl 'e "n!lu e "n a CAFR/ S"n!e the government@," e $tatement$ are 0re0are on the a!!rual 'a$"$ of a!!ount"ng ,h"le the fun f"nan!"al $tatement$ for the governmental fun $ are 0re0are on the mo "f"e a!!rual 'a$"$ of a!!ount"ng1 government$ mu$t !onvert governmental fun f"nan!"al "nformat"on to the a!!rual 'a$"$ of a!!ount"ng for "n!lu$"on "n the government@ ," e $tatement$ of a!t"v"t"e$ an net a$$et$/ A !onver$"on ,or=$heet "$ an o0t"onal tool that fa!"l"tate$ re!on!"l"at"on of the t,o $tatement$/ E2am0le$ of "tem$ that m"ght a00ear on the re!on!"l"at"on 'et,een the governmental fun 'alan!e $heet an the government@," e $tatement of net a$$et$ "n!lu e% 7/ 5/ B/ Governmental fun f"2e a$$et$ are re!or e a$ e20en "ture$ "n the fun $tatement$ an mu$t 'e re!or e at !o$t "n the government@," e $tatement$/ The e0re!"at"on a$$o!"ate ,"th the governmental f"2e a$$et$ mu$t 'e re!or e "n the government@," e $tatement$/ Ca0"tal 0ro:e!t fun !on$tru!t"on e20en "ture$ $houl 'e re!or e a$ an a$$et -!on$tru!t"on "n 0rogre$$. "n the government@," e $tatement$/

20

21

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20-5 E2am0le$ of "tem$ that m"ght a00ear on the re!on!"l"at"on 'et,een the governmental fun o0erat"ng $tatement an the government@," e $tatement of a!t"v"t"e$ "n!lu e% 7/ 5/ B/ Government$ mu$t a :u$t for "n$tan!e$ ,here revenue re!ogn"t"on "ffer$ 'et,een the mo "f"e a!!rual an a!!rual 'a$e$ of a!!ount"ng/ It "$ ne!e$$ar3 to el"m"nate "nterfun 'alan!e$ ,"th"n the governmental fun $/ )on 0ro!ee $ 0rov" e !urrent f"nan!"al re$our!e$ "n the fun $tatement1 'ut "$$u"ng e't "n!rea$e$ long@term l"a'"l"t"e$ "n the $tatement of net a$$et$/

EXE !"#E# E20$1 7 5 B + * E20$4 7 5 B + * a ! a ' a ' ' a ! E20$2 7 5 B + * ! a ' ' 7 5 B + * ' ! a E20$3 %&"!P& adapted'

E20$5 %&"!P& adapted' 7 ! 5 ! B ' + * '

E20$6 %&"!P& adapted' 7 ! 5 ' B ! + ' * !

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20E20$7 1 Journal entries to account for property taxes in the general fund March 21 2011 Ta2e$ re!e"va'le !urrent Allo,an!e for un!olle!t"'le !urrent ta2e$ Revenue To re!or the 0ro0ert3 ta2 lev3/ May ! 2011 Ca$h Ta2e$ re!e"va'le !urrent To re!or !olle!t"on of 0ro0ert3 ta2e$/ Ta2e$ re!e"va'le@ el"n#uent Allo,an!e for un!olle!t"'le !urrent ta2e$ Ta2e$ re!e"va'le !urrent Allo,an!e for un!olle!t"'le el"n#uent ta2e$ To re!la$$"f3 un!olle!te ta2e$ a$ el"n#uent/ May "#December $1 2011 Ca$h Ta2e$ re!e"va'le el"n#uent To re!or !olle!t"on of 0ro0ert3 ta2e$/ %o&ember 1 2011 Allo,an!e for un!olle!t"'le ta2e$ el"n#uent Ta2e$ re!e"va'le el"n#uent To ,r"te off ta2 re!e"va'le eterm"ne to 'e un!olle!t"'le/ January 1 2011 February 2' 2011 Ca$h Ta2e$ re!e"va'le el"n#uent To re!or !olle!t"on of 5676 ta2e$/ 2 (ed)i**e +o,nship >art"al )alan!e Sheet De!em'er B71 5677 A$$et$ Ta2e$ re!e"va'le el"n#uent ;net of 4+*1666 e$t"mate un!olle!t"'le ta2e$< 3 9661666 *61666 9661666 *61666 51*661666 *61666 51+*61666

718661666 718661666

7*61666 7*61666

*1666 *1666

HE1E*6 HE1E*6

4 B**1666

Revenue ,oul e#ual ta2 lev3 le$$ un!olle!t"'le amount$ le$$ amount$ not !olle!te 2011 Pearson Education, Inc. publishing as Prentice Hall

20-! ,"th"n 96 a3 0er"o / S"n!e governmental un"t$ rarel3 !om0lete the !lo$"ng 0ro!e$$ ,"th"n 96 a3$ of 3ear en 1 the amount$ !olle!te ,"th"n 96 a3$ of 3ear en ,"ll 'e =no,n/ ;451*661666 @ 4*61666 @ 4B7515*6 ( 4517BE1E*6< E20$8 Closing entries( Fun 'alan!e @ una$$"gne A00ro0r"at"on$ E$t"mate revenue$ To rever$e entr3 to re!or 'u get/ *66 7E1*66 7H1666

Re$erve for en!um'ran!e$ 0r"or 3ear 51666 Re$erve for en!um'ran!e$ 71666 Revenue$ 7E1BH6 Nonre!"0ro!al tran$fer "n B1566 E20en "ture$ !urrent 3ear 791+*6 E20en "ture$ 0r"or 3ear 71866 En!um'ran!e$ 71666 Fun 'alan!e !omm"tte I 71666 Fun 'alan!e una$$"gne B15B6 To !lo$e a!!ount$1 "n!lu "ng the 0r"or 3earD$ re$erve for en!um'ran!e$/ Ia$$ume$ the 0r"or 3ear en!um'ran!e ,a$ !leare out ,"th the 0r"or 3ear e20en "ture an that !"t3 0ol"!3 "$ to !ont"nue an3 out$tan "ng en!um'ran!e$ from the !urrent 3ear a$ !omm"tte Fun 'alan!e

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20-" E20$9 -i**ar !it. General Fun )alan!e Sheet June B61 5677 )ssets Ca$h Ta2e$ re!e"va'le Le$$% Allo,an!e for un!olle!t"'le A!!ount$ Due from other fun $ Su00l"e$ "nventor3 Total a$$et$ *iabilities and Fund +alance L"a'"l"t"e$% Vou!her$ 0a3a'le Due to other fun $ Total l"a'"l"t"e$ Fun 'alan!e% Comm"tte Non$0en a'le Una$$"gne Total fun 'alan!e Total l"a'"l"t"e$ an fun 'alan!e 4751666 4B61666 51666 5H1666 B1666 +1666 4+E1666

47*1666 *1666 4561666 4 91666 +1666

761666 7E1666 5E1666 4+E1666

Che!=% E$t"mate revenue$ En!um'ran!e$ E20en "ture$ E20en "ture$0r"or 3ear A :u$tnon$0en a'le ;for "nventor3< En "ng 'alan!e Fun )alan!e@una$$"gne 4B661666 4 761666 91666 B661666 5861666 *1666 *1666 B6*1666 51666 7E1666 >re!lo$"ng 'alan!e A00ro0r"at"on$ Re$erve for en!um'ran!e$ 0r"or 3ear Revenue$

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20-# E20$10 -ade*.n !it. /enera* 0und Statement of Revenue$1 E20en "ture$1 an Change$ "n Fun )alan!e for the 3ear en e De!em'er B71 5677 Revenue$ E20en "ture$ E2!e$$ of revenue$ over e20en "ture$ Other f"nan!"ng $our!e$ ;u$e$<% Re!"0ro!al tran$fer$ "n Nonre!"0ro!al tran$fer$ out E2!e$$ of revenue$ an other f"nan!"ng $our!e$ over ;un er< e20en "ture$ an other f"nan!"ng u$e$ Total fun 'alan!e1 Januar3 71 5677 Total fun 'alan!e1 De!em'er B71 5677
E$t"mate revenue$ En!um'ran!e$ E20en "ture$ E20en "ture$0r"or 3ear Nonre!"0ro!al tran$fer$ out Fun )alan!e @ una$$"gne 47661666 4 5*1666 +1666 8*1666 8+1666 *1666 +1H66 7671666 7H1666 5E1666 B51566

47671666 8H1H66 51566 5E1666 ;7H1666< 4 771566 5*1666 4 B91566

>re!lo$"ng 'alan!e A00ro0r"at"on$ Re$erve for en!um'ran!e$ 0r"or 3ear Revenue$ Re!"0ro!al tran$fer$ "n En "ng 'alan!e

Total en "ng fun 'alan!e ( 4B51566 K 4+1666 ;Fun 'alan!e & !omm"tte or re$tr"!te or a$$"gne L/ a$ a re$ult of en!um'ran!e$< ( 4B91566/

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20-10 E20$11 Journal entries in the general fund( 1 E$t"mate revenue$ A00ro0r"at"on$ Fun 'alan!e & una$$"gne To re!or the annual 'u get/ 5*61666 5+H1666 51666

Ta2e$ re!e"va'le!urrent 5661666 Revenue$ Allo,an!e for un!olle!t"'le ta2e$Current To re!or ta2 lev3 for the 3ear ;7G e$t"mate un!olle!t"'le</ Ca$h Ta2e$ re!e"va'le!urrent To re!or ta2 !olle!t"on$/ 7*61666

78H1666 51666

7*61666 7*1666 7*1666 7H1666 7H1666

Due from $0e!"al revenue fun Ca$h To re!or loan to SRF/ En!um'ran!e$ Re$erve for en!um'ran!e$ To en!um'er or er$ for $u00l"e$/

Re$erve for en!um'ran!e$ 7H1666 En!um'ran!e$ To rever$e en!um'ran!e entr3 on re!e"0t of $u00l"e$ or ere / E20en "ture$ Vou!her$ 0a3a'le To re!or 0ur!ha$e of $u00l"e$/ 7H17*6

7H1666

7H17*6 H66 H66 *1666 *1666 7*1666 7*1666

E20en "ture$ Due to $tore$ fun ;ISF< To re!or mater"al$ a!#u"re from the $tore$ fun /

O0erat"ng tran$fer to e't $erv"!e fun Ca$h To re!or 0a3ment to DSF for e't $erv"!e/ E20en "ture$ Ca$h To re!or 0ur!ha$e of e#u"0ment/

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20-11 10 Ca$h Revenue$ To re!or !olle!t"on of l"!en$e revenue/ 11 Ta2e$ re!e"va'le el"n#uent Allo,an!e for un!olle!t"'le ta2e$!urrent Ta2e$ re!e"va'le!urrent Allo,an!e for un!olle!t"'le ta2e$ el"n#uent To re!la$$"f3 un!olle!te !urrent ta2e$ a$ el"n#uent/ *61666 51666 *61666 51666 B1666 B1666

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20-12 E20$11 ;!ont"nue < 12 Ca$h Ta2e$ re!e"va'le el"n#uent To re!or !olle!t"on of el"n#uent ta2e$/ B61666 B61666

Revenue$ ;4561666 @ 451666<F5 81666 Deferre revenue$ 81666 To efer revenue re!ogn"t"on on ta2e$ e20e!te to 'e !olle!te after the 96 a3 revenue re!ogn"t"on !utoff/ E20$12 1 Ca$h Ta2 ant"!"0at"on note$ 0a3a'le To re!or "$$uan!e of $hort@term note$/ 2 En!um'ran!e$ Re$erve for en!um'ran!e$ To re!or or er of e#u"0ment/ 3 Re$erve for en!um'ran!e$ E20en "ture$ En!um'ran!e$ Vou!her$ 0a3a'le To re!or re!e"0t of e#u"0ment/ O0erat"ng tran$fer to DSF Ca$h To re!or tran$fer to e't $erv"!e fun / >ro0ert3 ta2e$ re!e"va'le!urrent Allo,an!e for un!olle!t"'le !urrent Ta2e$ Deferre revenue$ Revenue$ To re!or 0ro0ert3 ta2 lev3/ Ca$h Deferre revenue$ To re!or re!e"0t of re$tr"!te grant/ BB1666 BB15*6 BB1666 BB15*6 BB1666 BB1666 E*1666 E*1666

5661666 5661666

716661666 *61666 *61666 8661666

7661666 47661666

2011 Pearson Education, Inc. publishing as Prentice Hall

20-13

E20en "ture$ Vou!her$ 0a3a'le ;or !a$h< To re!or e20en "ture$ for grant 0rogram/ Deferre revenue$ Revenue$ To re!or revenue$ to ate on the grant/

E*1666 E*1666 E*1666 E*1666

2011 Pearson Education, Inc. publishing as Prentice Hall

20-14 E20$13 1 !P0 Ca$h Other f"nan!"ng $our!e$0ro!ee $ from 'on "$$ue To re!or "$$uan!e of 'on $/ !P0 Other f"nan!"ng u$e$nonre!"0ro!al tran$fer to DSF Ca$h To tran$fer the 0rem"um to the e't $erv"!e fun / 1#0 Ca$h Other f"nan!"ng $our!e$ nonre!"0ro!al tran$fer from C>F To re!or re!e"0t of 'on 0rem"um/ 2 781666 781666 E981666 E981666

781666 781666

# 0 Ca$h ;or Grant$ re!e"va'le< +*61666 Grant revenue +*61666 To re!or grant revenue/ ;Th"$ entr3 a$$ume$ that the a00ro0r"ate e20en "ture$ ,"ll ta=e 0la!e ,"th"n the $ame f"$!al 3ear & other,"$e u$e eferre revenue/< /0 Other f"nan!"ng u$e$;non<re!"0ro!al tran$fer to C>F Ca$h To re!or tran$fer to e$ta'l"$h C>F/ !P0 Ca$h Other f"nan!"ng $our!e$ ;non<re!"0ro!al tran$fer from GF To re!or the tran$fer from the GF/ *661666 *661666 *661666 *661666

P0 Ca$h Revenue & !ontr"'ut"onFen o,ment To re!or a 0ermanent fun !ontr"'ut"on/

7616661666 7616661666

2011 Pearson Education, Inc. publishing as Prentice Hall

20-15 5 /0 E20en "ture$ Vou!her$ 0a3a'le ;or !a$h< To re!or veh"!le 0ur!ha$e$/ 6 /0 Ca$h BE*1666 BE*1666

B61666 Other f"nan!"ng $our!e$ & $ale of a$$et$ B61666 To re!or the $ale of governmental a$$et$/ ;Th"$ "$ a governmental fun entr3/ Un er a!!rual a!!ount"ng1 the a$$et ,oul 'e remove an a ga"n on $ale re!ogn"Ae /< 71566 Other f"nan!"ng $our!e$ & $ale of a$$et$ 71566 To re!or the $ale of governmental a$$et$/ ;Th"$ "$ a governmental fun entr3/ Un er a!!rual a!!ount"ng1 the a$$et ,oul 'e remove an a ga"n on $ale re!ogn"Ae /<

/0 Ca$h

/0 Other f"nan!"ng u$e$nonre!"0ro!al tran$fer to DSF Ca$h To re!or tran$fer to e't $erv"!e/ 1#0 Ca$h Other f"nan!"ng $our!e$ nonre!"0ro!al tran$fer from GF To re!or re!e"0t of tran$fer from GF/ 1#0 E20en "ture$ Ca$h To re!or "ntere$t 0a3ment/ *61666 *61666 *61666 *61666

*61666 *61666

2011 Pearson Education, Inc. publishing as Prentice Hall

20-1 E20$14 Tr"al )alan!e DR CR 4+761666 B661666 7*61666 B61666 961666 761666 7+61666 +61666 7*61666 861666 '< 7661666 *561666 !< E*1666 48*61666 F"2e A$$et$ A!!umulate e0re!"at"on Long term e't 0a3a'le Ca0"tal Lea$e 0a3a'le Total Net A$$et$ 48*61666 a< 7661666 a< 9*1666 '< 7661666 !< E*1666 4B7*1666 7661666 9*1666 7661666 E*1666 4716*6166 6 4716*61666 a< B*1666 < +61666 A :u$tment$ DR CR G? Stmt of Net A$$et$ DR CR +761666 B661666 7*61666 B61666 961666 761666 7+61666 6 7*61666 861666 +561666

Ca$h Inve$tment$ Ta2 re!e"va'le el"n#uent A!!ount$ re!e"va'le Su00l"e$ "nventor3 Allo,an!e$ for un!olle!t"'le ta2e$ el"n#uent Vou!her$ 0a3a'le Deferre revenue Note 0a3a'le ;$hort@ term< Fun 'alan!e @ !omm"tte Fun 'alan!e & una$$"gne

< +61666

4B7*1666

2011 Pearson Education, Inc. publishing as Prentice Hall

20-1!

E20$15 %et change in fund balance,total go&ernmental funds 471+6H18*6 Amount$ re0orte for go&ernmental acti&ities "n the $tatement of net a$$et$ "ffer from tho$e "n the governmental fun 'alan!e $heet 'e!au$e% Governmental fun $ re0ort !a0"tal outla3$ a$ e20en "ture$C the a$$et$ are !a0"tal"Ae an e0re!"ate "n the government@," e $tatement$ 55*1666 Grant revenue$ "n the $tatement of a!t"v"t"e$ that o not 0rov" e !urrent f"nan!"al re$our!e$ are not re0orte a$ revenue$ "n the fun $ 79*1666 De't 0ro!ee $ 0rov" e !urrent f"nan!"al re$our!e$ "n the fun $tatement1 'ut "$$u"ng e't "n!rea$e$ long@term l"a'"l"t"e$ "n the $tatement of net a$$et$ ;B*61666< A !a0"tal lea$e "$ treate a$ an e20en "ture "n the governmental fun $ "n the 3ear that the lea$e agreement "$ entere "ntoC ho,ever1 "t "n!rea$e$ long@term l"a'"l"t"e$ "n the $tatement of net a$$et$ 561666I Change "n net a$$et$ of governmental a!t"v"t"e$ 471+9H18*6

2 +he reconci*in3 difference is 4755000 6 4555000 7 42050005 ,here fund ba*ance ,as reduced b. the fu** 4755000 that ,as proper*. char3ed to e8penditures for the fund statements ,hi*e net assets ,i** on*. be reduced b. the 4555000 increase in *on3$term debt that is reported in the 3o)ernment$,ide statements9

2011 Pearson Education, Inc. publishing as Prentice Hall

20-1"
P :;<E-#

P20$1 !it. of :rchard Par= General Fun )alan!e Sheet De!em'er B71 5677 )ssets Ca$h Ta2e$ re!e"va'le el"n#uent ;net of 4B61666 allo,an!e for un!olle!t"'le ta2e$< A!!ount$ re!e"va'le ;net of 451666 allo,an!e for 'a e't$< Su00l"e$ on han Due from Agen!3 Fun *iabilities and Fund +alance Vou!her$ 0a3a'le Due to Ut"l"t3 Fun Ta2e$ re!e"ve "n a van!e L"a'"l"t"e$ Fun 'alan!e & !omm"tte Fun 'alan!e & non$0en a'le Fun 'alan!e & una$$"gne Fun 'alan!e Total l"a'"l"t"e$ an fun 'alan!e Su00ort"ng !om0utat"on$ A :u$t"ng entr3% Su00l"e$ on han Fun 'alan!e @ non$0en a'le To re!or $u00l"e$ on han an relate re$erve/ Clo$"ng entr"e$ A00ro0r"at"on$ Fun 'alan!e @ una$$"gne E$t"mate revenue$ To rever$e 'u get entr3/ Revenue$ E20en "ture$ En!um'ran!e$ Fun 'alan!e @ una$$"gne 4 +61666 7H61666 5B1666 B1666 761666 45*91666 47**1666 561666 761666 7H*1666 *61666 B1666 7H1666 E71666 45*91666

B1666 B1666

8661666 761666 8761666 8761666 H*H1666 *61666 51666

2011 Pearson Education, Inc. publishing as Prentice Hall

20-1# En "ng fun 'alan!e% Fun 'alan!e@una$$"gne ( 4591666 ;0re!lo$"ng 'alan!e< @ 4761666 K 51666 ( 47H1666 Fun 'alan!e & !omm"tte ;for en!um'ran!e$< ( 4*61666 Fun 'alan!e & non$0en a'le ;for $u00l"e$< ( 4B1666 Total en "ng fun 'alan!e ( 47H1666 K 4*61666 K 4B1666 ( 4E71666

2011 Pearson Education, Inc. publishing as Prentice Hall

20-20 P20$2 !it. of ;ata)ia General Fun Statement of Revenue$1 E20en "ture$1 an Change$ "n Fun )alan!e For the 3ear en e June B61 5675 Revenue$ E20en "ture$ E2!e$$ revenue$ over e20en "ture$ Other f"nan!"ng $our!e$ ;u$e$<% Nonre!"0ro!al tran$fer$ out E2!e$$ of revenue$ an other f"nan!"ng $our!e$ over ;un er< e20en "ture$ an other f"nan!"ng u$e$ Total fun 'alan!e1 Jul3 71 5677 ;g"ven< Total fun 'alan!e1 June B61 5675 48H61666 8+61666 +61666 ;761666< B61666 H61666 47761666

!it. of ;ata)ia General Fun )alan!e Sheet June B61 5675 )ssets Ca$h Ta2e$ re!e"va'le el"n#uent Le$$% Allo,an!e for un!olle!t"'le ta2e$ Due from Count3 Total a$$et$ *iabilities and Fund +alance L"a'"l"t"e$% Vou!her$ 0a3a'le Note$ 0a3a'le Total l"a'"l"t"e$ Fun 'alan!e% Fun 'alan!e & re$tr"!te ;I ue to ena'l"ng leg"$lat"on< Fun 'alan!e & una$$"gne Total fun 'alan!e Total l"a'"l"t"e$ an fun 'alan!e 4 561666 861666 7761666 455H1666 4 H61666 47961666 B61666 7B61666 7H1666 455H1666

4 *H1666 961666 77H1666

2011 Pearson Education, Inc. publishing as Prentice Hall

20-21 P20$3 1 Journal entr"e$ for the To,n of T3ler E$t"mate Revenue$ +661666 A00ro0r"at"on$ Fun )alan!e @ una$$"gne To re!or the 'u get for the 3ear Jul3 71 5677 to June B61 5675/ B8*1666 *1666

En!um'ran!e$ ;0r"or 3ear< 81666 Re$erve for En!um'ran!e$ ;0r"or 3ear< 81666 To re"n$tate the 0r"or 3ear en!um'ran!e/ --%./0( this is li1e General Fund entry 211 in the example in the chapter but is done at beginning of year 3 it allo4s the boo11eeper to use encumbrance accounting for all expenditures regardless of the budget or accounting year5 6f the encumbrance 4ere not re#established entry 7i8 belo4 4ould omit the encumbrance accounts5 /his is essentially a 7re&erse8 entry and is optional599 5 a Ta2e$ Re!e"va'le Revenue Ta2e$ Allo,an!e for un!olle!t"'le ta2e$ To re!or ta2 lev3 for the 3ear/ Ca$h Ta2e$ Re!e"va'le !urrent Ta2e$ Re!e"va'le el"n#uent To re!or !a$h !olle!t"on$ for the 3ear/ c Allo,an!e for un!olle!t"'le ta2e$ el"n#uent Ta2e$ Re!e"va'le el"n#uent To re!or ,r"te@off of un!olle!t"'le a!!ount/ Ca$h L"!en$e$ an >erm"t$ To re!or hunt"ng l"!en$e$/ e Ca$h M"$!ellaneou$ Revenue$ To re!or M"$!ellaneou$ revenue$/ f E20en "ture$ Vou!her$ >a3a'le To re!or $alar"e$ for the 3ear/ 3 En!um'ran!e$ Re$erve for en!um'ran!e$ To re!or or er of e#u"0ment/ 7*1666 7*1666 561666 561666 5661666 5661666 71666 71666 561666 561666 5661666 78H1666 51666 7861666 7E91666 7+1666

2011 Pearson Education, Inc. publishing as Prentice Hall

20-22 P20$3 ;!ont"nue < h Re$erve for en!um'ran!e$ E20en "ture$ En!um'ran!e$ Vou!her$ >a3a'le To re!or re!e"0t of e#u"0ment/ 7*1666 7+1666 7*1666 7+1666

E20en "ture$&0r"or 3ear 81*66 Re$erve for en!um'ran!e ;0r"or 3ear< I 81666 Vou!her$ >a3a'le En!um'ran!e$ ;0r"or 3ear< To re!or re!e"0t of e#u"0ment or ere ur"ng the 0r"or 3ear an !hargea'le aga"n$t the 0r"or 3earD$ re$erve for en!um'ran!e$/ : see %./0 for first entry 3 the encumbrance is optional5 En!um'ran!e$ Re$erve for en!um'ran!e$ To re!or the 0ur!ha$e or er for o0erat"ng $u00l"e$/ Re$erve for en!um'ran!e$ *1666 En!um'ran!e$ To rever$e the en!um'ran!e entr3 u0on re!e"0t of the $u00l"e$/ Su00l"e$ "nventor3 Vou!her$ >a3a'le To re!or re!e"0t of o0erat"ng $u00l"e$/ *1666 771666

81*66 81666

>

771666

*1666

*1666 7*1666 7*1666 B+H16+6 B+H16+6 H1666 H1666 5+1666 51666 5+1666 51666

Note >a3a'le Ca$h To re!or 0a3ment of note 0a3a'le/

E20en "ture$ Ca$h To re!or 0a3ment of var"ou$ e20en "ture$/

E20en "ture$ Su00l"e$ "nventor3 To a :u$t the $u00l"e$ "nventor3 M e20en "ture$/

Ta2e$ Re!e"va'le& el"n#uent Allo,an!e for un!olle!t"'le ta2e$&!urrent Ta2e$ Re!e"va'le !urrent Allo,an!e for un!olle!t"'le ta2e$& el"n#uent

2011 Pearson Education, Inc. publishing as Prentice Hall

20-23 To re!la$$"f3 0a$t@ ue ta2e$ re!e"va'le a$ el"n#uent/ !*osin3 Entries o A00ro0r"at"on$ Fun )alan!e & una$$"gne E$t"mate Revenue$ To !lo$e the -'u getar3. a!!ount$ Revenue$ E20en "ture$ E20en "ture$@0r"or 3ear Fun )alan!e @ una$$"gne To !lo$e the revenue an e20en "ture a!!ount$ Re$erve for En!um'ran!e$ En!um'ran!e$ To !lo$e en!um'ran!e a!!ount$ B8*1666 *1666 +661666 +7H1666 B8616+6 81*66 7H1+96 91666 91666

Fun )alan!e & !omm"tte I 81666 Fun )alan!e & non$0en a'leII B1666 Fun )alan!e & una$$"gne 751666 To re!la$$"f3 Fun )alan!e a!!ount$ & u$"ng una$$"gne a$ the -0lug. IThe F)@!omm"tte 'alan!e "$ Aero at 3ear@en a$ "t ,a$ !onne!te ,"th the e#u"0ment "n entr3 -"./ IIThe F)@non$0en a'le "$ e#u"valent to the $u00l"e$ 'alan!e/ The en "ng $u00l"e$ are 4B1666 $o the F)@non$0en a'le "$ a :u$te from "t$ 'eg"nn"ng 'alan!e of 491666 !re "t/

2011 Pearson Education, Inc. publishing as Prentice Hall

20-24 P20$3 ;!ont"nue < 2 +o,n of +.*er General Fun Statement of Revenue$1 E20en "ture$1 an Change$ "n Fun )alan!e )u get an A!tual ;)u getar3 )a$"$< For the 3ear en e June B61 5675 Or"g"nal )u get Revenue$ Ta2e$ L"!en$e$ an 0erm"t$ M"$!ellaneou$ revenue Total Revenue$ E20en "ture$ Total e20en "ture$ ;not eta"le < E2!e$$ of revenue$ over e20en "ture$ )u getar3 fun 'alan!e June B61 5677 Le$$ e2!e$$ 0r"or 3earD$ en!um'ran!e over a!tual e20en "ture )u getar3 Fun )alan!e at June B61 5677 En!um'ran!e$ out$tan "ng Fun 'alan!e June B61 5675
I

F"nal )u get 45*61666 561666 7B61666 +661666

A!tual ;)u getar3 )a$"$< 478H1666 561666 5661666 +7H1666

Var"an!e >o$"t"ve ;Negat"ve< 4;*51666< @ E61666 7H1666

45*61666 561666 7B61666 +661666

4B8*1666 *1666 761666

4B8*1666 *1666 761666

4B8916+6I 571896 761666 ;*66<

;716+6< 791896 @ ;*66< 4 791+96

4 7*1666

4 7*1666

B71+96 91666 4 BE1+96

A!tual e20en "ture$ on a 'u getar3 'a$"$ "n!lu e$ the 491666 $u00l"e$ 0ur!ha$e !omm"tment !hargea'le aga"n$t the 5677@75 a00ro0r"at"on$1 'ut e2!lu e$ the 481*66 e20en "ture$ !hargea'le aga"n$t the 0r"or 3earD$ !arr3over a00ro0r"at"on/

39 G"ven the l"m"te "nformat"on1 the re!on!"l"ng "tem$ ,h"!h are !erta"n "n!lu e the 0la3groun e#u"0ment "n "tem h an the other e#u"0ment "n "tem "/

2011 Pearson Education, Inc. publishing as Prentice Hall

P20$4
Ca$h an !a$h e#u"valent$ Inve$tment$ Ta2e$ re!e"va'le A!!ount$ re!e"va'le Due from other government$ Su00l"e$ "nventor3 Vou!her$ 0a3a'le Contra!t$ 0a3a'le Deferre revenue Fun 'alan!eFNet A$$et$1 'eg Revenue$ E20en "ture$ OFS)on 0ro!ee $ OFSCa0"tal lea$e OFSTran$fer$ "n OFUTran$fer$ out F"2e A$$et$ A!!umulate De0re!"at"on Con$tru!t"on "n >rogre$$ )on $ >a3a'le Ca0"tal lea$e$ 0a3a'le 11 0'! '!0 Change "n net a$$et$ 11 0'! '!0 DR *+71766 *561666 *561666 7HE1*66 B9+18E6 5861666 CR A :u$tment$ DR A :u$tment$ CR

Statement of A!t"v"t"e$ DR

Statement of A!t"v"t"e$ CR

Statement of Net A$$et$ DR *+71766 *561666 *561666 7HE1*66 B9+18E6 5861666

Statement of Net A$$et$ CR

BE81*66 +E1*66 **1666 8751E56 B1*6E1+*6 B16+B1966 *661666 9*1666 E*15*6 E*15*6 *1*+51+56 *1*+51+56

9< **1666 5< B61666 9< **1666 7< 81666 B< 561666 +< *661666 *< 9*1666 E< E*15*6 E< E*15*6 7< 81666 5< 8*1666 5< 9*1666 B< 561666 +< *661666 *< 9*1666 '1; 2"0 2 "!< "<0 *+E1H*6 2 "!< "<0 561666 76+1666 B1*951+*6 B167+1966

BE81*66 +E1*66 6 8+51E56

6 6 6 6

9*1666 *661666 9*1666 1 ;;; <20 *+E1H*6 2 "!< "<0

'1; 2"0

Ne, net a$$et 'alan!e ( 8751E56 K B61666 K *+E1H*6 ( 71+861*E6 a< A$$ume no e0re!"at"on "n the f"r$t 3ear1 $"n!e no e0re!"at"on 0ol"!3 "$ 0rov" e /

2011 Pearson Education, Inc. publishing as Prentice Hall

P20$5 NAIC>A a a0te O O$lo S!hool D"$tr"!t General Fun Tran$a!t"on$ Jul3 71 5676 June B61 5677 E$t"mate revenue$ B16661666 A00ro0r"at"on$ Fun 'alan!e & una$$"gne To re!or the 'u get for the 3ear/ Ta2e$ re!e"va'le Revenue$ ta2e$ E$t"mate un!olle!t"'le ta2e$ To re!or ta2 lev3 for the 3ear/ E$t"mate un!olle!t"'le ta2e$ Ta2e$ re!e"va'le To ,r"te@off un!olle!t"'le ta2e$/ Ca$h Ta2e$ re!e"va'le M"$!ellaneou$ revenue$ To re!or !a$h !olle!t"on$ for the 3ear/ e Vou!her$ 0a3a'le Ca$h To re!or !a$h 0a3ment$ for the 3ear/ En!um'ran!e$ Re$erve for en!um'ran!e$ To re!or en!um'ran!e$/ g Re$erve for en!um'ran!e$ En!um'ran!e$ To rever$e en!um'ran!e$/ E20en "ture$ Vou!her$ 0a3a'le To re!or vou!her$ for 0a3ment of !urrent o0erat"on$/ " E20en "ture$ 0r"or 3ear Vou!her$ 0a3a'le To re!or e20en "ture$ for 0r"or 3ear/ *H1666 *H1666 51E661666 51E661666 51E661666 51E661666 519+61666 519+61666 51E661666 51E661666 51HE61666 51H661666 E61666 +61666 +61666 518+61666 51H761666 7B61666

518H61666 561666

'

2011 Pearson Education, Inc. publishing as Prentice Hall

20-211 : Fun 'alan!e !omm"tte E20en "ture$ 0r"or 3ear Fun 'alan!e @ a$$"gne To !lo$e e2!e$$ re$erve to fun 'alan!e/ Due to other fun $ Vou!her$ 0a3a'le To re!or vou!her$ for 0a3ment to other fun $/ E20en "ture$ Due to other fun $ To re!or e20en "ture$ for amount$ ue other fun $/ m En!um'ran!e$ 871666 961666 *H1666 51666 5761666 5761666 7+51666 7+51666

Fun 'alan!e !omm"tte 871666 To re!or !omm"tment for ne, !ontra!t/ NOTE% ,e u$uall3 $ee en!um'ran!e$ an re$erve for en!um'ran!e$ "n the $ame entr3/ In the !lo$"ng entr"e$ the en!um'ran!e$ ,"ll 'e !lo$e an a e'"t to Fun 'alan!e & una$$"gne ;th"$ ma=e$ $en$e a$ there "$ le$$ fun 'alan!e ava"la'le ue to the !omm"tment< P20$6 NAIC>A a a0te O Journal entr"e$ for the C"t3 of Laht" General Fun 1 E$t"mate revenue$ A00ro0r"at"on$ Fun 'alan!e @ una$$"gne To re!or the 'u get/ Ta2e$ re!e"va'le Revenue$ Allo,an!e for un!olle!t"'le ta2e$ To re!or the 0ro0ert3 ta2 lev3/ Allo,an!e for un!olle!t"'le ta2e$ Ta2e$ re!e"va'le To ,r"te off un!olle!t"'le ta2e$ re!e"va'le/ Ca$h Ta2e$ re!e"va'le To re!or 0ro0ert3 ta2 !olle!t"on$/ 516661666 718+61666 961666 71HE61666 71H961666 761666 H1666 H1666 71H561666 71H561666

2011 Pearson Education, Inc. publishing as Prentice Hall

20-212 5 En!um'ran!e$ 716E61666

Fun 'alan!e !omm"tte I 716E61666 To re!or 0ur!ha$e !omm"tment$/ : /his sho4s the approach to encumbrances=commitments by ma1ing entries during the accounting period directly into the fund balance account5 /he ad&antage of this method is that the fund balance account 4ill be more accurate throughout the year5 /he disad&antage is that tradition is to offset 0ncumbrances 4ith >eser&e for 0ncumbrances5 6 Fun 'alan!e !omm"tte E20en "ture$ En!um'ran!e$ Vou!her$ 0a3a'le To re!or a!tual e20en "ture$/ Vou!her$ 0a3a'le Ca$h To re!or 0a3ment of vou!her$/ Revenue$ Fun 'alan!e @ una$$"gne E$t"mate revenue$ To !lo$e revenue$ a!!ount$/ A00ro0r"at"on$ E20en "ture$ En!um'ran!e$ Fun 'alan!e @ una$$"gne To !lo$e e20en "ture relate a!!ount$ 716661666 71H+61666 716661666 71H+61666 71H*51666 71H*51666 71H961666 7+61666 516661666 718+61666 71H+61666 E61666 B61666

2011 Pearson Education, Inc. publishing as Prentice Hall

20-213 P20$7 ?o*endam !ount. General Fun Statement of Revenue$1 E20en "ture$1 an Change$ "n Fun )alan!e For the 3ear en e De!em'er B71 5677 Revenue$% Ta2e$ L"!en$e$ an 0erm"t$ Intergovernmental grant$ Total revenue$ E20en "ture$% Current o0erat"ng% General government >u'l"! $afet3 Ju "!"al Pealth an ,elfare Total !urrent o0erat"ng Ca0"tal outla3 Total e20en "ture$ E2!e$$ of revenue$ over e20en "ture$ Other f"nan!"ng $our!e$ ;u$e$<% O0erat"ng tran$fer to e't $erv"!e fun E2!e$$ ;Def"!"en!3< of revenue$ an other $our!e$ over e20en "ture$ an other u$e$ Fun 'alan!e1 Januar3 71 5677 Re$" ual e#u"t3 tran$fer from other fun Fun 'alan!e1 De!em'er B71 5677 47616661666 516661666 B661666 4751B661666

4 H16661666 71*661666 716661666 715661666 771E661666 9661666 751B661666 6 ;B561666< ;B561666< B17B61666 516661666 4 +1H761666

Note% The $hort@term note affe!t$ onl3 the 'alan!e $heet/ The "nterfun !olle!t"on affe!t$ the 'alan!e $heet onl3/

2011 Pearson Education, Inc. publishing as Prentice Hall

20-214 P20$8 1 Ca$h ;4B16661666 /69 /*< OFS @ Nonre!"0ro!al tran$fer from GF To re!or tran$fer from general fun / E20en "ture$ "ntere$t Ca$h To re!or "ntere$t 0a3ment/ Ca$h OFS @ Nonre!"0ro!al tran$fer from GF To re!or tran$fer from general fun / 4 E20en "ture$ "ntere$t E20en "ture$ 0r"n!"0al ret"rement Ca$h To re!or 0a3ment of 0r"n!"0al an "ntere$t/ None/ Ca$h ;4516661666 /69 /*< OFS @ Nonre!"0ro!al tran$fer from GF To re!or tran$fer from general fun / E20en "ture$ "ntere$t Ca$h To re!or "ntere$t 0a3ment/ 961666 961666 961666 961666 861666 716661666 716861666 861666 861666 861666 861666 716861666 716861666

5 6

2011 Pearson Education, Inc. publishing as Prentice Hall

20-215 P20$9 1 .ctober 1 2011 /0 OFU & nonre!"0ro!al tran$fer to C>F Ca$h To re!or tran$fer of !a$h to C>F/ !P0 Ca$h OFS & Nonre!"0ro!al tran$fer from gen fun To re!or re!e"0t of !a$h from GF/ 2 %o&ember 1 2011 !P0 En!um'ran!e$ *H61666 *H61666 5661666 5661666 5661666 5661666

Re$erve for en!um'ran!e$ To re!or en!um'ran!e$ for the amount of the !ontra!t/ 3 )pril 1" 2012 !P0 Ca$h >ro!ee $ from 'on "$$ue To re!or $ale of 'on $/ !P0 OFU @ nonre!"0ro!al tran$fer to e't $erv"!e fun Ca$h To tran$fer of 'on 0rem"um to the DSF/ Ca$h OFS @ nonre!"0ro!al tran$fer from C>F To re!or re!e"0t of 'on 0rem"um/ 4 May 2 2012 !P0 E20en "ture$ !a0"tal outla3 *H61666 Contra!t$ 0a3a'le To re!or e20en "ture$ on the mun"!"0al 'u"l "ng 0ro:e!t/ Re$erve for en!um'ran!e$ *H61666 En!um'ran!e$ To remove en!um'ran!e$ ,hen !on$tru!t"on "$ !om0lete/ 5 71666 +671666

+671666

71666 71666 71666

1#0

*H61666

*H61666

May 12 2012 !P0 Contra!t$ 0a3a'le *H61666 Ca$h *H61666 To re!or 0a3ment to Croo=e Con$tru!t"on for 'u"l "ng !ontra!t/ !P0 Re$" ual e#u"t3 tran$fer to general fun Ca$h To re!or tran$fer to general fun / 561666 561666

2011 Pearson Education, Inc. publishing as Prentice Hall

20-21 !P0 OFS @ nonre!"0ro!al tran$fer from general fun >ro!ee $ from 'on "$$ue E20en "ture$ Re$" ual e#u"t3 tran$fer to general fun OFU @ nonre!"0ro!al tran$fer to DSF To !lo$e the 'oo=$ of the C>F/ Ca$h Re$" ual e#u"t3 tran$fer from C>F To re!or re!e"0t of !a$h from C>F/ P20$10 1 Journal entr"e$ for Malmo C"t3 July 1 2011 !P0 En!um'ran!e$ Re$erve for en!um'ran!e$ To en!um'er the !on$tru!t"on !ontra!t/ !P0 Ca$h OFS @ >ro!ee $ from 'on "$$ue To re!or 0ro!ee $ of 'on "$$ue/ !P0 OFU @ nonre!"0ro!al tran$fer to e't $erv"!e fun *1666 Ca$h To tran$fer 0rem"um to the DSF/ ;Th"$ 0rem"um tran$fer "$ !ommonl3 0re$ume "n 0ro'lem$/< Ca$h OFS @ nonre!"0ro!al tran$fer from C>F To re!or re!e"0t of 0rem"um tran$ferre from C>F/ December 20 2011 !P0 Re$erve for en!um'ran!e$ En!um'ran!e$ To re u!e en!um'ran!e$ for ,or= !om0lete / !P0 E20en "ture$ 7961666 7961666 *1666 *1666 5**1666 5**1666 +H61666 +H61666 5661666 +671666 *H61666 561666 71666 561666 561666

/0

*1666

1#0

7961666 Contra!t$ 0a3a'le To re!or e20en "ture$ for one@th"r of Gunnar$$on !ontra!t/

7961666

2011 Pearson Education, Inc. publishing as Prentice Hall

20-21! P20$10 ;!ont"nue < January 1 2012 !P0 Contra!t$ 0a3a'le Contra!t$ 0a3a'le reta"ne 0er!entage Ca$h To re!or 0art"al 0a3ment on the !ontra!t/ /0 7961666 791666 7++1666

OFS @ nonre!"0ro!al tran$fer to e't $erv"!e fun 51*66 Ca$h To tran$fer fun $ to DSF for Januar3 71 5675 "ntere$t 0a3ment/

51*66

1#0

51*66 Ca$h ;45*61666 /69 /*< @ 4*1666 OFS @ nonre!"0ro!al tran$fer from GF 51*66 To re!e"ve fun $ from GF for the Januar3 71 5675 "ntere$t 0a3ment/

E20en "ture$&"ntere$t E1*66 Ca$h E1*66 To re!or the Januar3 71 5675 "ntere$t 0a3ment on the 9G $er"al 'on $ ;45*61666 9G 7F5 3ear</ June $0 2012 !P0 En!um'ran!e$ Re$erve for en!um'ran!e$ To re u!e en!um'ran!e$ for ,or= !om0lete / !P0 E20en "ture$ !a0"tal outla3 Contra!t$ 0a3a'le To re!or '"ll"ng for ,or= !om0lete / 7961666 7961666 7961666 7961666

1#0

Clo$"ng entr3 !P0 OFS @ >ro!ee $ from 'on "$$ue Fun 'alan!e & una$$"gne I Re$erve for en!um'ran!e$ Fun 'alan!e @ re$tr"!te E20en "ture$&!a0"tal outla3 En!um'ran!e$ OFU @ nonre!"0ro!al tran$fer to DSF To !lo$e the 'oo=$ of C>F at en of f"$!al 3ear/ 5**1666 5B61666 7961666 7961666 B561666 7961666 *1666

IS"n!e there "$ a ef"!"t & ,e u$e the una$$"gne !ategor3 out$" e of the general fun / A$ al$o note 'elo,1 the ef"!"t ,"ll 'e !overe '3 "$$u"ng the a "t"onal 45*61666 "n 'on $/

2011 Pearson Education, Inc. publishing as Prentice Hall

20-21"

P20$10 ;!ont"nue < At June B61 5675 the 'alan!e $heet of the C>F ,oul a00ear a$ follo,$% )ssets Ca$h Total a$$et$ *iabilities Contra!t$ 0a3a'le Contra!t$ 0a3a'le reta"ne 0er!entage Fund balance Re$tr"!te Una$$"gne I Total l"a'"l"t"e$ an fun 'alan!e
I

47691666 47691666 47961666 791666 47961666 ;5B61666<

47E91666

;E61666< 47691666

Th"$ ef"!"t ,"ll 'e 0rov" e for '3 "$$u"ng the a "t"onal 45*61666 of 'on $/

2011 Pearson Education, Inc. publishing as Prentice Hall

20-21# P20$11 NAIC>A a a0te O 1 July 1 2011 ;7< Ca$h Due to general fun To re!or the loan from the general fun / ;5< E20en "ture$ B561666 B561666 Ca$h To re!or 0a3ment of eng"neer"ng an 0lann"ng !o$t$/ December 1 2011 ;B< Ca$h 7617661666 OFS @ >ro!ee $ from 'on "$$ue To re!or re!e"0t of 0ro!ee $ from 9G 'on "$$ue/ 7661666 7661666 !it. of !erone C"v"! Center Con$tru!t"on Fun General Journal *661666 *661666

7617661666

OFU @ nonre!"0ro!al tran$fer to DSF Ca$h To tran$fer 'on 0rem"um to e't $erv"!e fun / March 1" 2012 ;+< En!um'ran!e$

7516661666 Re$erve for en!um'ran!e$ 7516661666 To re!or !on$tru!t"on !omm"tment to Can u Con$tru!t"on Com0an3/ **1666 **1666 Re$erve for en!um'ran!e$ To re!or !omm"tment for mater"al$ on or er/

;*<

En!um'ran!e$

)pril 1 2012 ;9< Ca$h Deferre grant revenue To re!or re!e"0t of $tate grant for !on$tru!t"on/ ;E<

51*661666 51*661666

E20en "ture$ *71666 Re$erve for en!um'ran!e$ **1666 Vou!her$ 0a3a'le En!um'ran!e$ To re!or re!e"0t of mater"al$ an el"m"nat"on of en!um'ran!e$/ Vou!her$ 0a3a'le Ca$h To re!or 0a3ment of vou!her/ *71666

*71666 **1666

*71666

2011 Pearson Education, Inc. publishing as Prentice Hall

20-220 P20$11 ;!ont"nue < June 1" 2012 ;H< E20en "ture$ 516661666

Contra!t$ 0a3a'le !urrent 71HH61666 Contra!t$ 0a3a'le reta"ne 0er!entage 7561666 To re!or 0rogre$$ '"ll"ng on !ontra!t ,"th a 9G reta"ne 0er!entage/ Re$erve for en!um'ran!e$ En!um'ran!e$ To re u!e en!um'ran!e$ for amount$ '"lle / ;8< 516661666 516661666

Due to general fun *661666 Ca$h To re!or re0a3ment of "n"t"al f"nan!"ng to the general fun / 51BE71666

*661666

June $0 2012 Deferre grant revenue Revenue To re!ogn"Ae grant revenue earne /

51BE71666

Note that the entr3 re!ogn"A"ng grant revenue 0re$ume$ that the f"r$t 4* m"ll"on of e20en "ture$ ,"ll 'e re!overa'le from the $tate/ In $ome !a$e$1 the grantor onl3 agree$ to 0a3 a !erta"n 0er!entage of the !o$t1 u0 to $ome ma2"mum/ If th"$ ,ere the !a$e "n th"$ 0ro'lem1 the amount of revenue re!ogn"Ae ,oul 'e one@th"r of 451BE716661 or a00ro2"matel3 4E861666/ Closing entries Revenue OFS @ >ro!ee $ from 'on "$$ue Re$erve for en!um'ran!e$ Fun 'alan!e @ re$tr"!te E20en "ture$ OFU @ nonre!"0ro!al tran$fer to DSF En!um'ran!e$ To !lo$e the 'oo=$ at June B61 5675/ 51BE71666 7617661666 7616661666 7616661666 51BE71666 7661666 7616661666

2011 Pearson Education, Inc. publishing as Prentice Hall

20-221

!it. of !erone C"v"! Center Con$tru!t"on Fun )alan!e Sheet June B61 5675 )ssets Ca$h Total a$$et$ *iabilities and Fund +alance Deferre $tate grant Contra!t$ 0a3a'le !urrent Contra!t$ 0a3a'le reta"ne 0er!entage Total l"a'"l"t"e$ Fun 'alan!e% Re$tr"!te Total fun 'alan!e Total l"a'"l"t"e$ an fun 'alan!e 4 7581666 71HH61666 7561666 4 517581666 47616661666 7616661666 47517581666 47517581666 47517581666

2011 Pearson Education, Inc. publishing as Prentice Hall

20-222 P20$12 1 !P0 Ca$h OFS @ >ro!ee $ from 'on $ To re!or "$$uan!e of 'on $ at a 0rem"um/ OFU @ nonre!"0ro!al tran$fer to e't $erv"!e fun Ca$h To re!or tran$fer of 'on 0rem"um to DSF/ 1#0 Ca$h OFS @ nonre!"0ro!al tran$fer from C>F To re!or tran$fer of 'on 0rem"um/ 2 !P0 En!um'ran!e$ Re$erve for en!um'ran!e$ To en!um'er !ontra!t a,ar e for !on$tru!t"on/ 3 !P0 Re$erve for en!um'ran!e$ En!um'ran!e$ To re u!e en!um'ran!e$ for ,or= !om0lete / E20en "ture$ Contra!t$ 0a3a'le To re!or e20en "ture$ for ,or= !om0lete / 4 !P0 Contra!t$ 0a3a'le B561666 Contra!t$ 0a3a'le reta"ne 0er!ent Ca$h To re!or 0art"al 0a3ment on !on$tru!t"on !ontra!t/ OFU @ nonre!"0ro!al tran$fer to DSF Ca$h To re!or tran$fer to DSF/ Ca$h OFS @ nonre!"0ro!al tran$fer from GF To re!or tran$fer from GF/ 6 1#0 E20en "ture$&"ntere$t 561666 Ca$h To re!or 0a3ment of "ntere$t ;*661666 /6H /*</ B61666 B61666 B61666 B61666 B561666 B561666 B561666 B561666 8961666 8961666 761666 761666 761666 761666 *761666 *761666

B51666 5HH1666

/0

1#0

561666

2011 Pearson Education, Inc. publishing as Prentice Hall

20-223 7 !P0 Re$erve for en!um'ran!e$ En!um'ran!e$ To re u!e en!um'ran!e$ for ,or= !om0lete / E20en "ture$ Contra!t$ 0a3a'le To re!or e20en "ture$ for ,or= !om0lete / 8 /0 OFU @ nonre!"0ro!al tran$fer to DSF Ca$h To re!or tran$fer to DSF/ Ca$h OFS @ nonre!"0ro!al tran$fer from GF To re!or tran$fer from GF/ 9 1#0 E20en "ture$ "ntere$t E20en "ture$ 0r"n!"0al ret"rement Ca$h To re!or e't $erv"!e 0a3ment/ Ca$h OFS @ >ro!ee $ from 'on $ To re!or "$$uan!e of 'on $/ 561666 *61666 E61666 *661666 *661666 861666 861666 861666 861666 B561666 B561666 B561666 B561666

1#0

10

!P0

!it. of !ata*ina Ca0"tal >ro:e!t$ Fun Statement of Revenue$1 E20en "ture$1 an Change$ "n Fun )alan!e for the 3ear en e June B61 5675 Other f"nan!"ng $our!e$% >ro!ee $ from 'on $ E20en "ture$% Ca0"tal outla3 Other f"nan!"ng u$e$ OFS @ nonre!"0ro!al tran$fer out Total e20en "ture$ an other f"nan!"ng u$e$ E2!e$$ of revenue$ an other f"nan!"ng $our!e$ over e20en "ture$ an other f"nan!"ng u$e$ Fun 'alan!e1 Jul3 71 5677 Fun 'alan!e June B61 5675 4716761666 49+61666 761666 9*61666 B961666 @@@ 4 B961666

2011 Pearson Education, Inc. publishing as Prentice Hall

20-224 !it. of !ata*ina Ca0"tal >ro:e!t$ Fun )alan!e Sheet June B61 5675 )ssets Ca$h Total a$$et$ *iabilities and Fund +alance L"a'"l"t"e$% Contra!t$ 0a3a'le Contra!t$ 0a3a'le reta"ne 0er!entage Fun 'alan!e% Re$tr"!te Comm"tte Total l"a'"l"t"e$ an fun 'alan!e 4 E751666 4 E751666

4B561666 B51666 4B561666 +61666

4 B*51666 B961666 4 E751666

2011 Pearson Education, Inc. publishing as Prentice Hall