ACC 560 Week 8 Assignment
P12-2A Tony Siebers is an accounting major at a midwestern state university located approximately 60 miles from a major city. Many of the students attending the university are from the metropolitan area and visit their homes regularly on the weekends. Tony, an entrepreneur at heart, realizes that few good commuting alternatives are available for students doing weekend travel. He believes that a weekend commuting service could be organized and run profitably from several suburban and downtown shopping mall locations. Tony has gathered the following investment information.
1. Five used vans would cost a total of $75,000 to purchase and would have a 3-year useful life with negligible salvage value. Tony plans to use straight-line depreciation.
2. Ten drivers would have to be employed at a total payroll expense of $48,000.
3. Other annual out-of-pocket expenses associated with running the commuter service would include Gasoline $16,000, Maintenance $4,300, Repairs $5,000, Insurance $5,200, Advertising $2,500.
4. Tony has visited several financial institutions to discuss funding. The best interest rate he has been able to negotiate is 8%. Use this rate for cost of capital.
5. Tony expects each van to make 10 round trips weekly and carry an average of 6 students each trip. The service is expected to operate 30 weeks each year, and each student will be charged $12.00 for a round-trip ticket.
Instructions
(a) Determine the annual (1) net income and (2) net annual cash flows for the commuter service.
(b) Compute (1) the cash payback period and (2) the annual rate of return. (Round to two decimals.)
(c) Compute the net present value of the commuter service. (Round to the nearest dollar.)
(d) What should Tony conclude from these computations? Is the commuter service a wise investment?
Click here for the solution: Tony Siebers is an accounting major at a midwestern state university located approximately 60 miles from a major city
Showing posts with label city. Show all posts
Showing posts with label city. Show all posts
Thursday, September 24, 2015
Wednesday, September 23, 2015
Beige Corporation operates retail stores in both downtown (city) and Suburban (Mall) locations
1-18 Cost Data for Managerial Purposes
Beige Corporation operates retail stores in both downtown (city) and Suburban (Mall) locations. The company has two responsibility centers; the City Division, which contains stores in downtown locations, and the Mall Division, which contains stores in suburban locations. Beige’s CEO is concern about the profitability of the City Division, which has been operating at a loss for the last several years. The most recent income statement follows. The CEO has asked for your advice on shutting down the City Division’s operations. If the City Division is eliminated, corporate administration is not expected to change, nor are any other changes expected in the operations or costs of the Mall Division.
Beige Computers, City Division
Divisional Income Statement
For the Year Ending January 31
Sales revenue ………………………………………………………………. $12,900,000
Costs
Advertising – City Division ………………………………………… 525,000
Cost of goods sold ………………………………………………… 6,450,000
Divisional administrative salaries ……………………………… 870,000
Selling costs (sales commissions) ……………………………… 1,730,000
Rent …………………………………………………………………………. 2,215,000
Share of corporate administration ……………………….. 1,425,000
Total costs ……………………………………………………………. $13,215,000
Net loss before income tax benefit …………………… $(315,000)
Tax benefit at 40% rate …………………………………………… 126,200
Net loss …………………………………………………………….. $189,000
Required
What revenues and costs are probably differential for the decision to discontinue City division’s operations? What will be the effect on Beige’s profits if the division is eliminated?
Click here for the solution: Beige Corporation operates retail stores in both downtown (city) and Suburban (Mall) locations
Beige Corporation operates retail stores in both downtown (city) and Suburban (Mall) locations. The company has two responsibility centers; the City Division, which contains stores in downtown locations, and the Mall Division, which contains stores in suburban locations. Beige’s CEO is concern about the profitability of the City Division, which has been operating at a loss for the last several years. The most recent income statement follows. The CEO has asked for your advice on shutting down the City Division’s operations. If the City Division is eliminated, corporate administration is not expected to change, nor are any other changes expected in the operations or costs of the Mall Division.
Beige Computers, City Division
Divisional Income Statement
For the Year Ending January 31
Sales revenue ………………………………………………………………. $12,900,000
Costs
Advertising – City Division ………………………………………… 525,000
Cost of goods sold ………………………………………………… 6,450,000
Divisional administrative salaries ……………………………… 870,000
Selling costs (sales commissions) ……………………………… 1,730,000
Rent …………………………………………………………………………. 2,215,000
Share of corporate administration ……………………….. 1,425,000
Total costs ……………………………………………………………. $13,215,000
Net loss before income tax benefit …………………… $(315,000)
Tax benefit at 40% rate …………………………………………… 126,200
Net loss …………………………………………………………….. $189,000
Required
What revenues and costs are probably differential for the decision to discontinue City division’s operations? What will be the effect on Beige’s profits if the division is eliminated?
Click here for the solution: Beige Corporation operates retail stores in both downtown (city) and Suburban (Mall) locations
Sunday, September 6, 2015
The following totals were drawn from Independence City’s “Schedule of Changes in Capital Assets by Function and Activity”
P. 7-4 Governments sometimes add to, but do not delete, their capital assets.
The following totals were drawn from Independence City’s “Schedule of Changes in Capital Assets by Function and Activity,” included in the city’s financial statements for the year ending June 30, 2012:
General capital assets, July, 1, 2011 $33,276,151
Additions/transfers-in 459,430
Deletions/transfers-out (265,795)
General capital assets, June 30, 2012 $33,469,786
The complete schedule disaggregates the data by function (e.g., general government, public safety, public works, health and welfare, culture, and recreation) and subfunction (e.g., park maintenance, recreation, tourism). Another schedule, “Schedule of General Capital Assets by Source,” shows the beginning and ending balances of the specific types of assets:
Type of Asset 2012 2011
Land $ 8,209,380 $ 8,209,380
Buildings $ 9,293,847 $ 9,292,611
Improvements other $ 1,088,307 $ 1,088,307
than buildings
Office furniture and $ 4,863,535 $ 4,536,506
equipment
Mobile equipment $ 7,834,277 $ 8,073,945
Other equipment $ 2,180,440 $ 2,075,402
Total $ 33,469,786 $ 33,276,151
1. Assume that the assets, excluding land, had an average useful life of 20 years. What percentage of the total assets, excluding land, would you expect to have been retired each year?
2. What percentage of the assets (beginning of year values). Excluding land, were actually retired during 2012 (assuming that all deletions/transfers out represent retirements?
3. What was the average useful life of the assets as implied by this percentage?
4. Assume that the entire $265,795 of the deletions and transfers-out applied to the mobile equipment. What would have been the useful life of the equipment as suggested by the percentage of the equipment retired?
Click here for the solution: The following totals were drawn from Independence City’s “Schedule of Changes in Capital Assets by Function and Activity”
The following totals were drawn from Independence City’s “Schedule of Changes in Capital Assets by Function and Activity,” included in the city’s financial statements for the year ending June 30, 2012:
General capital assets, July, 1, 2011 $33,276,151
Additions/transfers-in 459,430
Deletions/transfers-out (265,795)
General capital assets, June 30, 2012 $33,469,786
The complete schedule disaggregates the data by function (e.g., general government, public safety, public works, health and welfare, culture, and recreation) and subfunction (e.g., park maintenance, recreation, tourism). Another schedule, “Schedule of General Capital Assets by Source,” shows the beginning and ending balances of the specific types of assets:
Type of Asset 2012 2011
Land $ 8,209,380 $ 8,209,380
Buildings $ 9,293,847 $ 9,292,611
Improvements other $ 1,088,307 $ 1,088,307
than buildings
Office furniture and $ 4,863,535 $ 4,536,506
equipment
Mobile equipment $ 7,834,277 $ 8,073,945
Other equipment $ 2,180,440 $ 2,075,402
Total $ 33,469,786 $ 33,276,151
1. Assume that the assets, excluding land, had an average useful life of 20 years. What percentage of the total assets, excluding land, would you expect to have been retired each year?
2. What percentage of the assets (beginning of year values). Excluding land, were actually retired during 2012 (assuming that all deletions/transfers out represent retirements?
3. What was the average useful life of the assets as implied by this percentage?
4. Assume that the entire $265,795 of the deletions and transfers-out applied to the mobile equipment. What would have been the useful life of the equipment as suggested by the percentage of the equipment retired?
Click here for the solution: The following totals were drawn from Independence City’s “Schedule of Changes in Capital Assets by Function and Activity”
The City of Sweetwater maintains an Employees’ Retirement Fund, a single-employer, defined benefit plan that provides annuity and disability benefits
7-13 The City of Sweetwater maintains an Employees’ Retirement Fund, a single-employer, defined benefit plan that provides annuity and disability benefits. The fund is financed by actuarially determined contributions from the city’s General Fund and by contributions from employees. Administration of the retirement fund is handled by General Fund employees, and the retirement fund does not bear any administrative expenses. The Statement of Net Assets for the Employees’ Retirement Fund as of July 1, 2011, is shown here:
CITY OF SWEETWATER
Employees' Retirement Fund
Statement of Net Assets
As of July 1, 2011
Assets
Cash $ 50,000
Accrued interest receivable 135,000
Investments, at fair value:
Bonds 4,500,000
Common stocks 1,300,000
Total assets 5,985,000
Liabilities
Accounts payable and accrued expenses 350,000
Net assets held in trust for preparation for benefits $5,635,000
During the year ended June 30, 2012, the following transaction occurred:
The interest receivable on investments was collected in cash.
Member contributions in the amount of $400,000 were received in cash. The city’s General Fund also contributed $600,000 in cash.
Annuity benefits of $700,000 and disability benefits of $150,000 were recorded as liabilities.
Accounts payable and accrued expenses in the amount of $900,000 were paid in cash.
Interest income of $240,000 and dividends in the amount of $40,000 were received in cash. In addition, bond interest income of $140,000 was accrued at year-end.
Refunds of $130,000 were made in cash to terminated, nonvested participants.
Common stocks, carried at a fair value of $500,000, were sold for $480,000. That $480,000, plus an additional $300,000, was invested in stocks.
At year-end, it was determined that the fair value of stocks held by the pension plan had decreased by $50,000; the fair value of bonds had increased by $30,000.
Nominal accounts for the year were closed.
a.) Record the transactions on the books of the Employees’ Retirement Fund.
b.) Prepared a Statement of Changes in Net Assets for the Employees’ Retirement Fund for the Year Ended June 30, 2012.
c.) Prepare a Statement of Net Assets for the Employees’ Retirement Fund as of June 30, 2012.
Click here for the solution: The City of Sweetwater maintains an Employees’ Retirement Fund, a single-employer, defined benefit plan that provides annuity and disability benefits
CITY OF SWEETWATER
Employees' Retirement Fund
Statement of Net Assets
As of July 1, 2011
Assets
Cash $ 50,000
Accrued interest receivable 135,000
Investments, at fair value:
Bonds 4,500,000
Common stocks 1,300,000
Total assets 5,985,000
Liabilities
Accounts payable and accrued expenses 350,000
Net assets held in trust for preparation for benefits $5,635,000
During the year ended June 30, 2012, the following transaction occurred:
The interest receivable on investments was collected in cash.
Member contributions in the amount of $400,000 were received in cash. The city’s General Fund also contributed $600,000 in cash.
Annuity benefits of $700,000 and disability benefits of $150,000 were recorded as liabilities.
Accounts payable and accrued expenses in the amount of $900,000 were paid in cash.
Interest income of $240,000 and dividends in the amount of $40,000 were received in cash. In addition, bond interest income of $140,000 was accrued at year-end.
Refunds of $130,000 were made in cash to terminated, nonvested participants.
Common stocks, carried at a fair value of $500,000, were sold for $480,000. That $480,000, plus an additional $300,000, was invested in stocks.
At year-end, it was determined that the fair value of stocks held by the pension plan had decreased by $50,000; the fair value of bonds had increased by $30,000.
Nominal accounts for the year were closed.
a.) Record the transactions on the books of the Employees’ Retirement Fund.
b.) Prepared a Statement of Changes in Net Assets for the Employees’ Retirement Fund for the Year Ended June 30, 2012.
c.) Prepare a Statement of Net Assets for the Employees’ Retirement Fund as of June 30, 2012.
Click here for the solution: The City of Sweetwater maintains an Employees’ Retirement Fund, a single-employer, defined benefit plan that provides annuity and disability benefits
Following are transactions and events of the General Fund of the City of Springfield for the fiscal year ended December 30, 2012
3-12 Following are transactions and events of the General Fund of the City of Springfield for the fiscal year ended December 30, 2012.
1. Estimated revenues (legally budgeted)
Property taxes $5,000,000
Sales taxes 4,000,000
Licenses and permits 1,500,000
Miscellaneous 500,000
2. Appropriations
General government 5,000,000
Culture and recreation 4,500,000
Health and welfare 1,000,000
3. Revenues received (cash)
Property taxes $4,783,541
Sales taxes 4,501,009
Licenses and permits 1,700,000
Miscellaneous 800,000
4. Encumbrances issued (includes salaries and other recurring items)
Estimated
General government 5,100,000
Culture and recreation 4,650,000
Health and welfare 905,000
5. Goods and services received (paid in cash)
Estimated Actual
General government 5,100,000 $5,035,450
Culture and recreation 4,650,000 4,610,000
Health and welfare 905,000 891,550
6. Budget revisions
Increase appropriations:
General government $100,000
Culture and recreation 150,000
7. Fund balance-Unrestricted on January 1 , 2012, was $735,000. There were no outstanding encumbrances at that date.
A. Record the transactions using the appropriate journal entries.
B. Prepare a budgetary comparison schedule for the General Fund.
Click here for the solution: Following are transactions and events of the General Fund of the City of Springfield for the fiscal year ended December 30, 2012
1. Estimated revenues (legally budgeted)
Property taxes $5,000,000
Sales taxes 4,000,000
Licenses and permits 1,500,000
Miscellaneous 500,000
2. Appropriations
General government 5,000,000
Culture and recreation 4,500,000
Health and welfare 1,000,000
3. Revenues received (cash)
Property taxes $4,783,541
Sales taxes 4,501,009
Licenses and permits 1,700,000
Miscellaneous 800,000
4. Encumbrances issued (includes salaries and other recurring items)
Estimated
General government 5,100,000
Culture and recreation 4,650,000
Health and welfare 905,000
5. Goods and services received (paid in cash)
Estimated Actual
General government 5,100,000 $5,035,450
Culture and recreation 4,650,000 4,610,000
Health and welfare 905,000 891,550
6. Budget revisions
Increase appropriations:
General government $100,000
Culture and recreation 150,000
7. Fund balance-Unrestricted on January 1 , 2012, was $735,000. There were no outstanding encumbrances at that date.
A. Record the transactions using the appropriate journal entries.
B. Prepare a budgetary comparison schedule for the General Fund.
Click here for the solution: Following are transactions and events of the General Fund of the City of Springfield for the fiscal year ended December 30, 2012
A government opts to set aside $10 million of general fund resources to finance a new city hall
1. A government opts to set aside $10 million of general fund resources to finance a new city hall. Construction is expected to begin in several years, when the city has been able to accumulate additional resources.
2. A government should distinguish underwriting and other issue costs from bond premiums and discounts and should
3. When a government issues bonds at premiums or discounts and records the proceeds in a capital projects fund, it should
4. A city holds U.S. Treasury notes as an investment in a capital projects fund. During the year the market value of the notes increases by $50,000. Of this amount, $14,000 can be attributed to a decline in prevailing interest rates and $36,000 to interest that has been earned but not yet received. As of year-end, the city should recognize as revenue
5. Which of the following accounts is least likely to be shown on the balance sheet of a debt service fund?
6. Special assessment debt should be reported on the balance sheet of a city if the debt is to be paid from assessments on property owners and
7. In its fund statements a government should recognize revenue from special assessments
8. In the year it imposes a special assessment, a government should recognize in its government-wide statements
9. Under existing federal statutes, arbitrage as it applies to state and local governments
10. Bond refunding are most likely to result in an economic gain when
Click here for the solution: A government opts to set aside $10 million of general fund resources to finance a new city hall
2. A government should distinguish underwriting and other issue costs from bond premiums and discounts and should
3. When a government issues bonds at premiums or discounts and records the proceeds in a capital projects fund, it should
4. A city holds U.S. Treasury notes as an investment in a capital projects fund. During the year the market value of the notes increases by $50,000. Of this amount, $14,000 can be attributed to a decline in prevailing interest rates and $36,000 to interest that has been earned but not yet received. As of year-end, the city should recognize as revenue
5. Which of the following accounts is least likely to be shown on the balance sheet of a debt service fund?
6. Special assessment debt should be reported on the balance sheet of a city if the debt is to be paid from assessments on property owners and
7. In its fund statements a government should recognize revenue from special assessments
8. In the year it imposes a special assessment, a government should recognize in its government-wide statements
9. Under existing federal statutes, arbitrage as it applies to state and local governments
10. Bond refunding are most likely to result in an economic gain when
Click here for the solution: A government opts to set aside $10 million of general fund resources to finance a new city hall
On July 1, a city issued, at par, $100 million in percent, twenty year general obligation bonds
6-7 On July 1, a city issued, at par, $100 million in percent, twenty year general obligation bonds. It established a debt service fund to account for resources set aside to pay interest rates. In the year that it issued the debt, the city engaged in the following transactions involving the debt service fund.
1. It estimated that it would make interest payments of $3 million and have interest earnings of $30,000 from investments. It would transfer from the general fund to the debt service fund$2.97 million to pay interest and $500,000 to provide for the payment of principal when the bonds mature. Further, as required by the bond indentures, it would transfer $1 million of the bond proceeds from the capital projects fund to the debt service fund to be held in reserve until the debt matures.
2. Upon issuing the bonds, the city transferred $1 million of the bond proceeds from the capital projects fund. It invested $977,254 of the funds in twenty – year, 6 percent Treasury bonds that had a face value of $1 million. The bond discount of $22,746 reflected an effective yield rate of 6.2 percent.
3. On December 31, the city received $30,000 interest on the Treasury bonds. This payment represented interest for six months. Correspondingly, the market value of the bonds increased by $294, reflecting the amortization of the discount.
4. On the same day the city transferred $2.97 million from the general fund to pay interest on the bonds that it had issued. It also transferred $500,000 for the eventual repayment of principal.
5. Also on December 31, it made its first interest payment of $3 million to bondholders.
a. Prepare appropriate journal entries in the debt service fund, including budgetary and closing entries.
b. The bonds issued by the city pay interest at the rate of 6 percent. The bonds in which the city invested its reserve have an effective yield of 6.2 percent. What might the differences in rates create a potential liability for the city?
Click here for the solution: On July 1, a city issued, at par, $100 million in percent, twenty year general obligation bonds
1. It estimated that it would make interest payments of $3 million and have interest earnings of $30,000 from investments. It would transfer from the general fund to the debt service fund$2.97 million to pay interest and $500,000 to provide for the payment of principal when the bonds mature. Further, as required by the bond indentures, it would transfer $1 million of the bond proceeds from the capital projects fund to the debt service fund to be held in reserve until the debt matures.
2. Upon issuing the bonds, the city transferred $1 million of the bond proceeds from the capital projects fund. It invested $977,254 of the funds in twenty – year, 6 percent Treasury bonds that had a face value of $1 million. The bond discount of $22,746 reflected an effective yield rate of 6.2 percent.
3. On December 31, the city received $30,000 interest on the Treasury bonds. This payment represented interest for six months. Correspondingly, the market value of the bonds increased by $294, reflecting the amortization of the discount.
4. On the same day the city transferred $2.97 million from the general fund to pay interest on the bonds that it had issued. It also transferred $500,000 for the eventual repayment of principal.
5. Also on December 31, it made its first interest payment of $3 million to bondholders.
a. Prepare appropriate journal entries in the debt service fund, including budgetary and closing entries.
b. The bonds issued by the city pay interest at the rate of 6 percent. The bonds in which the city invested its reserve have an effective yield of 6.2 percent. What might the differences in rates create a potential liability for the city?
Click here for the solution: On July 1, a city issued, at par, $100 million in percent, twenty year general obligation bonds
Wednesday, September 2, 2015
The following General Fund information is available for the preparation of the financial statements for the city of Eastern Shores for the year ended September 30, 2012
2-9 The following General Fund information is available for the preparation of the financial statements for the city of Eastern Shores for the year ended September 30, 2012:
Revenues:
Property taxes $27,000,000
Sales taxes 13, 216,000
Fees and fines 1,124,000
Licenses and permits 1,921,000
Intergovernmental 868,000
Investment earnings 654,000
Expenditures:
Current:
General government 8,192,000
Public safety 24,444,000
Public works 6,211,000
Health and sanitation 1,693,000
Culture and recreation 2,154,000
Debt service – principal 652,000
Debt service – interest 821,000
Proceeds of long-term, capital-related debt 2,210,000
Transfer to special revenue fund 1,119,000
Special item – proceeds from sale of land 821,000
Fund balance, October 1, 2011
From the information given above, prepare, in good form, a General Fund Statement of Revenue, Expenditures, and Changes in Fund Balances for the City of Eastern Shores General Fund for the Year Ended September 30, 2012.
Click here for the solution: The following General Fund information is available for the preparation of the financial statements for the city of Eastern Shores for the year ended September 30, 2012
Revenues:
Property taxes $27,000,000
Sales taxes 13, 216,000
Fees and fines 1,124,000
Licenses and permits 1,921,000
Intergovernmental 868,000
Investment earnings 654,000
Expenditures:
Current:
General government 8,192,000
Public safety 24,444,000
Public works 6,211,000
Health and sanitation 1,693,000
Culture and recreation 2,154,000
Debt service – principal 652,000
Debt service – interest 821,000
Proceeds of long-term, capital-related debt 2,210,000
Transfer to special revenue fund 1,119,000
Special item – proceeds from sale of land 821,000
Fund balance, October 1, 2011
From the information given above, prepare, in good form, a General Fund Statement of Revenue, Expenditures, and Changes in Fund Balances for the City of Eastern Shores General Fund for the Year Ended September 30, 2012.
Click here for the solution: The following General Fund information is available for the preparation of the financial statements for the city of Eastern Shores for the year ended September 30, 2012
The following information is available for the preparation of the government-wide financial statements for the city of Northern Pines for the year ended June 30, 2012
2-8. The following information is available for the preparation of the government-wide financial statements for the city of Northern Pines for the year ended June 30, 2012:
Expenses:
General government $10,300,000
Public safety 22,900,000
Public works 11,290,000
Health and sanitation 6,210,000
Culture and recreation 4,198,000
Interest on long-term debt, governmental type 621,000
Water and sewer system 11,550,000
Parking system 419,000
Revenues:
Charges for services, general government 1,110,000
Charges for services, public safety 210,000
Operation grant, public safety 698,000
Charges for services, health and sanitation 2,555,000
Operating grant, health and sanitation 1,210,000
Charges for services, culture and recreation 2,198,000
Charges for services, water and sewer 12,578,000
Charges for services, parking system 398,000
Property taxes 27,112,000
Sales taxes 20,698,000
Investment earnings, business-type 319,000
Special item – gain on sale of unused land,
Governmental type 1,250,000
Transfer from governmental activities to
Business-type activities 688,000
Net assets, July 1, 2011, governmental activities 11,222,000
Net assets, July 1, 2011, business-type activities 22,333,000
From the previous information, prepare, in good form, a Statement of Activities for the city of Northern Pines for the year ended June 30, 2012. Northern Pines has no component units.
Click here for the solution: The following information is available for the preparation of the government-wide financial statements for the city of Northern Pines for the year ended June 30, 2012
Expenses:
General government $10,300,000
Public safety 22,900,000
Public works 11,290,000
Health and sanitation 6,210,000
Culture and recreation 4,198,000
Interest on long-term debt, governmental type 621,000
Water and sewer system 11,550,000
Parking system 419,000
Revenues:
Charges for services, general government 1,110,000
Charges for services, public safety 210,000
Operation grant, public safety 698,000
Charges for services, health and sanitation 2,555,000
Operating grant, health and sanitation 1,210,000
Charges for services, culture and recreation 2,198,000
Charges for services, water and sewer 12,578,000
Charges for services, parking system 398,000
Property taxes 27,112,000
Sales taxes 20,698,000
Investment earnings, business-type 319,000
Special item – gain on sale of unused land,
Governmental type 1,250,000
Transfer from governmental activities to
Business-type activities 688,000
Net assets, July 1, 2011, governmental activities 11,222,000
Net assets, July 1, 2011, business-type activities 22,333,000
From the previous information, prepare, in good form, a Statement of Activities for the city of Northern Pines for the year ended June 30, 2012. Northern Pines has no component units.
Click here for the solution: The following information is available for the preparation of the government-wide financial statements for the city of Northern Pines for the year ended June 30, 2012
Friday, August 21, 2015
The following account balances, among others, were included in the preclosing trial balance of the General Fund of the city of Madison on December 31, 2009
Problem 17-3 (Computing Unreserved Fund Balance and Closing Entries) The following account balances, among others, were included in the preclosing trial balance of the General Fund of the city of Madison on December 31, 2009.
Appropriations $3,488,000
Cash 270,000
Due to Other Fund 100,000
Due from Other Funds 250,000
Encumbrances 382,000
Estimated Revenue 3,720,000
Expenditures 3,020,000
Expenditures---2008 296,000
Reserve for Encumbrance 382,000
Reserve for Encumbrances---2008 310,000
Revenue 3,656,000
Taxes Receivable 600,000
Transfers from Other Funds 300,000
Transfers to Other Funds 520,000
Unreserved Fund Balance 422,000
Vouchers Payable 400,000
a. Prepare the necessary closing entries on December 31, 2009.
b. Calculate the amount of both the unreserved fund balance and the total fund balance in the balance sheet (1) on December 31, 2008 and (2) on December 31, 2009.
c. Prepare a schedule reconciling the December 31, 2008, total fund balance with the December 31, 2009, total fund balance by reference to actual inflows and outflow of financial resources
Click here for the solution: The following account balances, among others, were included in the preclosing trial balance of the General Fund of the city of Madison on December 31, 2009
Appropriations $3,488,000
Cash 270,000
Due to Other Fund 100,000
Due from Other Funds 250,000
Encumbrances 382,000
Estimated Revenue 3,720,000
Expenditures 3,020,000
Expenditures---2008 296,000
Reserve for Encumbrance 382,000
Reserve for Encumbrances---2008 310,000
Revenue 3,656,000
Taxes Receivable 600,000
Transfers from Other Funds 300,000
Transfers to Other Funds 520,000
Unreserved Fund Balance 422,000
Vouchers Payable 400,000
a. Prepare the necessary closing entries on December 31, 2009.
b. Calculate the amount of both the unreserved fund balance and the total fund balance in the balance sheet (1) on December 31, 2008 and (2) on December 31, 2009.
c. Prepare a schedule reconciling the December 31, 2008, total fund balance with the December 31, 2009, total fund balance by reference to actual inflows and outflow of financial resources
Click here for the solution: The following account balances, among others, were included in the preclosing trial balance of the General Fund of the city of Madison on December 31, 2009
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