Question

Transaction Reporting in Fund and Government-Wide Statements

Consider the following transactions of Daley County:

1. General property taxes of $4,500,000 are levied.

2. Grants of $850,000 are received from the state to finance public safety programs.

3. Investment income of $55,000 is earned and received in cash on investments of a debt service fund.

4. Investment income of $85,000 is earned and received in cash on investments made using money received from a generous citizen. The money is held in trust to finance acquisitions of the public art gallery, outlays are limited to earnings and the original contribution cannot be spent.

5. User fees of $45,000 are received from operations of the community pool.

6. Depreciation on public safety equipment is $35,000 for the year.

7. Investment income of $25,000 is earned and received in cash on general fund investments of excess cash.

8. The motor pool submits $32,000 in charges for vehicle use to other units in the government.

9. Current year accrued interest on general long-term debt is $30,000, and is not due for several years.

Required

For each transaction:

• Indicate the fund affected and prepare the journal entry required in the fund financial statements.  
• Indicate whether the transaction is considered a governmental or business-type activity in the government-wide financial statements and prepare the journal entry required in the government-wide financial statements.

Note:  If an item is not reported in a fund statement and/or in the government-wide statements, select Not applicable and No entry.  

1. General property taxes of $4,500,000 are levied.

Fund financial statements:

Which fund is the transaction recorded in?

AnswerDebt service fundEnterprise fundGeneral fundInternal service fundPermanent fundSpecial revenue fundNot applicable

Answer 1

1. General property taxes of $4,500,000 are levied

General Fund	Governmental Activities
Property Taxes Receivable          $4500000             Revenues                                         $4500000	Property Taxes Receivable          $4500000             Revenues                                          4500000

2. Grants of $850,000 are received from the state to finance public safety programs.

Special Revenue Funds	Governmental Activities
Cash   $850,000          Deferred Revenue                    $850,000	Cash                                        $850,000          Deferred Revenue                    $850,000

3. Investment income of $55,000 is earned and received in cash on investments of a debt service fund.

Debt Service Fund	Governmental Activities
Cash $55000 Interest Income $55000	Cash $55000 Interest Income $55000

4. Investment income of $85,000 is earned and received in cash on investments made using money received from a generous citizen. The money is held in trust to finance acquisitions of the public art gallery, outlays are limited to earnings and the original contribution cannot be spent.

Capital Projects Fund	Governmental Activities
Cash $85000 Interest Income $85000	Cash $85000 Interest Income $85000

5. User fees of $45,000 are received from operations of the community pool.

General Fund	Governmental Activities
Cash $45000            Revenues   $45000	Cash $45000            Revenues   $45000

6. Depreciation on public safety equipment is $35,000 for the year.

General Fund	Governmental Activities
·         no depreciation is recorded	Depreciation Expense                        $35,000                Accumulated Depreciation             $35,000

7. Investment income of $25,000 is earned and received in cash on general fund investments of excess cash.

General Fund	Governmental Activities
Cash $25000            Interest Income   $25000	Cash $25000            Interest Income   $25000

8. The motor pool submits $32,000 in charges for vehicle use to other units in the government.

Internal Service Fund	Governmental Activities
Expenditure $32000 Vehicle Charges $32000	Expenditure $32000 Vehicle Charges $32000

9. Current year accrued interest on general long-term debt is $30,000, and is not due for several years.

Debt Service Fund	Governmental Activities
Interest Exp 30000            Interest Payable $25000	Interest Exp 30000            Interest Payable $25000

Feel free to ask any Query in Comment Section

Please provide feedback.

Cheers