Question

The Town of Bedford Falls approved a General Fund operating budget for the fiscal year ending June 30, 2017. The budget provides for estimated revenues of $2,700,000 as follows: property taxes, $1,900,000; licenses and permits, $350,000; fines and forfeits, $250,000; and intergovernmental (state grants), $200,000. The budget approved appropriations of $2,650,000 as follows: General Government, $500,000; Public Safety, $1,600,000; Public Works, $350,000; Culture and Recreation, $150,000; and Miscellaneous, $50,000.

  

Required

a&b.

Prepare the journal entry (or entries), to record the Town of Bedford Falls’s General Fund operating budget on July 1, 2016, the beginning of the Town’s 2017 fiscal year and also record the following transactions that occurred during the month of July 2016. Also show entries in the subsidiary ledger accounts, to record the Town of Bedford Falls’s General Fund operating budget on July 1, 2016, the beginning of the Town’s 2017 fiscal year. (If no entry is required for a transaction/event, select "No Journal Entry Required" in the first account field.)

   

1.	Revenues were collected in cash amounting to $31,000 for licenses and permits and $12,000 for fines and forfeits.
2.	Supplies were ordered by the following functions in early July 2016 at the estimated costs shown:

General Government	$	7,400
Public Safety		11,300
Public Works		6,100
Culture and Recreation		4,200
Miscellaneous		900
Total	$	29,900

3.	During July 2016, supplies were received at the actual costs shown below and were paid in cash. General Government, Culture and Recreation, and Miscellaneous received all supplies ordered. Public Safety and Public Works received part of the supplies ordered earlier in the month at estimated costs of $10,700 and $5,900, respectively.

	Actual Cost			Estimated Cost
General Government	$	7,300		$	7,400
Public Safety		10,800			10,700
Public Works		6,100			5,900
Culture and Recreation		4,100			4,200
Miscellaneous		900			900
Total	$	29,200		$	29,100

Record the Town of Bedford Falls’s General Fund operating budget on July 1, 2016, the beginning of the town’s 2017 fiscal year.

Revenues were collected in cash amounting to $31,000 for licenses and permits and $12,000 for fines and forfeits.

Record the issuance of the purchase orders and contracts.

Record the issuance of the purchase orders and contracts.

Record the cash paid for expenses.

	Date General Journal Debit Credit

          

          TOWN OF BEDFORD FALLS

Revenues Ledger
Account Description	Est Revenues Dr (Cr)	Revenues Cr (Dr)	Balance Dr (Cr)
Taxes
Budget			0
			0
Licenses and Permits
Budget			0
Cash collected			0
Fines and Forfeits
Budget			0
Cash collected			0
Intergovernmental Revenues
Budget			0
			0

          TOWN OF BEDFORD FALLS

Appropriations, Expenditures, and Encumbrances Ledger
	Encumbrances			Expenditures
Account/Description	Increase Dr	Decrease (Cr)	Balance Dr (Cr)	Increase Dr (Cr)	Balance Dr (Cr)	Appropriations Cr (Dr)	Balance Cr (Dr)
General Government
Appropriations
Order of Supplies					0
Supplies received
Public Safety
Appropriations
Order of Supplies					0
Supplies received
Public Works
Appropriations
Order of Supplies					0
Supplies received
Culture and Recreation
Appropriations
Order of Supplies					0
Supplies received
Miscellaneous
Appropriations
Order of Supplies					0
Supplies received

c.	Calculate the amount of budgeted but unrealized revenues in total and from each source as of July 31, 2016.

           Source

	Budgeted	Actual	Unrealized Revenue
Property Taxes			$0
Licenses and Permits			0
Fines and Forfeits			0
Intergovernmental			0
Total	$0	$0	$0

d.	Calculate the amount of available appropriation in total and for each function as of July 31, 2016.

           

	Appropriations Encumbrances Expenditures Available Appropriations General Government         Public Safety         Public Works         Culture and Recreation         Miscellaneous         Total $0 $0 $0 $0

Answer 1

Part a & b)

		General Ledger			Subsidiary Ledger
		Debit	Credit		Debit	Credit
Part a)	Estimated Revenues	$2,700,000
	Budgetary Fund Balance		$50,000
	Appropriations		$2,650,000
	Estimated Revenues Ledger:
	Taxes				$1,900,000
	Licenses and Permits				$350,000
	Fines and Forfeits				$250,000
	Intergovernmental Revenues				$200,000
	Appropriations Ledger:
	General Government					$500,000
	Public Safety					$1,600,000
	Public Works					$350,000
	Culture and Recreation					$150,000
	Miscellaneous					$50,000
Part b)
1)	Cash	$43,000
	Revenues		$43,000
	Revenues Ledger:
	Licenses and Permits					$31,000
	Fines and Forfeits					$12,000
2)	Encumbrances-2017	$29,900
	Reserve for Encumbrances-2017		$29,900
	Encumbrances Ledger:
	General Government				$7,400
	Public Safety				$11,300
	Public Works				$6,100
	Culture and Recreation				$4,200
	Miscellaneous				$900
3)	Reserve for Encumbrances-2017	$29,100
	Encumbrances-2017		$29,100
	Expenditures-2017	$29,200
	Cash		$29,200
	Encumbrances Ledger:
	General Government					$7,400
	Public Safety					$10,700
	Public Works					$5,900
	Culture and Recreation					$4,200
	Miscellaneous					$900
	Expenditures Ledger:
	General Government				$7,300
	Public Safety				$10,800
	Public Works				$6,100
	Culture and Recreation				$4,100
	Miscellaneous				$900

_____

Part c)

The completed table is given as belows:

	Budgeted (A)	Actual (B)	Unrealized Revenue (A-B)
Property Taxes	1,900,000	0	1,900,000
Licenses and Permits	350,000	31,000	319,000
Fines and Forfeits	250,000	12,000	238,000
Intergovernmental	200,000	0	200,000
Total	$2,700,000	$43,000	$2,657,000

_____

Part d)

The completed table is given as belows:

	Appropriations (C)	Encumbrances (D)	Expenditures (E)	Available Appropriations (C-D-E)
General Government	500,000	0	7,300	492,700
Public Safety	1,600,000	600	10,800	1,588,600
Public Works	350,000	200	6,100	343,700
Culture and Recreation	150,000	0	4,100	145,900
Miscellaneous	50,000	0	900	49,100
Total	$2,650,000	$800	$29,200	$2,620,000

Answers can be found in the Explanation section.