In: Accounting
P9-7 (Interfund-GCA-GLTL Entries) Prepare all entries that a state or local government should make to record the following transactions and events.
9. The government pays retiree health care benefits on a pay-as-you-go basis. Payments for the year totaled $400,000. Additionally, based on actuarially determined amounts, there was a $2,800,000 increase in the total OPEB liability during 20X6. (Assume there are no adjustments related to deferred outflows or deferred inflows of resources, and none of the liability is for proprietary or fiduciary activities.)
10. Inspection services were performed (internal services) by a department financed through the General Fund for a capital project and billed to the project, $3,000.
11. Maintenance services of $1,800 (recorded earlier as CPF expenditures) were rendered by construction workers paid from a Capital Projects Fund for a department financed through the General Fund. (Record the recognition of this correction prior to payment.)
12. A 6-month loan of $400,000 to be repaid during the current year was made from the General Fund to the Debt Service Fund.
13. A 2-year loan of $2,000,000 was made from the General Fund to a Capital Projects Fund.
14. A government sold police vehicles for $65,000. The vehicles originally cost $480,000 when purchased and are 80% depreciated. The sale proceeds are unrestricted.
15. Cash payments for claims totaled $2,000,000. The fund liability for claims and judgments increased $100,000, to $225,000. The noncurrent portion of the payable decreased by $335,000.
Below are the journal entries that will be recorded in the books.
Health care benefit expenses 4,00,000
To Fund account 4,00,000
(Being health care expenses are incurred by the government)
Inspection cost 3000
To General Funds 3000
(Being inspection cost expenses incurred)
Maintenance expenses 1800
To CPF expenditure 1800
(Being the Wrong GL of CPF is corrected now)
Capital project fund 1800
To General Fund 1800
(Being the payment method is corrected)
Loan paid to debt services fund 4000000
To general Funds 4000000
(Being loans are made from the general funds)
Loan made to capital funds 2000000
To General Fund 2000000
(Being loans are made from the general funds to Capital funds)
General funds 65000
Loss on sale of assets 31000
To Police vehicles 96000
(480000*.20, this will give the present cost of the vehicle)
(Being the vehicle are sold at the loss of 31000)
Claims settled 2000000
To Cash 2000000
(Being the claims are settled with cash)