Question

In: Accounting

P9-7 (Interfund-GCA-GLTL Entries) Prepare all entries that a state or local government should make to record...

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.

Solutions

Expert Solution

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)


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