Question

Comprehensive Set of Transactions. The City of Lynnwood was recently incorporated and had the following transactions for the fiscal year ended December 31, 2017.

·         The city council adopted a General Fund budget for the fiscal year. Revenues were estimated at $3,000,000 and appropriations were $2,990,000.

·         Property taxes in the amount of $2,000,000 were levied. It is estimated that $8,000 of the taxes levied will be uncollectible.

·         A General Fund transfer of $30,000 in cash and $300,000 in equipment (with accumulated depreciation of $65,000) was made to establish a central duplicating internal service fund.

·         A citizen of Lynnwood donated marketable securities with a fair value of $900,000. The donated resources are to be maintained in perpetuity with the city using the revenue generated by the donation to finance an after school program for children, which is sponsored by the parks and recreation function. Revenue earned and received as of December 31, 2017, was $45,000.

·         The city's utility fund billed the city's General Fund $125,000 for water and sewage services. As of December 31, the General Fund had paid $124,000 of the amount billed.

·         The central duplicating fund purchased $4,500 in supplies.

·         Cash collections recorded by the general government function during the year were as follows:

Property taxes	$1,925,000
Licenses and permits	35,000
User charges	28,000

·         During the year the internal service fund billed the city's general government function $15,700 for duplicating services and it billed the city's utility fund $8,100 for services.

·         The city council decided to build a city hall at an estimated cost of $5,000,000. To finance the construction, 6 percent bonds were sold at the face value of $5,000,000. A contract for $4,500,000 has been signed for the project; how- ever no expenditures have been incurred as of December 31, 2017.

·         The general government function issued a purchase order for $32,000 for computer equipment. When the equipment was received, a voucher for $31,900 was approved for payment and payment was made.

Using this information, prepare all journal entries to properly record each transaction for the fiscal year ended December 31, 2017. Use the following funds and government-wide activities, as necessary:

General Fund	GF
Capital projects fund	CPF
Internal service fund	ISF
Permanent fund	PF
After School Fund (a special revenue fund)	SRF
Enterprise fund	EF
Governmental activities	GA

Each journal entry should be numbered to correspond with each transaction. Do not prepare closing entries.

Your answer sheet should be organized as follows:

Transaction Number	Fund or Activity	Account Title	Amounts
			Debits	Credits

Answer 1

Record the following journal entries:

No.	Fund	Account Title and Explanation	Debit	Credit
1	GF	Estimated revenues	$3,000,000
		Appropriations		$2,990,000
		Budgetary fund balance		$10,000
		To record the budget
2	GF	Taxes receivable -current	$2,000,000
		Revenues		$1,992,000
		Estimated uncollectible taxes - current		$8,000
		To record taxes levied
	GA	Taxes receivable -current	$2,000,000
		Revenues		$1,992,000
		Estimated uncollectible taxes - current		$8,000
		To record taxes levied
3	GF	Other financing uses-Interfund transfer out	$30,000
		Cash		$30,000
		To record interfund transfer
	ISF	Cash	$30,000
		Equipment	$300,000
		Accumulated depreciation		$65,000
		Transfers in		$265,000
		To record interfund transfer
4	PF	Investments - Marketable securities	$900,000
		Revenues - Contributions for endowment		$900,000
		To record donated resource
		Cash	$45,000
		Revenues-Investment income		$45,000
		To record income from marketable securities
	PF	Other financing uses-Interfund transfers out	$45,000
		Cash		$45,000
		To record interfund transfer
	SRF	Cash	$45,000
		Other financing sources-Interfund transfers in		$45,000
		To record interfund transfer
	GA	Investments - Marketable securities	$900,000
		Revenues - Contributions for endowment		$900,000
		To record donated resource
		Cash	$45,000
		Program Revenues-Parks and Recreation		$45,000
		To record income from marketable securities
5	EF	Due from other funds	$125,000
		Charges for services		$125,000
		To record service charges billed
		Cash	$124,000
		Due from other funds		$124,000
		To record cash collected
	GF	Expenditures	$125,000
		Due to other funds		$125,000
		To record service charges incurred
		Due to other funds	$124,000
		Cash		$124,000
		To record cash paid
	GA	Expenses - General government	$125,000
		Internal balances		$125,000
		To record service charges incurred
		Internal balances	$124,000
		Cash		$124,000
		To record cash paid
6	ISF	Supplies inventory	$4,500
		Cash		$4,500
		To record supplies purchased
	GA	Supplies inventory	$4,500
		Cash		$4,500
		To record supplies purchased
7	GF	Cash	$1,988,000
		Taxes receivable - current		$1,925,000
		Revenues ($35,000 + $28,000)		$63,000
		To record taxes, fees and charges collected
	GA	Cash	$1,988,000
		Taxes receivable - current		$1,925,000
		Program revenues - General government		$63,000
		To record taxes, fees and charges collected
8	ISF	Due from other funds ($15,700 + $8,100)	$23,800
		Departments billed		$23,800
		To record services billed
	EF	Administrative Expenses	$8,100
		Due to other funds		$8,100
		To record administrative expenses incurred
	GF	Expenses-General government	$15,700
		Due to other funds		$15,700
		To record expenses incurred
	GA	Internal balances	$8,100
		Program revenue-General government		$8,100
		To record services revenue
9	CPF	Cash	$5,000,000
		Other financing sources-6% Bond Proceeds		$5,000,000
		To record 6% bonds issued
		Encumbrances	$4,500,000
		Outstanding encumbrances		$4,500,000
		To record encumbrances
	GA	Cash	$5,000,000
		6% Bonds payable		$5,000,000
		To record 6% bonds issued
10	GF	Encumbrances	$32,000
		Outstanding encumbrances		$32,000
		To record encumbrances
		Outstanding encumbrances	$32,000
		Expenditures	$31,900
		Encumbrances		$32,000
		Cash		$31,900
		To record cash payment and reverse encumbrances
	GA	Equipment	$31,900
		Cash		$31,900
		To record cash payment