Question

The Town of Brown has the following financial transactions:

1. The town council adopts an annual budget for the general fund estimating general revenues of $2.0 million, approved expenditures of $1.6 million, approved transfers pf $150,000.

2. The town levies property taxes of $1.5 million. It expects to collect all but 4% of these taxes during the year. Of the levied amount, $50,000 will be collected next year but after more than 60 days.

3. The town orders three new police cars at an approximate cost of $120,000.

4. A transfer of $60,000 is made from the general fund to the debt service fund.

5. The town makes a payment on a bond payable of $50,000 along with $15,000 of interest using the money previously set aside.

6. The Town of Brown issues a $3 million bond at face value in hopes of acquiring a building to convert into a high school.

7. The two police cars are received with an invoice price of $115,000. The voucher has been approved and will not be paid for three weeks.

8. The town purchases the building for the high school for $2.5 million in cash and immediately begins renovating it.

9. Depreciation on the new police cars is computed at $35,000 for the period.

10. The town borrows $120,000 on a 30-day-tax anticipation note.

11. The Town of Brown begins a special assessment curbing project. The government issues $900,000 in notes at face value to finance this project. The town has guaranteed the debt if the assessments collected do not cover the entire balance.

12. A contractor completes the curbing project and is paid $900,000 as agreed.

13. The town assesses citizens $900,000 for the completed curbing project.

14. The town collects the special assessments of $900,000 in full and repays the debt plus $40,000 in interest.

15. The town receives a $20,000 cash grant from a regional charity to beautify a local park. The grant must be used to cover the specific costs that the town incurs.

16. The town spends the first $5,000 to beautify the park.

Question 1. – Please prepare journal entries for the town based on the production of fund financial statements.

Question 2 – Please prepare journal entries in anticipation of preparing government-wide financial statements.

Answer 1