Question: 1 Christie County established a self insurance program in 20X8 by

1. Christie County established a self-insurance program in 20X8 by transferring $2 million of General Fund resources to an Internal Service Fund that is to be used to account for the county’s self-insurance program.
2. An actuarial study indicated that to provide the appropriate loss reserve for the county’s self-insurance program for risks self-insured for various departments, $75,000 should be charged to the General Fund for the year and $15,000 to the various Enterprise Funds of the county. The $75,000 General Fund payment was made to the Self-Insurance Fund and $30,500 was paid from the Enterprise Funds to cover the estimated cost chargeable to those funds for the next fiscal year as well as the current year’s cost.
3. Administrative expenses payable from the Internal Service Fund totaled $3,600.
4. Claims filed against the county during the year were settled for $42,000 (paid).
5. The county attorney estimated that it is probable that the county will incur additional losses from current year incidents, giving rise to claims and judgments of $36,000. Of those claims, $22,000 probably will be settled and paid within 30 to 60 days after the end of the year; the remainder most likely will not be finally settled for at least two to three years. In addition, it is reasonably likely that other claims for events occurring during 20X8 will result in additional losses of $4,200.

a. Prepare the journal entries required in 20X8 for the Christie County Self-Insurance Fund.
b. Prepare the Internal Service Fund journal entries that would have been required in transactions 4 and 5 if (1) there were no Self-Insurance Internal Service Fund—and thus transactions 1, 2, and 3 had not occurred, and (2) all of the claims relate to the Central Printing Internal Service Fund.

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  • CreatedOctober 25, 2014
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