Chapter 4 Case Study

Required: Book journal entries for the following transactions in both the General Fund ledger and Government-Wide/Governmental Activities ledger.

1. The budget FY 2022 for the Town of Brighton authorizes expenditures of $3,700,000 allocated to the the following: General Government $600,000, Public Safety $1,340,000, Public Works $1,200,000, Health and Welfare $430,000, Culture and Recreation $100,000 and Miscellaneous $30,000. Forecasted revenues of $3,980,000 were authorized and allocated to the following functions/programs: Property Taxes $2,520,000, Interest and Penalties on Delinquent Taxes $20,000, Sales taxes $550,000, Licenses and Permits $305,000, Fines and Forfeits $260,000, Intergovernmental Revenue, $170,000, Charges for Services $130,000 and Miscellaneous Revenues $25,000 for FY 2020. The entry to record the budget is:

General Fund:

Governmental Activities:

2. The Town of Brighton placed purchase orders for supplies totaling $65,150 for the following programs: General Government $26,000, Public Works $19,500, Health and Welfare $12,000, Culture & Recreation $7,650. The entry to record this transaction would be:

General Fund:

Governmental Activities:

3. Assume that only a portion of the supplies was filled and completed during the year at an actual cost of $32,500, for which the estimated cost had been $33,750. The breakdown of the estimated costs is as follows for the portion of the goods that came in is as follows: General Government $21,000, Public Works $9,500, Health and Welfare $1,000 and Culture and Recreation $2,250. The allocation to function/program for actual costs is as follows: General Government $20,800, Public Works $9,200, Health and Welfare $700, and Culture and Recreation $1,800. The Town of Brighton received the invoice for the goods but has yet to pay for them.

General Fund:

Governmental Activities:

4. In addition to supplies, the police department authorized the purchase of a new copier. It was ordered with an estimated cost of $30,000.

General Fund:

Governmental Activities:

5. The copier was received at an actual cost of $29,750 and the government has yet to pay the invoice. The copier qualifies as a long-lived asset according to the governments capitalization policy.

General Fund:

Governmental Activities:

6. Bills were paid in the amount of $62,250 to pay the outstanding liability account Vouchers Payable.

General Fund:

Governmental Activities:

7. For FY 2022, the City of Brighton sends out property tax invoices based on required tax revenue of $2,600,000, and it is estimated that 4% will be uncollectible.

General Fund:

Governmental Activities:

8. The City of Brighton collected $2,042,033 of current property taxes.

General Fund:

Governmental Activities:

9. The citys accountant reclassifies uncollected current taxes to a delinquent status at year-end.

General Fund:

Governmental Activities:

10. Historically, the Town of Brighton does not collect a significant amount of delinquent taxes early in the following year and does not expect to collect delinquent property taxes within 60 days of year-end. The citys accountant reclassified the outstanding property tax revenue as a deferred inflow of resources.

General Fund:

Governmental Activities:

11. The citys accountant accrued interest and penalties of $12,200, of which they expect to collect $9,750 of that amount.

General Fund:

Governmental Activities:

12. The City of Brighton collected property taxes from delinquent taxpayers in the amount of $106,520, of which $10,400 was accrued for interest and penalties

General Fund:

Governmental Activities:

13. The treasurer of the City of Brighton received approval to write off delinquent taxes totaling $18,600 and related interest and penalties of $2,500.

General Fund:

Governmental Activities:

14. The City of Brighton collected revenues from the following sources in 2022: Sales Tax $545,800, Fines and Forfeits assessed by Public Safety $255,000, fines and forfeits assessed by Public Works $250,000, Licenses and Permits assessed by the General Government $100,000, Charges for Services received by Culture and Recreation $107,000 and Miscellaneous revenue of $10,200.

General Fund:

Governmental Activities:

15. The City of Brighton recorded expenditures of $3,616,000 relating to the operations of the government and allocated to the following functions and programs in 2022: General Government $579,000, Public Safety $1,310,000, Public Works $1,190,000, Health and Welfare $429,000, Culture and Recreation $98,000 and Miscellaneous $10,000.

General Fund:

Governmental Activities:

16. At year-end, all temporary accounts, both budgetary and opening were closed to the appropriate fund balance. (General Fund only)

General Fund:

17. Upon inspection, the accountant determined that there are two constrained revenues unspent at the end of fiscal 2022: $22,900 of sales taxes committed for constructing a hiking trail (in the Culture and Recreation program), and $33,500 of General Fund resources that the town manager has assigned for acquisition and installation of downtown security cameras. (General Fund only)

General Fund: