Chapter 7 Recording Transactions Affecting the Enterprise Fund and Business-type Activities

The City of Smithville accounts for its solid waste collection and disposal activities in an enterprise fund. The balance sheet for the Solid Waste Disposal Fund as of December 31, 2016, appears below.

CITY OF SMITHVILLE

Solid Waste Disposal Fund

Post-closing Trial Balance

As of December 31, 2016

Account Title Debits Credits

Cash $ 315,000

Customer Accounts Receivable 117,100

Allowance for Doubtful Accounts $ 6,140

Due from Other Funds 6,400

Inventories 4,060

Land 600,000

Buildings 1,650,000

Accumulated DepreciationBuildings 791,250

Equipment 1,340,400

Accumulated DepreciationEquipment 755,640

Vouchers Payable 45,180

Due to Other Funds 12,000

Accrued Payroll and Fringe Benefits 66,720

Net PositionNet Investment in Capital Assets 2,043,510

Net PositionUnrestricted 312,520

Totals $4,032,960 $4,032,960

Required

Open a general journal as of December 31, 2016, for the Solid Waste Disposal Fund by entering each of the accounts and amounts shown in the above post-closing trial balance. Enter 2016 from the drop-down [Year] menu. Each of the account titles will be found in the drop down menu [Account (# - Description)] in the [Journal] view of the program. Be sure to enter 7-a as your paragraph number in the [Transaction Description] box and enter the appropriate paragraph number for all subsequent journal entries. Verify the accuracy of your journal entry and post it to the general ledger by clicking [Post Entries]. Unless your instructor specifies electronic submission, print a post-closing trial balance as of December 31, 2016, and retain it in your cumulative file until directed by your instructor to submit it.

Entries in this enterprise fund are not recorded at the government-wide level since enterprise funds and business-type activities at the government-wide level both use the same (accrual) basis of accounting and same (economic resources) measurement focus. Thus, the same information recorded in the accounts of the enterprise fund can also, with only slight modification, be reported as business-type activities at the government-wide level.

Before closing the City of Smithville, click on [File], and [Save/Save As] to save your work. If you close the file by clicking on the [X] box you will be asked if you want to save your changes before closing.