Create the Journal entries for each situation or transaction.

1. The city council of Rapid City approved the following budgets for fiscal 2021:

General Fund: Estimated Revenues Property Taxes $8,097,000 Sales Taxes 3,027,000 Intergovernmental Grants (35% x 3,027,000) Licensing Fees and Fines (20% x 809,000) Total Estimated Revenues Appropriations Food Inspection Program $(3,027,000 800,000) Salaries Food Inspection Program (8,097,000 500,000) Supplies Other Programs (809,000 45,000) Other Program Costs $725,000 Transfer to Debt Service Fund 135,000 Total Appropriations Budgeted Change in Fund Balance

Capital Projects Fund: Estimated Revenues Intergovernmental Grants $ 780,000 Investment Income 100,000 Total Estimated Revenues $ 880,000 Appropriations Park Construction $5,400,000 Park Equipment 660,000 Transfer to Debt Service Fund 100,000 Total Appropriations 6,160,000 Budgeted Change in Fund Balance ($5,280,000)

Debt Service Fund: Estimated Revenues Special Tax Assessment $ 460,000 Investment Income 4,000 Total Estimated Revenues $ 464,000 Estimated Other Financing Sources Transfer in From General Fund 135,000 Transfer in From Capital Projects Fund 100,000 Total Estimated Other Financing Sources $ 235,000 Appropriations Interest $225,000 Principal 280,000 Total Appropriations ( 505,000) Budgeted Change in Fund Balance $ 194,000

2. The city collected 98% of the delinquent property taxes outstanding at the end of 2020 in the General Fund. The remaining delinquent amount was written off as uncollectible. All of the late payment penalties and interest (100%) were collected. Hint: Remember when writing off (eliminating) uncollectible reserves, revenue is recognized. Originally setting up uncollectible allowance amounts reduced revenue.

3. The city received an advance of 80% of the budgeted intergovernmental grant in the General Fund from the state for the food inspection program.

4. The city levied property taxes in the amount of $8,097,000 and established an allowance for uncollectible taxes and discounts equal to 5% of the taxes levied.

5. The city levied the special tax assessment to service the bond issue for the new city park. The city levied $460,000 in anticipation of realizing net cash of $437,000, establishing a $23,000 allowance for uncollectible taxes and discounts.

6. Purchase orders for supplies were placed in the amount of $(809,000 + 10,000).

7. The city entered into two construction contracts for the new city park: (a) Hillside Construction Co. for $4,825,000 and (b) Palmer Engineering for $675,000.

8. The city collected 95% of the property taxes levied in 2021. Taxpayers deducted $(1% of $8,097,000) in discounts for early payment of bills.

9. The city approved encumbrances of $685,000 for Other program costs.

10. The General Fund transferred the $135,000 to the Debt Service Fund for principle payment on the Capital Project Fund bonds.

11. The city collected $410,000 of the special assessment tax bills, after taxpayers deducted $3,200 in discounts for early payment.

12. The city paid 65% of the budgeted amount to operate the food inspection program.

13. The city received $1,000,000 federal grant for the construction of the new city park. Based on the provisions of the grant, the city recognized the amount received as revenue.

14. The Debt Service Fund paid the first installment payment plus interest on the bonds issued for the new city park.

15. The city vouchered $675,000 related to the encumbered Other Program Costs. (Journal entry #9)

16. During the year, the city collected 97% of the budgeted amount ($3,027,000) in sales taxes.

17. The city billed 80% of the budgeted amount of licensing fees and fines (through violation notices). There is no uncollectible allowance account for licensing fees and fines receivable.

18. The city received and vouchered invoices totaling 85% of the amount in journal entry #6 for payment. The amount encumbrances related to these invoices total 90% of the amount in journal entry #6 related to Supplies Other Programs.

19. The city ordered park equipment in the amount of $700,000 for the new city park.

20. The city paid the previously vouchered invoices related to the Other Program Costs. (journal entry #15)

21. Salaries of 95% of the budgeted salaries were recorded as Salaries Food Inspection Program during the year. Assume the salaries are paid at this time.

22. The park equipment ordered in journal entry #19 was received and inspected. The city vouchered the invoice amount of $680,000.

23. The city collected 94% of the amount billed for license fees and fines in cash during the year and expects to collect the rest during the first 60 days of 2020. (Refer to journal entry #17)

24. The city paid 30% of the budgeted amount for the food inspection program.

25. The city filed a claim for the balance due from the state for the food inspection program and recognized the revenue from the grant since the program expenditures were now paid. (See journal entries #3)

26. The city paid for the vouchered supplies received earlier (journal entry #18).

27. The city received and vouchered the final invoices for the construction of the city park: (a) Hillside Construction for $4,940,000 and (b) Palmer Engineering for $680,000.

28. All remaining unpaid property taxes were declared delinquent. The city comptroller concluded that an allowance for uncollectible taxes for property taxes should be 5% of the delinquent property taxes. (journal entries #4 and #8) Hint: Creating allowance for uncollectible accounts reduces revenue)

29. Interest and penalties related to the delinquent property taxes were accrued at 3%, with 1% estimated to be uncollectible. The 1% estimated to be uncollectible means 1% of the interest and penalties receivable delinquent amount, not 1% of the original receivable amount.

30. After inspection, the city paid Hillside Construction and Palmer Engineering for the previously vouchered invoices (Journal entry #27)

31. The city paid 680,000 of the vouchered park equipment.

32. The remaining project funds in the Capital Project Fund were transferred to the Debt Service Fund.

33. The Debt Service Fund paid the second installment payment plus interest on the bonds issued for the new city park.

34. The physical supplies inventory count at year-end totaled 3% of the budgeted amount for Supplies Other Programs. Encumbrances of $8,000 related to supplies ordered but not received by year end remain open. The purchase orders will be honored against 2022s appropriation.

35. When you complete all of the journal entries and post them to the T-accounts, you will find a few encumbrance accounts still have balances. You "close" these accounts into the Fund Balance as an adjusting entry, before you complete the Trial Balance sheet and before you complete the financial statements.