Problem 3-Arizona City Comprehensive Case Study

Using the information provided, complete the steps below to complete the Arizona City Comprehensive Case Study.

Arizona City General Fund Trial Balance

The trial balance of the General Fund of Arizona City on January 1, 2017, was:

	Debit	Credit
Cash	1,200,000
Investments	485,000
Taxes Receivable - Delinquent	165,000
Allowance for Uncollectible Taxes - Delinquent		22,000
Interest and Penalties Receivable	55,500
Allowance for Uncollectible Interest and Penalties		18,500
Accrued Interest Receivable	1,500
Inventory of Materials and Supplies	50,000
Accrued Salaries Payable		53,000
Vouchers Payable		110,000
Deferred Revenues		98,000
Due to Internal Services Fund		9,000
Fund Balance		1,646,500
Totals	1,957,000	1,957,000

Arizona City General Fund Budget

The General Fund budget for 2017 was adopted by the city council. The city budgets on the modified accrual basis. Transfers are not budgeted. The adopted budget is presented here:

Estimated Revenues:
Taxes	1,550,000.00
Interest and Penalties	16,500.00
Licenses and permits	124,000.00
Fines and forfeitures	48,000.00
Intergovernmental grants	298,000.00
Investment income	43,000.00
Total estimated revenues		2,079,500.00
Appropriations:
General government	262,000.00
Public safety	869,000.00
Highways and streets	288,000.00
Health and sanitation	216,000.00
Parks and recreation	340,000.00
Total appropriations		1,975,000.00
Budgeted excess revenues over appropriations		104,500.00

Arizona City General Fund Transactions - 2017

1. Record the budget. (You may use a single Estimated Revenues account and a single Appropriations account.)

2. Reestablish the encumbrances of $20,000 that were closed at the end of last year.

3. The city levied its general property taxes for the year of $1,560,000. The city estimates that $40,000 of the taxes will prove uncollectible. Record the taxes assuming the city will collect the remaining balance later during the fiscal year.

4. The city collected $1,310,000 of property taxes before the due date for taxes. The remainder of the taxes receivable became delinquent.

5. The city received and vouchered the materials and supplies that were on order from the previous year. The actual cost equaled the estimated cost of these materials and supplies, $20,000. The city records expenditures for materials and supplies when they are consumed. A perpetual inventory system is used.

6 . The city collected $215,000 when investments matured and also collected the following General Fund revenues during the year:

Fines and forfeitures	$48,400
Unrestricted grants from the state	346,200
Licenses and permits	122,400
Interest revenue from investments (including $1,500 accrued at the end of 2016)	42,000
Total	$559,000

7. The city incurred and paid salary expenditures as follows:

Accrued salaries payable, January 1	$ 52,000
General government	180,000
Public safety	580,000
Highways and streets	175,000
Health and sanitation	150,000
Parks and recreation	240,000
Total	$1,377,000

8. The city ordered General Fund materials and supplies as follows:

General government	$ 10,000
Public safety	40,000
Highways and streets	75,000
Health and sanitation	42,000
Parks and recreation	40,000
Total	$ 207,000

9. Billings were received from the Water and Sewer Enterprise Fund as follows:

General government	$ 900
Public safety	13,500
Highways and streets	3,300
Health and sanitation	2,900
Parks and recreation	1,400
Total	$ 22,000

10. Equipment was ordered for the following functions:

General government	$ 35,000
Public safety	150,000
Highways and streets	25,000
Health and sanitation	9,000
Parks and recreation	60,000
Total	$ 279,000

11. The equipment ordered was received (and vouchers approved) as follows:

	Estimated Cost	Actual Costs
General government	$ 35,000	$ 35,000
Public safety	134,000	135,000
Highways and streets	25,300	25,300
Health and sanitation	8,900	8,900
Parks and recreation	60,000	60,000
Totals	$263,200	$ 264,200

12. Billings were received from the Central Communications Network Internal Service Fund for communications services used by general government agencies and departments as follows:

General government	$ 17,000
Public safety	15,000
Highways and streets	3,500
Health and sanitation	6,600
Parks and recreation	13,900
Total	$ 56,000

13. A total of $61,000 was paid on the amounts owed to the Central Communications Network Internal Service Fund.

14. Other unencumbered expenditures incurred during the year were vouchered as follows:

General government	$ 11,500
Public safety	41,200
Total	$ 52,700

15. The General Fund loaned $500,000 to the Addiction Prevention Special Revenue Fund to provide working capital for that fund. The loan is to be repaid within a year.

16. The General Fund transferred resources to other funds as follows:

Addiction Prevention Special Revenue Fund	$ 70,000
Parks and Recreation Capital Projects Fund	200,000
Bridge Capital Projects Fund	69,000
Refunding Debt Service Fund	730,000
Total	$1,069,000

17. The General Fund received a transfer of $100,000 from the Water and Sewer Enterprise Fund.

18. Accrued salaries and wages for General Fund employees at December 31 were as follows:

General government	$ 1,700
Public safety	5,800
Highways and streets	1,700
Health and sanitation	1,500
Parks and recreation	2,300
Total	$ 13,000

Required Steps

1. Enter the beginning (January 1, 2017) trial balance of the General Fund of Arizona City in a General Fund worksheet.

The first column should be used for account titles.

Columns 2 and 3 should be the debit and credit columns, respectively, for the beginning trial balance of the General Fund.

Column 4 of the worksheet should be a reference column to tie the journal entry debits to the transaction number in this problem.

Column 7 of the worksheet should be a reference column to tie the journal entry credits to the transaction number in this problem.

Columns 8 and 9 are for the preclosing trial balance of the Arizona City General Fund.

Columns 10 and 11 are to be used to close the nonbudgetary accounts of Arizona City. These columns also will contain all balances that are to be reported in the General Fund statement of revenues, expenditures, and changes in fund balances.

Columns 12 and 13 are to be used for the post-closing trial balance (balance sheet data). All assets, deferred outflow, liability, deferred inflow, and fund balance amounts should be entered here from the trial balance columns.

The differences between the closing entry columns and the balance sheet columns should be equal to each other and to the net change in fund balances of the General Fund. This amount should be entered in the smaller of the closing entry columns and the smaller of the balance sheet columns. (If the closing entry debit column is smaller, the balance sheet credit column should be smallerand vice versa.)

2. Enter the effects of the provided transactions and events in the appropriate columns of the worksheet.