How would the transfer from the permanent fund to the special revenue fund be reported in the government-wide statements?
Field: Business Finance – Accounting
Option #1: Government and Not-For-Profit Accounting Portfolio #1
Your portfolio project will provide specific answers to questions that follow. Apply what you have learned in this course to your answers to these questions in a microsoft word document.
P. 2-6: The nature of a transaction gives a clue as to the type of fund in which it should be recorded. (80 points)
Kendal County engaged in the following transactions:
It levied and collected $1million in taxes dedicated to the repayment of outstanding general obligation bonds.
It billed sponsors of a charity bicycle ride $5,000 for providing police patrols during the ride.
It recognized $60,000 of cash dividends on investments dedicated to the support of a county arts center.
It recognized $70,000 of cash dividends on investments dedicated to scholarships for needy county residents.
It incurred $6 million in construction costs to complete a new county jail. The new jail was funded entirely with the proceeds of long-term bonds.
It transferred $400,000 of unrestricted funds to an appropriate fund to be invested and eventually used to repay the principal on the long-term jail bonds (entries in two funds required).
It recognized depreciation of $100,000 on equipment in a vehicle repair center that services all county departments that have motor vehicles.
It collected $30,000 in parking fees at the county-owned garage.
It issued $8 million in bonds to improve the city-owned electric utility.
It distributed $3 million in taxes collected on behalf of school districts located within the country.
Prepare appropriate journal entries.
Indicate the type of funds in which these transactions would most likely be recorded.
P. 5-4: Generally accepted modified accrual accounting practices pertaining to inventories may not fulfill the objectives of financial reporting. (80 points)
The following is an excerpt from a note to the financial statements of the city of Dallas (dates changed):
The city prepares its annual appropriated general fund, debt service fund, and proprietary operating funds budgets on a basis (budget basis) which differs from generally accepted accounting principles (GAAP basis). The major differences between the budget and GAAP bases are that encumbrances are recorded as the equivalent of expenditures (budget) rather than a commitment of fund balance (GAAP) in the governmental funds.
The city accounts for inventories on the purchases basis. One of the city’s departments, which is accounted for in the general fund, budgeted $195,000 in supplies expenditures for fiscal 2015. It began the 2015 fiscal year with $30,000 of supplies on hand. It also had $12,000 of supplies on order. During the year it ordered an additional $180,000 of supplies, received (and paid for in cash) $185,000 of supplies, and consumed $178,000 of supplies.
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