Acct 562 Assignment 2

Topics: Income tax, Tax, Taxation Pages: 8 (2172 words) Published: April 20, 2013
Chapter 4: Problems 4–4, 4–6, 4–10, and 4–11

3–9. Recording General Fund Operating Budget and Operating Transactions. The Town of Bedford Falls approved a General Fund operating budget for the fiscal year ending June 30, 2011. The budget provides for estimated revenues of $2,700,000 as follows: property taxes, $1,900,000; licenses and permits, $350,000; fines and forfeits, $250,000; and intergovernmental (state grants), $200,000. The budget approved appropriations of $2,650,000 as follows: General Government, $500,000; Public Safety, $1,600,000; Public Works, $350,000; Parks and Recreation, $150,000; and Miscellaneous, $50,000.

General Fund operating budget: fiscal year ending June 30, 2011 Budget: revenues of $2,700,000
property taxes: $1,900,000
licenses and permits: $350,000
fines and forfeits: $250,000
intergovernmental (state grants):$200,000

The budget approved appropriations of $2,650,000 as follows: General Government:$500,000
Public Safety: $1,600,000
Public Works: $350,000
Parks and Recreation: $150,000

Required :
a. Prepare the journal entry (or entries), including subsidiary ledger entries, to record the Town of Bedford Falls’s General Fund operating budget on July 1, 2010, the beginning of the Town’s 2011 fiscal year. Answer:

General LedgerSubsidiary ledger
Estimated RevDR: $2,700,000
Budgetary fund Bal.CR: $2,700,000
TaxesDR: $1,900,000
Intergovernmental Rev.DR: $200,000
Licenses & PermitsDR: $350,000

b. Prepare journal entries to record the following transactions that occurred during the month of July 2010.

1.Revenues were collected in cash amounting to $31,000 for licenses and permits and $12,000 for fines and forfeits. Answer:
licenses and permits (Subsidiary Ledger)
DR: Licenses & Permits $31,000
CR: Cash $31,000

fines and forfeits (general ledger)
DR: Estimated Rev $12,000
CR: Budgetary fund bal. $12,000

2. Supplies were ordered by the following functions in early July 2010 at the estimated costs shown: Answer:

Appropriations LedgerSubsidiary ledger
General GovernmentCR: $7,400
Public SafetyCR: $11,300
Public WorksCR: $6,100
Parks & RecreationCR: $4,200
Misc.CR: $900
Encumbrances subsidiary LedgerSubsidiary ledger
General GovernmentDR: $7,400
Public SafetyDR: $11,300
Public WorksDR: $6,100
Parks & RecreationDR: $4,200
Misc.DR: $900

3. During July 2010, supplies were received at the actual costs shown below and were paid in cash. General Government, Parks and Recreation, and Miscellaneous received all supplies ordered. Public Safety and Public Works received part of the supplies ordered earlier in the month at estimated costs of $10,700 and $5,900, respectively.

c. Calculate and show in good form the amount of budgeted but unrealized revenues in total and from each source as of July 31, 2010. Answer:
Budgeted but unrealized revenues:
General Govn - $100
Public Safety – ($100)
Public Works – ($200)
Park & Rec - $100
Misc. - $0

d. Calculate and show in good form the amount of available appropriation in total and for each function as of July 31, 2010. Answer:
Available appropriation:
General Govn. - $100
Public Safety - $0
Public Works - $0
Park & Rec - $100
Misc. - $0

4–4 Property Tax Calculations and Journal Entries. The Village of Darby’s budget calls for property tax revenues for the fiscal year ending December 31, 2011, of $2,660,000. Village records indicate that, on average, 2 percent of taxes levied are not collected. The county tax assessor has assessed the value of taxable property located in the village at $135,714,300. Required:

a. Calculate to the nearest penny what tax rate per $100 of assessed valuation is required to generate a tax levy that will produce the required amount of revenue for the year. Answer:
2,700,000%.096= $2,812,500

b. Record the tax levy for 2011 in the General Fund....
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