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Entries Balance Sheet, Statement of Revenues, Expenditures, and Changes in Fund Balance

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Please help me understand this problem. This is my second time posting this. Thanks in advance for your time!

The trial balance for the General Fund of the City of Monte Vista as of December 31, 2012, is presented here:

(see attached workbook for values)

Transactions of the General Fund for the year ended December 31, 2013, are summarized as follows:

1. The City Council adopted the following budget for 2013:
Estimated revenue $1,600,000
Transfer from trust fund 50,000
Appropriations 1,530,000
Transfer to debt service fund 80,000

2. Property taxes of $1,500,000 were levied, of which it is estimated that $30,000 will not be collected.

3. Purchase orders in the amount of $1,400,000 were placed with suppliers and other vendors.

4. Property taxes in the amount of $1,450,000 were collected.

5. Cash was received from the Trust Fund in the amount of $50,000.

6. Invoices in the amount of $1,380,000 were approved for payment. The amount originally encumbered for these invoices was $1,360,000. The invoices included $25,000 net of trade-in allowance for the purchase of a new minicomputer and $400,000 for supplies. The City received a trade-in-allowance of $4,000 on its old minicomputer, which had been purchased three years earlier for $16,000. At the time the old minicomputer was purchased, it was estimated that it would have a useful life of four years. The new minicomputer is expected to last at least six years. The City of Monte Vista uses the purchase method to account for supplies inventory.

7. Licenses and fees in the amount of $48,000 were collected.

8. Vouchers in the amount of $1,300,000 were paid.

9. Cash in the amount of $80,000 was transferred to the Debt Service Fund.

10. Supplies on hand at the end of the year amount to $100,000.

Required:
A. Prepare entries in general journal form to record the transactions of the General Fund for the year ended December 31, 2013.

B. Prepare a preclosing trial balance for the General Fund as of December 31, 2013.

C. Prepare the necessary closing entries for the General Fund for the year ended December 31, 2013.

D. Prepare a balance sheet and a statement of revenues, expenditures, and changes in fund balance for the General Fund for the year ended December 31, 2013.

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Solution Summary

The expert examines entries balance sheets, statements of revenues and expenditures.

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See Also This Related BrainMass Solution

Accounting for an activity in an internal service fund

The differences in accounting for an activity in an internal service fund rather than the general fund may be striking.
A school district establishes a vehicle repair shop that provides service to other departments, all of which are accounted for in its general fund. During its first year of operations, the shop engages in the following transactions:
• It purchases equipment at a cost of $24 million and issues long-term notes for the purchase price. The useful life of the equipment is eight years, with no residual value.
• It purchases supplies at a cost of $4 million. Of these, it uses $3 million. In its governmental funds, the district accounts for supplies using the purchases method.
• It incurs $13 million in other operating costs.
• It bills other departments for $19 million.
For purposes of external reporting, school district officials are considering two options:
• Account for the vehicle repair shop in an internal service fund.
• Account for the vehicle repair shop in the general fund
1. For each of the following items, indicate the amounts that are reported in the year-end financial statements of (1) the internal service fund, assuming that the school district selects the first option, and (2) the general fund, assuming that it selects the second option.
1. Billings to other departments (revenues)
2. Cost of supplies (expense or expenditure)
3. Expenses or expenditures relating to acquisition or use of equipment
4. Other operating costs
5. Equipment (asset)
6. Accumulated depreciation
7. Inventory (asset)
8. Notes payable
9. Reserve for inventory
2. What are the total expenses reported in the internal service fund, assuming that the school district selects the first option?
3. What is the total amount of expenditures reported in the general fund, assuming that the school district: (1) selects the first option; (2) selects the second option?
4. What are the reported revenue and expenses relating to the vehicle repair shop in the district's government-wide statements? Does it matter whether the district accounts for the shop in an internal service fund or in the general fund?

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