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Budgets in Government and Non-profits Accounting

The following information was drawn from a county's general fund budgets and account for a particular year (in millions).

Amended Budget Original Budget Actual Results (Budget Basis)
Revenues
Property Taxes $46.6 $42.5 $53.0
Sales Taxes 16.3 13.6 15.1
Licenses and permits 1.1 1.0 1.0
Other 3.2 2.9 3.4
Total Revenues $67.2 $60.0 $72.5

Expenditures
General government $18.2 $16.2 $18.1
Public safety 29.2 25.1 28.5
Sanitation 9.7 9.4 9.6
Cultural and recreation 8.1 7.8 8.1
Interest 1.4 1.4 1.4
Total expenditures $66.6 $59.9 $65.7
Excess of Revenues
Over expenditures $0.6 $0.1 $6.8

You also learn the following:
Beginning of Year End of Year
Encumbrances (commitments)
Outstanding $2.7 $1.1
Supplies inventories on hand 1.8 1.0
Wages and Salaries payable 0.5 0.7
Property taxes expected to be
Collected within 60 days 1.7 2.5

For purposes of budgeting, the country recognizes encumbrances as the equivalent of expenditures in the year established; for financial reporting, it recognizes expenditures when the goods or services are received, as required by GAAP.

For purposes of budgeting, it recognizes supplies expenditures when the supplies are acquired;for financial reporting, it recognizes the expenditure when the supplies are consumed.

For the purpose of budgeting, it recognizes wages and salaries when paid; for financial reporting, it recognizes the expenditures when the employees perform their services.

For the purpose of budgeting, its recognizes as revenues only taxes actually collected during the year; for financial reporting, it recognizes taxes expected to be collected within the first sixty days of the following year.

1. Prepare the following four separate schedules in which you compare the budget-to actual results and compute the budget variance. You need to present only the total revenues, total expenditures, and excess of revenues over expenditures.

a. Actual results on a budget basis to the amended budget.
b. Actual results on a budget basis to the original budget.
c. Actual results as would be reflected in financial statements to the amended budget restated so that it is on a financial reporting basis
d. Actual results as would be reflected in the financial statements to the original budget restated so that it is on a financial reporting basis.

I am attaching the budget to be worked.

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Solution Preview

** Please see the attached file for the complete solution response **

a. Amended budget to actual results on a budget basis
Actual
Results Variance
Amended (Budget Favorable
Budget Basis) (unfavorable)
Total revenues $67.2 $72.5 $ 5.3
Total expenditures _66.6 _65.7_ ...

Solution Summary

This solution provides a detailed a computation of the given accounting problem.

$2.19