Conversion worksheetGreen shaded cells are from Chapter 5 financia.docx

Conversion worksheetGreen shaded cells are from Chapter 5
financial StatementsEnter all amounts as positive numbers. The
worksheet is formatted to add debits to assets & expenses and
add credits to revenues, liabilities & equityRefr. Account
TitlesDebitsCreditsGov'tal Fund Balances Adjustments &
EliminationsGovern-mental Funds AdjustedInternal Service
FundsBalances for Gov't-wide
StmtsDebitsCreditsDebitsCreditsACapital
asset64,200,000DEBITS:Accumulated
Depreciation28,700,000Cash657,720657,72035,000692,720Net
Position35,500,000Cash with Fiscal
Agent928,000928,000928,000Investments259,000259,000259,00
0BCapital asset5,823,100Taxes Receivable,
net262,000262,000262,000Capital Outlay
Expenditures5,823,100Interest Receivable,
net16,85016,85016,850Inventories-37,54037,540CDepreciation
Expense4,900,000Due from State
Govt.559,000559,000559,000Accumulated
Depreciation4,900,000Due from Other Funds-
11,200(3,200)14,400Capital
Assets64,200,00070,023,10078,40070,101,500DProceeds of
bonds4,000,000 both rows5,823,100Other Financing
sources- premium on bonds200,000--Bonds
payable4,000,000Expenditures (expenses) Current-Premium on
bonds200,000 General
Govt.1,646,9001,646,900(1,240)1,648,140 Public
Safety3,026,9003,026,9003,026,900ENet position12,000,000
Highway and Streets2,481,9002,481,9002,481,900Bonds
payable12,000,000 Sanitation591,400591,400591,400
Health724,100724,100724,100FBonds payable800,000
Welfare374,300374,300374,300Bonds Principal800,000 Culture
and Recreation917,300917,300917,300Compensated Absences
Exp42,00042,00042,000GInterest Expense328,000Other
Expenditures (expenses)--Accrued Interest Payable328,000 -

Debt Service Principal800,000(800,000)1,600,0001,600,000 -
Interest
(expenditure/expense)514,000328,000(180,000)1,032,0001,032,
000HNet position180,000 both rows(10,000)Interest
Expense180,000 - Capital
Outlay5,823,100(5,823,100)11,646,20011,646,200 -
Depreciation4,900,0004,900,0004,900,000IBonds
Payable10,000Other Fin. Uses - Transfers
Out1,871,7001,871,700(1,871,700)3,743,400Interest
Expense10,000-Total Debits21,454,170105,598,650JDeferred
Revenues10,500CREDITS:Revenues- Property
Taxes10,500Accounts
Payable326,800326,800(19,400)307,400Due to Other
Funds40,20040,2003,20037,000KRevenues- Property
Taxes21,000Accrued Interest
Payable(328,000)(328,000)(328,000)Net Position21,000Bonds
Payalbe(12,000,000) both
rows800,000(4,000,000)(16,800,000)(16,800,000)LCompensate
d Absenese Expense42,000Premium on
Bonds10,000(200,000)(210,000)(210,000)Compensated
Absences Payable42,000Compensated Absence
Payable(42,000)(42,000)(42,000)Advance from Water Utility
Fund-(15,000)(15,000)MCash35,000Deferred Inflows: Property
Taxes10,50010,500-(15,000)Due from Other
Funds11,200Accumulated
Depreciation(28,700,000)Inventories37,540 both
rows(4,900,000)(33,600,000)(33,600,000)Capital
assets78,400Revenues-Accounts Payable19,400Property
Taxes6,657,50021,000(10,500)6,626,0006,626,000Advance
from Water Utility Fund15,000Sales
Taxes2,942,0002,942,0002,942,000Net
Assets127,740Interest21,22021,22021,220Licenses &
Permits800,000800,000800,000NDue to Other
Funds3,200Miscellaneous350,000350,000350,000Due from
OtherFunds3,200State Grant for Highway Street
Expenses1,065,0001,065,0001,065,000Capital Grant- Gen

Gov't332,000332,000332,000ONet Assets1,240Capital Grant-
Public Safety1,340,0001,340,0001,340,000Expenditures-
Current- General Government1,240----PTransfer
In1,871,700Other Financing Sources--Transfer
Out1,871,700Proceeds of Bonds4,000,0004,000,000--Premium
on Bonds200,000200,000--Transfers
In1,871,7001,871,7001,871,700-Net Position at beginning of
year-1,240 three
rows180,000(21,000)1,497,25012,000,000(35,500,000)(46,203,7
50)(127,740)(46,332,730)Total
Credits21,454,170(37,189,380)column totals: debits = credits
??-92,514,600(92,514,600)2,038,280(2,038,280)142,788,030
CITY OF MONROE
WORKSHEET TO CONVERT GOVERNMENTAL ACTIVITIES
TO ACCRUAL BASIS
Stmt of ActivitiesProgram RevenuesNet (Expense) Revenue and
Change in Net PositionExpensesCharges for
ServicesOperational Grants and ContributionsCapital Grants
and ContributionsGovernmental ActivitiesBusiness-Type
ActivitiesTotalFunctions/ProgramsGovernmental Activities:
General Government$ 1,645,660$ 332,000$ (1,313,660)$
(1,313,660) Public
Safety3,026,9001,340,000(1,686,900)(1,686,900) Highways
and Streets2,481,9001,065,000(1,416,900)(1,416,900)
Sanitation591,400(591,400)(591,400)
Health724,100(724,100)(724,100)
Welfare374,300(374,300)(374,300) Culture and
Recreation917,300(917,300)(917,300)
Depreciaiton4,900,000(4,900,000)(4,900,000)
Interest652,000(652,000)(652,000) Compensated
Absneces42,000(42,000)(42,000) Total Governmental
Activities15,355,560-
1,397,0001,340,000(12,618,560)(12,618,560)Business Type
Activities Water and Sewer1,055,0001,049,50018,00018,000
Total Government$ 16,410,560$ 1,049,500$ 1,397,000$

1,340,000$ (12,618,560)$ 18,000(12,600,560)General
RevenuesTaxes: Property Taxes6,647,0006,647,000 Sales
Taxes2,942,0002,942,000Interest21,22021,220licenses and
Permits800,000800,000Miscellaneous350,000350,000 Total
General Revenues10,760,220-10,760,220Change in Net
Position(1,858,340)18,000(1,840,340)Net Position,
Beginning24,837,01025,796,010Net Position, Ending$
22,978,670$ 18,000$ 23,955,670
&14CITY OF MONROE
Statement of Activities
&11For the year ended December 31, 2017
Stmt of Net PositionGovernmental ActivitiesBusiness-Type
ActivitiesTotalAssetsCash$ 692,720$ 102,400$
795,120Cash with Fiscal
Agents928,000928,000Investments259,000259,000Accounts
Receivable (Net)16,50016,500Taxes Receivable
(Net)262,000262,000Interest Receivable16,85016,850Internal
Balances Current-Net the amounts: due from and (due to) other
fundsDue from Other
Governments567,000567,000Inventories37,54094,500132,040In
ternal Balances Long-Term(15,000)15,000-Restricted
Assets142,000142,000Capital Assets, Net of Accumulated
Depreciation36,501,5003,037,30039,538,800 Total
Assets$ 39,249,610$ 3,407,700$
42,657,310LiabilitiesAccounts
Payable346,20056,000402,200Payroll Taxes
Payable3,3003,300Accrued Interest
Payable328,000328,000Revenue Bonds
Payable2,500,0002,500,000General Obligation Bonds
Payable15,200,00015,200,000Premium on Bonds
Sold190,000190,000Compensated Absences
Payable42,00042,000 Total
Liabilities16,106,2002,559,30018,665,500Net PositionNet
Investment in Capital
Assets51,876,500537,30052,413,800Restricted204,500142,0003

46,500Unrestricted298,100298,100 Total Net
Position$ 52,081,000$ 977,400$ 53,058,400
&14CITY OF MONROE
Statement of Net Position
&11As of December 31, 2017
ReconciliationsCITY OF MONROEReconciliation of the
Balance Sheet of Governmental Funds to the Statement of Net
PositionAs of December 31, 2017Fund balances reported in
governmental funds Balance Sheet$ 1,497,250Amounts
reported for governmental activities in the Statement of Net
Position are different because:Capital assets used in
governmental activities are not financial resources and therefore
not reported in the funds. Amount does not include capital
assets of internal service funds (reported in following
row).36,423,100 The assets and liabilities of internal service
funds are included in governmental funds in the Statement of
Net Position.127,740Deferred revenue for property taxes
reported in the funds but accrued as revenue in the government-
wide statements and added to Net Position.10,500Accrued
interest payable is reported as a liability in the Statement of
Activities; interest is not accrued in the governmental
funds.(328,000)Bonds payable, not due and payable in the
current period are not reported in the
funds.(15,410,000)Compensated absences, not due and payable
in the current period are not reported in the funds.(42,000)Net
Position of Governmental Activities$ 22,278,590CITY OF
MONROEReconciliation of the Statement of Revenues,
Expenditures and Changes in Fund Balance to the Statement
of ActivitiesFor the year ended December 31, 2017Net change
in fund balances - Governmental funds$ 844,420Amounts
reported for governmental activities in the Statement of
Activities are different because:Governmental funds report
capital outlays as expenditures rather than
assets5,823,100Governmental funds do not report depreciation
expense(4,900,000)The net revenue of internal service funds is

not reported with the governmental funds(1,240)Property taxes
due more than 60 days after year end is not accrued in the
governmental funds.(10,500)Bond proceeds are reported as
other financing sources in the governmental funds but as
liabilities in the government-wide
statements.(4,200,000)Repayment of bonds is reported as an
expenditure in the governmental funds800,000Interest is not
accrued at year end in the governmental
funds.(138,000)Increases in compensated absences, not due and
payable in the current period are not reported in the
funds.42,000Change in Net Position of Governmental Activities
$ (1,740,220)
City of Monroe
Reconciliation of fund basis to government-wide statements
Community FoundationCOMMUNITY FOUNDATION TRUST
FUND ACCRUEDreference Account
TitlesDebitsCredits CASHINTEREST
RECEIVABLEbb50,500bb7,5007-C-
11Cash22,50022,5007,000Additions- Investment Earnings-
Interest15,000205,5007,500Accrued Interest
Receivable7,00022,500200,0002,000204,0002aCash205,500204,
00048,000Additions-
Contributions205,50055,0008,0002bInvestment in RST
stock200,000Cash200,000 INVESTMENT IN
INVESTMENT IN INVESTMENT IN3Cash22,500
CORPORATE BONDS RST STOCK UVW
STOCKAdditions- Investment Earnings-
Dividends22,500bb750,000bbbb2,100200,000204,0004Cash2,00
0200,0001,000Additions- Investment Earnings-
dividends2,0005Cash204,000752,100-203,000Investment in
RST Stock200,000Additions- Net Increase in Investment4,000
NET POSITION ADDITIONSADDITIONS -
INVESTMENT5bInvestments in UVW Common Stock204,000

(beginning) CONTRIBUTIONSEARNINGS -
INTERESTCash204,000808,000bb205,50015,00022,5006Deduct
ions- Scholarship
Awards48,0007,500Cash48,000808,000205,50045,0007Accured
Interest Receivable7,500Additions- Investment Earnings-
Interest7,500ADDITIONS - INVESTMENTADDITIONS -
INVESTMENT DEDUCTIONS8Investment in MNO
Company Bonds2,100EARNINGS - DIVIDENDSEARNINGS -
∆ FMVDISTRIBUTIONS TO NFPsInvestment in UVW
Company Stock1,0002,0004,00048,000Additions- Net increase
in
investments1,1001,1002,0005,10048,000drcr1,066,1001,065,600
ending balance
&16City of Monroe
Community Foundation Trust Fund &16
Pension TrustPOLICE DEPARTMENT PENSION TRUST
FUND ACCRUED INVESTMENT INreference
Account TitlesDebitsCredits CASHINTEREST
RECEIVABLE CORP.
BONDSbb137,000bb75,000bb5,300,0007-C-
11Cash800,000800,00086,0007,750Additions- Contributions-
Plan Members400,000212,000Additions- Contributions-
Employers400,000125,000650,0002Cash212,000460,7005,307,7
50Accrued Interest Receivable86,000506,800500,000Additions-
Investment Earnings-
Interest126,000170,100(11,000)3Cash125,000Additions-
Investment Earnings- Dividends125,000 INVESTMENT IN
NET POSITION CORP. STOCKACCOUNTS PAYABLE
(beginning) 4investments in Common
Stock650,000bb2,790,00027,000bb8,275,000bbCash650,000650,
000447,220505,000460,7005Deductions- Annuity
Benefits325,400500,000Deductions- Disability
Benefits82,0203,2508,275,000Deductions- Refunds to

Terminated Employees39,8003,431,75013,520Accounts Payable
and Accrued Expenses447,2206Accounts Payable and Accrued
Expenses460,700ADDITIONS - MEMBERADDITIONS -
EMPLOYERADDITIONS - INVESTMENTCash460,700
CONTRIBUTIONS CONTRIBUTIONSEARNINGS -
INTEREST400,000400,000126,0007aCash506,800Investments
in Common Stock505,000Additions- Investment Earnings- net
Increase1,800400,000400,000126,0007bInvestments in Common
Stock500,000Cash500,000ADDITIONS -
INVESTMENTADDITIONS - INVESTMENT
DEDUCTIONS8investments in Bonds7,750EARNINGS -
DIVIDENDSEARNINGS - ∆ FMVANNUITY
BENEFITSInvestments in Common
Stock3,250125,0001,800325,400Additions- Investment
Earnings- Net Increase in FVI4,5004,500125,0006,300325,400
DEDUCTIONSDEDUCTIONS - REFUNDS TODISABILITY
BENEFITSTERMINATED
EMPLOYEES82,02039,80082,02039,800drcr9,345,8209,345,82
0ending balance-
&"Arial,Bold"&14City of Monroe - Police Dept. Pension Trust
Fund
Closing EntriesCommunity Foundation Private Purpose Trust
FundAccount TitleDebitsCreditsNET POSITIONAdditions-
Invesment Earnings- Interest45,000Additions- Investment
Earnings- Dividends2,000808,000PreclosingAdditions-
Contributions205,500209,600closing entryAdditions- Net
Increase in Investments5,100 Dedutions- Scholarship
Awards48,0001,017,600 Net Assets held in trust for
Scholarship Benefits209,600Police Department Pension Trust
FundAccount TitleDebitsCreditsNET POSITIONAdditions-
Contributions- Plan members400,000Additions- Contributions-
Employer400,0008,275,000PreclosingAdditions- Investment
Earnings- Inverest126,000610,080closing entryAdditions-
Investment Earnings- Dividends125,000Additions- Investment
Earnings- Net Increase6,3008,885,080 Deductions- Annuity

Benefits325,400 Deductions- Disability
Benefits82,020Deductions- Refunds to Terminated
Employees39,800Net Assets Held in Trust for Pensions
Benefits610,080
&14City of Monroe &14
FIDUCIARY FUNDS- Closing Entries
stmt Changes Fiduciary Net PtnPolice Pension Trust
FundPrivate Purpose Trust FundAdditionsContributions: Plan
Members$ 400,000 Employer400,000 Individuals
Total Contributions-800,000 Investment Income
Interest45,000126,000 Dividends2,000125,000 Net Increase
in Fair Value of Investments5,1006,300 Total
Investment Income52,100257,300 Total
Additions52,1001,057,300DeductionsAnnuity
Benefits325,400Disability Benefits82,020Refunds to
Terminated Employees39,800Distribution of Scholarships48,000
Total Deductions447,22048,000Change in Net
Position(395,120)1,009,300Net Position, January 1Net Position,
December 31$ (395,120)$ 1,009,300
&"Times New Roman,Regular"&14City of Monroe
Statement of Changes in Fiduciary Net Position
Fiduciary-type Funds
For the year ended December 31, 2017
Stmt of fiduciary net positionPolice Pensions Trust FundPrivate
Purpose Trust FundAssetsCash$ 170,100$ 55,000Accrued
Interest Receivable(11,000)75,000Investments at Fair Value:
Bonds5,307,750752,100 Common Stocks3,431,750203,000
Total Investments8,739,500955,100 Total
Assets8,898,6001,085,100LiabilitiesAccounts Payable13,520
Total Liabilities13,520-Net PositionResources Held in Trust for
Pension Benefits and Other Purposes$ 8,275,000$ 808,000
&"Times New Roman,Regular"&14City of Monroe
Statement of Net Position

Fiduciary-type Funds
As of December 31, 2017
Continuous Problem – City of Monroe
Continuous Problem – City of Monroe
to Accompany
Essentials of Accounting for Governmental
and Not-for-Profit Organizations:
Thirteenth Edition
Chapters 2 through 8 describe accounting and financial
reporting by state and local governments. A continuous problem
is presented to provide an overview of the reporting process,
including preparation of fund basis and government-wide
statements. The problem assumes the government is using fund
accounting for its internal record-keeping and then at year-end
makes necessary adjustments to prepare the government-wide
statements. The problem that follows is presented in the same
order as the textbook (beginning with Chapters 3, and 4).
Each chapter requires the preparation of journal entries to
record the events and transactions of governmental, proprietary,
or fiduciary funds. For the General Fund, use control accounts
for the budgetary accounts, revenues, expenditures and
encumbrances. For all other funds, use separate accounts for
each type of revenue and expenditure/expense. At appropriate
stages, preparation of the fund and government-wide statements
are required. The following funds are included in this series of
problems:
Governmental Funds
· General
· Special revenue—Street and Highway Fund
· Capital projects—City Hall Annex Construction Fund

· Debt service—City Jail Annex Debt Service Fund
· Debt service—City Hall Debt Service Fund
Proprietary Funds
· Internal service—Stores and Services Fund
· Enterprise—Water and Sewer Fund
Fiduciary Funds
· Private-purpose—Student Scholarship Fund
· Pension trust—Fire and Police Retirement Fund
Chapters 3 & 4
The Balance Sheets of the General Fund and the Street and
Highway Fund of the City of Monroe as of December 31, 2016,
follow. These (beginning) balances have been entered in the
proper general ledger accounts, as of 1/1/2017.
CITY OF MONROE
General Fund Balance Sheet
Assets
Cash
$497,000
Taxes receivable
$210,000
Less: Estimated uncollectible taxes
(37,000)
net
173,000

Interest and penalties receivable on taxes
5,200
Less: Estimated uncollectible interest and penalties
(950)
net
4,250
Due from state government
210,000
Total assets
$884,250
Liabilities, Deferred Inflows, and Fund Equity
Liabilities:
Accounts payable
$ 99,000
Due to other funds
27,000
Total liabilities
126,000
Deferred inflows – Property taxes
21,000
Fund equity:
Fund balance—assigned

(for outstanding encumbrances)
$17,000
Fund balance—unassigned
720,250
Total fund balance
737,250
Total liabilities, deferred inflows and fund equity
$884,250
CITY OF MONROE
Street and Highway Fund Balance Sheet
Assets
Cash
$23,000
Investments
59,000
Due from state government
107,000
Total assets
$189,000
Liabilities and Fund Equity
Liabilities:

Accounts payable
$9,000
Fund equity:
Fund balance—assigned for streets and
highways
180,000
Total liabilities and fund equity
$189,000
3–C. This portion of the continuous problem continues the
General Fund and special revenue fund examples by requiring
the recording and posting of the budgetary entries. To reduce
clerical effort required for the solution use control accounts for
the budgetary accounts, revenues, expenditures and
encumbrances. Subsidiary accounts are not required. Budget
information for the City includes:
a) As of January 1, 2017, the City Council approved and the
mayor signed a budget calling for $11,150,000 in property tax
and other revenue, $9,350,000 in appropriations for
expenditures, and $1,700,000 to be transferred to two debt
service funds for the payment of principal and interest. Record
the budget for the General Fund and post to the ledger.
b) Also as of January 1, 2017, the City Council approved and
the mayor signed a budget for the Street and Highway Fund that
provided for estimated revenues from the state government in
the amount of $1,068,000 and appropriations of $1,047,000.
Record the budget and post to the ledger.
4–C. Part 1. General Fund Transactions

Required:
a. Record journal entries for the following transactions for FY
2017. Make any computations to the nearest dollar. Journal
entry explanations are not required. Use control accounts for
revenues, expenditures and budgetary accounts. It is not
necessary to reflect subsidiary ledger entries.
(1) Encumbrances of $ 17,000 for purchase orders outstanding
at the end of 2016 were re-established.
(2) The January 1, 2017, balance in Deferred Inflows – Property
Taxes relates to the amount of the 2016 levy that was expected
to be collected more than 60 days after December 31. This
amount should be recognized as 2017 revenues.
(3) A general tax levy in the amount of $6,800,000 was made. It
is estimated that 2¼ percent (.0225) of the tax will be
uncollectible.
(4) Tax anticipation notes in the amount of $500,000 were
issued.
(5) Goods and supplies related to all encumbrances outstanding
as of December 31, 2016 were received, along with invoices
amounting to $16,600; the invoices were approved for payment.
The City maintains immaterial amounts in supply inventories
and it is the practice of the City to charge supplies to
expenditure when received.
(6) All accounts payable and the amount due other funds were
paid.
(7) The General Fund collected the following ($ 10,811,500) in
cash:
· prior year taxes, $158,000;
· interest and penalties receivable on prior year taxes, $3,500;
· current taxes, $6,400,000;
· $210,000 previously recorded as due from the state
government;
· licenses and permits, $800,000;
· sales taxes, $2,890,000; and
· miscellaneous revenues, $350,000.

(8) Purchase orders and contracts were issued in the amount of
$3,465,000.
(9) Payrolls for the General Fund totaled $5,070,000. Of that
amount, $498,000 were withheld for employees’ federal income
taxes and $357,000 were withheld for employees’ FICA and
Medicare tax liability; the balance was paid in cash. The
encumbrance system is not used for payrolls.
(10) The liability for the city’s share of FICA and Medicare
taxes, $357,000, was recorded as was the liability for state
unemployment taxes in the amount of $28,000.
(11) Invoices for most of the supplies and services ordered in
transaction 8 were received in the amount of $3,375,300 and
approved for payment. The related encumbrance amounted to
$3,407,000.
(12) Tax anticipation notes were paid at maturity, along with
interest in the amount of $18,000.
(13) Notification was received that an unrestricted state grant in
the amount of $332,000 would be received during the first
month of the next year.
(14) The General Fund recorded a liability to the Water and
Sewer Fund for services in the amount of $37,000 and to the
Stores and Services Fund for supplies in the amount of
$313,200; $310,000 of the amount due the Stores and Services
Fund was paid.
(15) The General Fund recorded an amount due of $52,000 from
the state government, representing sales taxes to be collected
from retail sales taking place during the last week of the year.
(16) The General Fund paid accounts payable in the amount of
$3,175,000 and paid the amounts due the federal and state
governments. The General Fund also transferred to the debt
service funds cash in the amount of $1,662,000 for the recurring
payment of principal and interest.
(17) All required legal steps were accomplished to increase
appropriations by the net amount of $109,000. Estimated
revenues were increased by $73,000.

(18) The City Council authorized a write-off of $51,000 in
delinquent property taxes and corresponding interest and
penalties amounting to $1,600.
(19) Interest and penalties receivable on taxes were accrued in
the amount of $17,200; $1,100 of this amount is expected to be
uncollectible.
(20) It is estimated that $10,500 of the outstanding taxes
receivable will be collected more than 60 days beyond the fiscal
year-end.
b. Post the entries to the general ledger.
c. Prepare and post the closing entries for the General Fund.
Outstanding encumbrances at year end are classified as
Assigned Fund Balance and all remaining net resources are
classified as Unassigned Fund Balance.
d. Prepare a Statement of Revenues, Expenditures, and Changes
in Fund Balance for the year ended December 31, 2017.
Confirm that the revenue and expenditure control accounts
agree with the following detail and use this information in the
Statement:
Revenues
Expenditures
Property Taxes . . . . . .
$6,657,500
General Government . . .
$1,646,900
Sales Taxes
2,942,000
Public Safety . . . . . . . . .

3,026,900
Interest and Penalties on Taxes . . . . . . . . . . .
16,100
Highways and Streets . .
1,441,400
Licenses and Permits .
800,000
Sanitation . . . . . . . . . . . .
591,400
Intergovernmental Revenue . . . . . . . . . . .
332,000
Health . . . . . . . . . . . . . .
724,100
Miscellaneous Revenue
350,000
Welfare . . . . . . . . . . . . .
374,300
Total . . . . . . . . . . . .
$11,097,600
Culture and Recreation .
917,300
Capital Outlay . . . . . . . .
492,800
Total . . . . . . . . . . . . .
$9,215,100

e. Prepare in good form a Balance Sheet for the General Fund as
of the end of fiscal year, December 31, 2017.
4–C. Part 2. Special Revenue Fund Transactions
Required:
a. Record journal entries for the following transactions for FY
2017 and post to the general ledger. As there are relatively few
revenues and expenditures, the use of control accounts is not
necessary. (Make entries directly to individual revenue and
expenditure accounts).
(1) The state government notified the City that $1,065,000 will
be available for street and highway maintenance during 2017
(i.e. the City has met eligibility requirements). The funds are
not considered reimbursement-type as defined by GASB
standards.
(2) Cash in the total amount of $997,000 was received from the
state government.
(3) Contracts, all eligible for payment from the Street and
Highway Fund, were signed in the amount of $1,062,000.
(4) Contractual services (see transaction 3) were received; the
related contracts amounted to $1,042,000. Invoices amounting
to $1,040,500 for these items were approved for payment. The
goods and services all were for street and highway maintenance.
(5) Investment revenue of $5,120 was earned and received.
(6) Accounts payable were paid in the amount of $923,000.
(7) All required legal steps were accomplished to increase
appropriations in the amount of $4,500.
b. Prepare and post the necessary closing entries for the Street
and Highway Fund.
c. Prepare a Statement of Revenues, Expenditures, and Changes
in Fund Balances for the Street and Highway Fund for the fiscal
year ended December 31, 2017.

d. Prepare a Balance Sheet for the Street and Highway Fund as
of December 31, 2017. Assume any unexpended net resources
are classified as Restricted Fund Balance.
Chapter 5
5–C. Part 1. Capital Projects Fund Transactions
The voters of the City of Monroe approved the issuance of tax-
supported bonds in the face amount of $4,000,000 for the
construction and equipping of a new City Jail. Architects were
to be retained, and construction was to be completed by outside
contractors. In addition to the bond proceeds, a $1,340,000
grant was expected from the state government.
Required:
a. Open a general journal for the City Jail Annex Construction
Fund. Record the following transactions and post to the general
ledger. Control accounts are not necessary.
(1) On January 1, 2017, the total face amount of bonds bearing
an interest rate of 8 percent was sold at a $200,000 premium.
Principal amounts of $200,000 each will come due annually
over a 20-year period commencing January 1, 2018. Interest
payment dates are July 1 and January 1. The first interest
payment will be July 1, 2017. The premium was transferred to
the City Jail Debt Service Fund for the future payment of
principal on the bonds.
(2) The receivable from the state government was recorded.
(3) Legal and engineering fees early in the project were paid in
the amount of $121,000. This amount had not been encumbered.
(4) Architects were engaged at a fee of $250,000.
(5) Preliminary plans were approved, and the architects were
paid $50,000 (20 percent of the fee).
(6) The complete plans and specifications were received from
the architects and approved. A liability in the amount of

$150,000to the architects was approved and paid.
(7) Bids were received and opened in public session. After
considerable discussion in City Council, the low bid from
Hardhat Construction Company in the amount of $4,500,000
was accepted, and a contract was signed.
(8) The contractor required partial payment of $1,350,000.
Payment was approved and vouchered with the exception of a 5
percent retainage.
(9) Cash in the full amount of the grant was received from the
state government.
(10) Furniture and equipment for the annex were ordered at a
total cost of $459,500.
(11) Payment was made to the contractor for the amount payable
(see 8 above).
(12) The contractor completed construction and requested
payment of the balance due on the contract. After inspection of
the work, the amount, including the past retainage, was
approved for payment and then paid.
(13)The furniture and equipment were received at a total actual
installed cost of $459,300. Invoices were approved for payment.
(14) The remainder of the architects’ fees was approved for
payment.
(15) The City Jail Construction Fund paid all outstanding
accounts payables ($ 509,300) on December 31, 2017.
(16) The remaining cash was transferred to the City Jail Debt
Service Fund.
b. Post the entries to the City Jail Construction Fund general
ledger.
c. Prepare and post an entry closing all nominal accounts to
Fund Balance.
5–C. Part 2. Existing Debt Service Fund Transactions

The City Hall Debt Service Fund of the City of Monroe has
been open for five years; it was created to service an
$16,000,000, 3 percent tax-supported bond issue. As of
December 31, 2016, this serial bond issue had a balance of
$12,000,000. Semiannual interest payments are made on January
1 and July 1, and a principal payment of $400,000 is due on
January 1 and July 1 of each year.
As this is a regular serial bond debt service fund, the only
accounts with balances as of January 1, 2017, were Cash with
Fiscal Agent and Fund Balance—Assigned for Debt Service,
each with balances of $580,000. (Revenues were raised and
collected in cash in 2016 in order to be able to pay bond
principal and interest due on January 1, 2017.) The government
chose not to accrue interest payable.
Required:
a. Open a general journal for the City Hall Debt Service Fund
and prepare journal entries for the following transactions.
Control accounts are not necessary
(1) The fiscal agent reported that $180,000 in checks had been
mailed to bondholders for interest due on January 1, and
$400,000 in checks were mailed for bonds maturing that day.
(2) Cash in the amount of $574,000 was received from the
General Fund on June 30 and was transferred to the fiscal agent.
(3) The fiscal agent reported that checks dated July 1 had been
mailed to bondholders for interest of $ 174,000 due that day and
$400,000 in checks were mailed for bonds maturing that day.
General Fund on December 31 and transferred to the fiscal
agent to be used for the interest and principal due on January 1
(next fiscal year). The government elected to not accrue the
interest or principal at year-end.
b. Post the entries to the City Hall Debt Service Fund ledger (t-

accounts).
Fund Balance.
5–C. Part 3. New Debt Service Fund Transactions
On the advice of the city attorney, a City Jail Debt Service Fund
is opened to account for debt service transactions related to the
bond issue sold on January 1, 2017 (see Part 1).
Required:
a. Open a general journal for the City Jail Debt Service Fund.
Record the following transactions, as necessary. Control
accounts are not necessary
(1) The premium described in transaction 1 of Part 1 was
received as a transfer from the capital projects fund.
General Fund on June 30 and was transferred to the fiscal agent.
(3) The fiscal agent reported that checks dated July 1 had been
mailed to bondholders for interest due that day.
(4) The transfer described in part c of Part 1 was received.
General Fund on December 31 and transferred to the fiscal
agent to be used for interest and principal payments due on
January 1 (next fiscal year). The government elected to not
accrue the interest at year-end.
(6) $ 200,000 of the remaining cash on hand was invested.
b. Post the entries to the City Jail Debt Service Fund ledger (t-
accounts).
Fund Balance. Assume any remaining net resources are
classified as Fund Balance – Assigned for Debt Service.

5–C. Part 4. Governmental Funds Financial Statements
Required:
a. Prepare a Balance Sheet for the governmental funds for the
City of Monroe as of December 31, 2017. Include the General
Fund, the Street and Highway Fund (P4–C), the City Hall Debt
Service Fund, and the City Jail Debt Service Fund. Use the
balances computed in 4-C for the General Fund and special
revenue fund portions of this statement.
b. Prepare a Statement of Revenues, Expenditures, and Changes
in Fund Balances for the governmental funds for the City of
Monroe for the Year Ended December 31, 2017. Include the
same funds as listed in requirement a plus the City Jail
Construction Fund.
Chapter 6 – Proprietary Funds
6–C. Part 1. Internal Service Fund Transactions
The Stores and Service Fund of the City of Monroe had the
following account balances as of January 1, 2017:
Debits
Credits
Cash
$28,000
Due from other funds
27,000
Inventory of supplies
27,500
Land

18,000
Buildings
84,000
Accumulated depreciation—buildings
$30,000
Equipment
46,000
Accumulated depreciation—equipment
25,000
Accounts payable
19,000
Advance from water utility fund
30,000
Net position
126,500
Totals
$230,500
$230,500
Required:
a. Open a general journal for the City of Monroe Stores and
Service Fund and record the following transactions.
(1) A budget was prepared for FY 2017. It was estimated that
the price charged other departments for supplies should be
1.25% of cost to achieve the desired breakeven for the year.
(2) The amount due from other funds as of January 1, 2017, was
collected in full.
(3) During the year, supplies were ordered and received in the

amount of $307,000. This amount was posted to accounts
payable.
(4) $15,000 of the advance from the Water Utility Fund,
originally provided for construction, was repaid. No interest is
charged.
(5) During the year, supplies costing $250,560 were issued to
the General Fund, and supplies costing $46,400 were issued to
the Water Utility Fund. These funds were charged based on the
previously determined markup ($ 313,200 to General Fund and
58,000 to the Water Utility Fund).
(6) Operating expenses, exclusive of depreciation, were
recorded in accounts payable as follows: Purchasing, $15,000;
Warehousing, $16,900; Delivery, $17,500; and Administrative,
$9,000.
(7) Cash was received from the General Fund in the amount of
$310,000 and from the Water Utility Fund in the amount of
$50,000.
(8) Accounts payable were paid in the amount of $365,000.
(9) Depreciation in the amount of $10,000 was recorded for
buildings and $4,600 for equipment.
b. Post the entries to the Stores and Service Fund ledger (t-
accounts).
c. Prepare and post an entry closing all nominal accounts to Net
position. Compute the balance in the net position accounts,
assuming there are no Restricted Net position.
6–C. Part 2. Enterprise Fund Transactions
The City of Monroe maintains a Water and Sewer Fund to
provide utility services to its citizens. As of January 1, 2017,
the City of Monroe Water and Sewer Fund had the following
account balances:

Debits
Credits
Cash
$ 98,000
Customer Accounts Receivable
84,000
Estimated Uncollectible Accounts Receivable
$4,000
Materials and Supplies
28,000
Advance to Stores and Services Fund
30,000
Restricted Assets
117,000
Water Treatment Plant in Service
4,200,000
Construction Work in Progress
203,000
Accumulated Depreciation - Utility Plant
1,200,000
Accounts Payable
97,000
Revenue Bonds Payable

2,500,000
Net position
959,000
Totals
$4,760,000
$4,760,000
Required:
a. Open a general journal for the City of Monroe Water and
Sewer Utility Fund and record the following transactions.
(1) During the year, sales of water to non-government customers
amounted to $1,018,000 and sales of water to the General Fund
amounted to $37,000.
(2) Collections from non-government customers amounted to
$976,000.
(3) The Stores and Services Fund repaid $15,000 of the long-
term advance to the Water and Sewer Fund.
(4) Materials and supplies in the amount of $261,000 were
received. A liability in that amount was recorded.
(5) Materials and supplies were issued and were charged to the
following accounts: cost of sales and services, $169,500;
selling, $15,000; administration, $18,000; construction work in
progress, $50,000.
(6) Payroll costs for the year totaled $416,200 plus $34,200 for
the employer’s share of payroll taxes. Of that amount, $351,900
was paid in cash, and the remainder was withheld for taxes. The
$450,400 (416,200 + 34,200) was distributed as follows: cost of
sales and services, $265,800; sales, $43,900; administration,
$91,400; construction work in progress, $49,300.
(7) Bond interest (6½%) in the amount of $162,500 was paid.
(8) Interest in the amount of $17,000 (included in 7 above) was
reclassified to Construction Work in Progress.
(9) Construction projects at the water treatment plant (reflected
in the beginning balance of construction in process) were
completed in the amount of $203,000, and the assets were

placed in service. Payments for these amounts were made in the
previous year (no effect on 2017 Statement of Cash Flows).
(10) Collection efforts were discontinued on bills totaling
$2,890. The unpaid receivables were written off.
(11) An analysis of customer receivable balances indicated the
Estimated Uncollectible Accounts needed to be increased by
$5,500.
(12) Payment of accounts payable amounted to $302,000.
Payments of payroll taxes totaled $95,200.
(13) Supplies transferred from the Stores and Services Fund
amounted to $58,000. Cash in the amount of $50,000 was paid
to the Stores and Services Fund for supplies.
(14) Depreciation expense for the year was computed to be
$282,000.
(15) In accord with the revenue bond indenture, $25,000 cash
was transferred from operating cash to restricted assets.
b. Post the entries to the Water and Sewer Fund ledger (t-
accounts).
position. Compute the balance in the net position accounts,
assuming the only restricted assets are those identified with the
bond indenture and the outstanding bonds are associated with
the purchase of capital assets.
6–C. Part 3. Proprietary Fund Financial Statements
Required:
Prepare, in good form, for the proprietary funds accounted for
in Parts 1 and 2, the following:
(1) A Statement of Revenues, Expenses, and Changes in Fund
Net position for the Year Ended December 31, 2017.

(2) A Statement of Net position, as of December 31, 2017.
(3) A Statement of Cash Flows for the Year Ended December
31, 2017. Include restricted assets as a part of cash and cash
equivalents for this statement. (Assume any materials and labor
attributable to construction in process were paid by year end).
Chapter 7 – Fiduciary Funds
7–C. Part 1. Private Purpose Trust Fund Transactions
The City of Monroe Scholarship Foundation private-purpose
trust fund had the following account balances on January 1,
2017:
Debits
Credits
Cash . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
$ 50,500
Accrued Interest Receivable . . . . . . . . . . . . . . . . . .
7,500
Investments in Corporate Bonds . . . . . . . . . .
750,000
Net position Held in Trust ……………… . . . . . . . . .
$ 808,000
Totals . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
$ 808,000
$ 808,000
Required:
a. Open a general journal for the City of Monroe Community
Foundation Trust Fund and record the following transactions for

the year ending December 31, 2017:
(1) On May 1, the first semiannual interest payment was
received on the corporate bonds. The bonds pay 6 percent
annual interest, semiannually on May 1 and November 1.
(2) During the first half of the year, additional contributions
from individuals and foundations amounted to $205,500, in
cash. From these funds, $ 200,000 were invested in RST
Corporation stock on June 15.
(3) On November 1, the second semiannual interest payment
was received from the investment in bonds.
(4) On November 15, a dividend was declared by RST
Corporation in the amount of $2,000 and was received in cash.
(5) On December 1, RST Corporation stock was sold for
$204,000 cash. Those funds were immediately invested in UVW
Corporation stock.
(6) On December 15, cash scholarships in the amount of
$48,000 were made to various college students.
(7) On December 31, an accrual was made for year-end interest
on the corporate bonds.
(8) Also, on December 31, it was determined that the market
value of the corporate bonds, exclusive of accrued interest, was
$ 752,100 and that the market value of UVW Company stock
was $ 199,000.
b. Post the entries to the Community Foundation Trust ledger (t-
accounts).
position.
7–C. Part 2. Pension Trust Fund Transactions
The City of Monroe Police Department pension plan, a single-
employer, defined-benefit plan, reported the following account
balances as of January 1, 2017:

Debits
Credits
Cash
$137,000
Accrued Interest Receivable
75,000
Investments: Bonds
5,300,000
Investments: Common Stock
2,790,000
Accounts Payable
$27,000
Net position Held in Trust for Employee Benefits
8,275,000
Totals
$ 8,302,000
$8,302,000
Required:
a. Open a general journal for the City of Monroe Police
Department Pension Trust Fund and record the following
transactions for the year ending December 31, 2017:
(1) Member contributions were received in the amount of
$400,000. The City General Fund contributed the same amount.
(2) Interest was received in the amount of $212,000, including
the accrued interest receivable at the beginning of the year. The
interest accrual at year end amounted to $86,000.
(3) During the year, common stock dividends amounted to

$125,000.
(4) Investments were made during the year in common stock in
the amount of $650,000.
(5) Annuity benefits in the amount of $325,400, disability
benefits of $ 82,020 and refunds to nonvested terminated
employees of $39,800 were recorded as liabilities.
(6) Accounts payable, in the amount of $460,700, were paid in
cash.
(7) During the year, common stock valued at $505,000 was sold
for $506,800. A portion of these funds, $500,000 were invested
in common stock of a different company.
(8) At year-end, the market value of investments in bonds
increased by $7,750; the market value of investments in stocks
decreased by $3,250.
b. Post the entries to the Police Department Pension Trust
ledger (t-accounts).
position.
7–C. Part 3. Fiduciary Fund Financial Statements
Required: Using the balances from Parts 1 and 2 prepare the
following:
1. Statement of Changes in Fiduciary Net position.
2. Statement of Fiduciary Net position
Chapter 8 – Government-wide Statements
8–C. Assemble the following from previous continuous
problems: (1) the governmental funds Balance Sheet and

Statement of Revenues, Expenditures, and Changes in Fund
Balances from Section 5–C; (3) the proprietary funds Statement
of Net position and Statement of Revenues, Expenses, and
Changes in Fund Net position from Section 6–C.
Required:
1. Start a worksheet for adjustments, using the trial balance
format illustrated in the text (i.e. list accounts with debit
balances first, then accounts with credit balances). Enter the
balances from the governmental funds financial statements
prepared for Section 5-C. When doing this, follow the
following guidelines:
· Net position: Use a single account for net position (which
will include the beginning balance of all fund balance
accounts).
· Intergovernmental Revenues: When setting up the worksheet,
set up separate lines for the intergovernmental revenues as
follows:
State Grant for Highway and Street Maintenance
$ 1,065,000
Operational Grant—General Government
332,000
Capital Grant—Public Safety
1,340,000
total
$2,737,000
· Capital Assets: It is not necessary to set up separate lines for
different classes of capital (fixed) assets or accumulated
depreciation (simply use one row for Capital Assets and another
for Accumulated Depreciation).

· Confirm that the total debits and credits equal.
2. Prepare worksheet entries and post to the worksheet for the
following items. Identify each adjustment by the letter used in
the problem:
a. Record the January 1, 2017 balances of general fixed assets
and related accumulated depreciation accounts. The City of
Monroe had the following balances (excluding Internal Service
Funds):
Cost
Accumulated Depreciation
Totals
$ 64,200,000
28,700,000
b. Eliminate the capital expenditures shown in the
governmental funds Statement of Revenues, Expenditures, and
Changes in Fund Balances.
c. Depreciation expense (governmental activities) for the year
totaled $ 4,900,000.
d. Eliminate the other financing sources from the sale of bonds
by recording a liability for bonds payable and the related
premium.
e. As of January 1, 2017, the City of Monroe had $12,000,000
in general obligation bonds outstanding.
f. Eliminate the expenditures for bond principal.
g. Accrue interest in the amount of $328,000. (Two bond
issues were outstanding; interest payments for both were last
made on July 1, 2017. The computation is as follows:
($11,200,000 × .03 × 6/12) + ($4,000,000 ×. 08 × 6/12) =
$328,000).

h. Adjust for the interest accrued in the prior year government-
wide statements, but recorded as an expenditure in the 2017
fund basis statements, ($12,000,000 × .03 × 6/12) = $180,000.
i. Amortize bond premium in the amount of $ 10,000.
j. Make adjustments for additional revenue accrual. The only
adjustment is for property taxes to eliminate the current year
deferral of property taxes.
k. Adjust for the $21,000 of property taxes that was deferred
in 2016 and recognized as revenue in the 2017 fund-basis
statements.
l. Assume the City adopted a policy in 2017 of allowing
employees to accumulate compensated absences. Make an
adjustment accruing the expense of $ 42,000 Charge
compensated absences expense.
m. Bring in the balances of the internal service fund balance
sheet accounts. Again, use a single account for all capital assets
and a second account for all accumulated depreciation balances
(use a separate column of the worksheet to enter Internal
Service Fund entries).
n. No revenues from internal service funds were with external
parties. Assume $3,200 of the $11,200 “Due from Other Funds”
in the internal service accounts represents a receivable from the
General Fund and the remaining $8,000 is due from the
enterprise fund. Eliminate the $3,200 interfund receivables.
o. Reduce governmental fund expenses by the net operating
profit of internal service funds. As the amount is small, reduce
general government expenses for the entire amount.
p. Eliminate transfers that are between departments reported
within governmental activities.
3. Prepare, in good form, a Statement of Activities for the City
of Monroe for the Year Ended December 31, 2017. For purposes
of this statement, assume:
· $ 332,000 in the General Fund is a state grant specifically to
support general government programs.
· $ 1,065,000 in the Street and Highway Fund is an operating

grant specifically for highway and street maintenance expenses.
· $ 1,340,000 in the City Jail Construction Fund is a capital
grant that applies to public safety.
Use the balances computed from the worksheet completed in
part 2 for the governmental activities portion of the statement.
Use the solution to P6–C (Enterprise fund) to prepare the
business activities portion (net any short-term interfund
payables/receivables).
4. Prepare, in good form, a Statement of Net position for the
City of Monroe as of December 31, 2017. Group all capital
assets, net of depreciation. Include a breakdown in the Net
position section for (a) capital assets, net of related debt, (b)
restricted, and (c) unrestricted. For purposes of classifying net
position for the governmental activities, assume:
· For the governmental activities net position invested in capital
assets, net of related debt, the related debt includes the bonds
payable, the premium on bonds payable, and the advance from
the water utility fund.
· The special revenue fund resources are restricted by the
granting agency for street and highway maintenance. Assume
$204,500 are the only restricted resources in the governmental
activities.
5. Prepare the reconciliation necessary to convert from the fund
balance reported in the governmental funds Balance Sheet to the
net position in the government-wide Statement of Net position.
6. Prepare the reconciliation necessary to convert from the
change in fund balances in the governmental funds Statement of
Revenues, Expenditures, and Changes in Fund Balances to the
change in net position in the government-wide Statement of
Activities.

Chapter 13 – Financial Statement Analysis
Assemble the financial statements prepared for the City of
Monroe. These financial statements will be in the solutions to
Exercises 5–C, 6–C, 7–C, and 8–C. Assume a population of
30,000 and fair value of property in the amount of $350 million.
Compute the following ratios, following the guidance used for
the Village of Elizabeth in this chapter:
(1) Financial Position – Governmental Activities
(2) Financial Position – General Fund.
(3) Quick Ration – Governmental Activities
(4) Leverage – Primary Government
(5) Debt Coverage – Enterprise Funds
(6) Debt Service to Total Expenditures
(7) Debt per Capital – Primary Government
(8) Debt to Assessed Value of Property – Primary Government
16

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