City of smithville project answers

Table of Contents
Chapter 1
Introducing the City of Smithville Simulation
Welcome……………………………………………………….4
System Requirements 4
Licensing 4

Running or Removing Cities of Smithville and Bingham
Running the Cities of Smithville and Bingham 5
Removing the Cities of Smithville and Bingham 5
General Operating Instructions

Opening the Cities of Smithville and Bingham 5

Creating a new project 6

Opening an existing project 6

Saving the current project 7

City of Smithville Main Window

Adding and posting journal entries 8

Editing/deleting/unposting journal entries 8

Working with the ledgers screen 10

Working with the detail journal screen 10

Printing Reports 11

Exporting Trial Balances 11

Completing Chapters 2 through 6 and 9 of the

City of Smithville Short Version 13

Chapter 2 Opening the Books 14

Chapter 3 Recording the Annual Budget 18

Chapter 4 Recording Operating Transactions Affecting

the General Fund and Governmental Activities at the

Government-wide Level 20

CHAPTER 1

Chapter 1
INTRODUCING THE CITY OF SMITHVILLE
Welcome
Thank you for purchasing the Cities of Smithville and Bingham Governmental Accounting Software. This software is designed to be used with the McGraw-Hill textbook Accounting for Governmental & Nonprofit Entities, 17thedition.

System Requirements

To use the Cities of Smithville and Bingham accounting software application, you must have the following:

Windows

· 2.33GHz or faster x86-compatible processor, or Intel Atom™ 1.6GHz or faster processor for netbook class devices

· Microsoft® Windows Server 2008, Windows 7, or Windows 8 Classic

· 512MB of RAM (1GB recommended)

Mac OS

· Intel® Core™ Duo 1.83GHz or faster processor

· Mac OS X v10.7, and above

· 512MB of RAM (1GB recommended)

· Adobe AIR 15 or latest version

· Recommended screen resolution of 1024 x 768 minimum

· Spreadsheet program (in order to easily view the exported CSV files)

· Excel 2003 or later (in order to view the exported Excel files)

· Adobe Reader 9 or later to read saved report files

[Note: Read the following instructions (pages 5-12) before beginning your first assignment. Refer back to this information as needed.]

RUNNING OR REMOVING THE Cities of Smithville and Bingham

Running the Cities of Smithville and Bingham
The software application can be run by clicking on the “Cities of Smithville and Bingham” icon/program as indicated in the “Opening the Cities of Smithville and Bingham” instructions below. Click “Install” and follow the installation prompts. It is recommended to save this file in your Programs/Applications or Desktop.

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You may exit the program by clicking the "X" button at the top right corner on a PC or top left corner on a MAC.

Removing the Cities of Smithville and Bingham
You can remove the software application by uninstalling the “Cities of Smithville and Bingham” program.

GENERAL OPERATING INSTRUCTIONS
Opening the Cities of Smithville and Bingham
You can open the Cities of Smithville and Bingham at any time by clicking on the “Cities of Smithville and Bingham” icon/program.

Creating a New Project

To access the instructions for the Smithville project click on Open Instructions in the opening window and select and print the short version project instructions file. To create a new project, click on“Create New Project.” The Create New Project window will appear, as shown below.

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Enter your first and last name, then select City of Smithville as your project and click [Create]. The main project window will pop-up once the project is created and you will be ready to begin entering journal entry data for your first assignment. This step creates the accounts and funds that you will need to complete the short version“City of Smithville” project. After you have completed the journal entries for each assignment, you should save your project data file in a folder that you have created on your computer. For your own protection against hard-drive failure or file corruption, we recommend that you create a dated backup file on a removable device (e.g., flash drive) or cloud storage at the end of each session. This will permit you to reopen your project to the previous stage of completion should a computer problem occur during your current session.

Opening an Existing Project
After your initial data entry session, click on “Open Existing Project,” and then select and open the data file you saved at the end of your previous session.

Saving the Current Project
During or at the end of each assignment, click on and . If a filename has already been specified, the current filename should be displayed in the file name box but may be changed if desired.

City Of Smithville Main Window

If you have opened a project file, the main project window should appear as follows:

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To navigate between the Journal, Ledger, and Account screens, simply click on the [TAB] for that particular screen.

To switch between different funds and governmental activities, government-wide, choose the desired entity from the drop-down menu.

You can verify which entity you are working on by the caption on the upper right corner of the window. It will show the title of your project, and the current fund you are in.

The main window has the same standard window controls as most other applications. To close down your project, simply click on the [X] box. If you click on the [X] box you will be asked whether you want to close the program without saving changes. Remember the folder location where you save your file so it will be easier to retrieve it when you want to reopen the file.

Adding and Posting Journal Entries
You need to be in the Journal view before you can add any journal entries. Once you are in the Journal view, you will see the journal entry panel on the lower portion of the window.

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Before ANY entry can be added to the Journal, a transaction description, account #-description, and debit or credit amount must be specified.

Once you have filled in the necessary fields, simply click on [Add Entry] to add the entry to the journal. If the entry being made is a closing entry, you must click on the check mark for [Closing Entry].

If one of the fields is missing a value or contains an illegal character, the [Add Entry] button will remain disabled.

If the account selected from the drop-down [Account (# - Account Description)] menu is a control account, the detail journal will automatically open for entering the transaction detail. When entering data in the detail journal, you must first select an item from the drop-down [TransactionDescription] or type your own description in the box before selecting the account. When you have completed your entries the detail total for the transaction will be entered into the control account.

Once you have entered a batch of entries into the system, you can post them to the general ledger at any time by clicking the [Post Entries] button. In the case of the General Fund, posting transactions also posts entries from the detail journal to the Revenue ledger and Appropriations, Encumbrances, Expenditures ledgers as well. The [Post Entries] button only posts entries for the fund/entity that is currently open.

Editing/Deleting/Unposting Journal Entries
To edit entries that have already been entered, double click or right click on the entry, and select edit. You will know you are in edit mode when the entry form turns red and the blanks will fill in with the data from the journal. If you wish to delete an entry, right click on the item and select [Delete] or choose [Edit]-[Delete].

As in real-world systems, the software does not allow you to edit entries that have already been posted. So, it is recommended that you verify the accuracy of entries before clicking [Post Entries]. However, for your convenience we have added the capability to “unpost” individual batches of posted transactions. Note that prior to unposting a batch, all batches must be posted. To unpost simply highlight any entry within the batch you want to unpost and either right click and select [Unpost] or select [Unpost] from the Edit menu. Make all necessary editing changes, then click on [Post Entries] and your corrections will be made to the appropriate accounts. If you need to add a missing entry to a previously posted journal entry, then unpost as described above, highlight the line below which a new entry is to be added, and right click and select “Insert Entry.”Note that the “Insert Entry” function will work if you are inserting an entry prior to a balance sheet account. However, it will not work when inserting an entry prior to any account that has an associated subsidiary ledger (e.g., estimated revenues, expenditures).

Screen shot of “right clicking” on a journal entry.

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Enter the data for the new entry and click “Add Entry” to insert the new entry. A provision also allows you to clear all of the transactions from the current fund or entity. Under [File]-[Student Assistance] you will find the option [Wipe out data forcurrent fund or governmental activities]. The wipe out function should be used as a last resort since making changes by editing is quite easy. Once you select this option, there is no going back. It will remove ALL of the transactions for the current fund or entity.

Working with the Ledgers Screen
Switch to the Ledgers screen by clicking on the ledgers tab. The screen is shown below.

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Switch entities at any time by changing the selection. Depending on the fund or entity with which you are working, there may be different ledgers for you to view. Choose the ledger you want to view from the drop-down list.

If you want to print a ledger, you need to select the [Reports] menu, and choose the report to print.

Working with the Detail Journal Screen
The General Fund of the City of Smithville uses a Detail Journal to avoid recording operating or budget detail in the general journal/ledgers.

If you choose a control account that has subsidiary detail associated with it, you will be taken directly to the Detail Journal. If you attempt to edit a journal entry that has associated subsidiary detail, you will automatically be prompted to also open the Detail Journal for editing, if desired.

The Detail Journal screen for the General Fund follows.

The Detail Journal operates very similar to the entry screen on the General Journal. Fill in the blanks or, in the case of the [Transaction Description] box, select a description from the drop-down menu, and click [Add Entry]. The balance of the entries for this transaction is automatically updated. When you exit the Detail Journal the balance will be entered into the control account in the General Journal. Please note that the year and reference numbers of these transactions are based on the originating entry (the line in the General Journal).

Printing Reports
All of the reports for the City of Smithville are available through the Reports menu. Simply go to the menu and click on the report you want. To print, click on the “Print” icon and print in the normal manner. If you need to create a “Save as Printable PDF File,” accept the default file name and save location, or change the name and/or folder location if you prefer.

Exporting Trial Balances
To make it easier to prepare financial statements/schedules, spreadsheet files for all trial balances for each entity and each year of transactions, as well as detail subsidiary account balances (General Fund only), can be exported to either Excel or CVS for non-Microsoft applications. To export an item, select it from the [File], [Export] menu, accept the default file name and folder location, and save it. You can change the file name and/or location if you prefer.

Completing Chapters 2 through 4 City of Smithville
Foreword
This version written for the computer presents a series of transactions covering activities for the City of Smithville, assuming the city utilizes the dual-track accounting approach to the GASBreporting model described in Reck and Lowensohn, Accounting for Governmental & Nonprofit Entities, 17th edition. The transactions presented relate to the city’s General Fund, capital projects, and debt service funds, as well as an additional accounting entity, governmental activities at the government-wide level. The transactions and instructions in this series are designated Chapter 2, Chapter 3, etc., corresponding to the chapters of Reck and Lowensohn,Accounting for Governmental & Nonprofit Entities, 17th edition.

You should begin the project with Chapter 2 of the instructions as you complete Chapter 2 of the textbook. Some problems require you to print trial balances or other documents. Other problems require the preparation of financial statements or other documents. The specified documents can either be turned in chapter by chapter or retained in a cumulative folder until the end of the project, depending on your instructor’s preference and instructions. Some instructors may prefer that you electronically submit your project data file and an Excel or .pdffiles containing your trial balances, financial statements, and other documents, rather than submitting printed copies.

To minimize errors, you should read and follow all instructions carefully. Students find that this computerized cumulative problem significantly enhances their learning if they complete each City of Smithville chapter as the corresponding chapter of the textbook is covered. Conversely, students who procrastinate often find that the project takes more time than they expected and that it is harder to recall how to make the journal entries covered in the earlier chapters. Thus, delaying until your project is nearly due may increase the total time it takes you to do the project and leave you little time for anything else that week. So, our advice is to stay current with the project.

Chapter 2 Opening the Books

The City of Smithville just implemented a dual-track computerized accounting system, which provides files for general journal entries and posting to appropriate general ledger/subsidiary ledger accounts. Budgetary, operating statement, and balance sheet accounts are provided for the General Fund and the other governmental fund types. Operating statement accounts and balance sheet accounts are also provided for governmental activities at the government-wide level As the city’s new accountant (lucky you!), it is your job to enter the city’s initial accounting information as of December 31, 2016, in preparation for placing the new accounting system in full operation effective January 1, 2017.

Required

Open the City of Smithville software by clicking on the Cities of Smithville and Bingham program. If creating a new project, click [Create New Project], when the [Create New Project] window appears choose City of Smithville from the [Choose a City] drop down menu. In addition, in the [Enter your name] box type your name so that it will appear on all printable reports and then click [Create]. This will create the project and provide all of the funds and accounts that you will need to complete the Short Version City of Smithville cumulative problem.

To protect yourself from possible hard drive failure or corruption of your project data file, we recommend that you save your file to not only your hard drive but also another location (e.g., flash drive or the cloud), creating a backup file for your project at the end of each session.

To open an existing project, click on [Open Existing Project] in the opening window.

a. If it is not already displayed, select [General Fund] in the [Current Accounting Entity] window and the [Accounts] tab. Clicking on the [Accounts] tab allows you to see the chart of accounts that will be used for the [General Fund]. A different chart of accounts is provided for each of the accounting entities. Next, select the [Journal] tab and click the drop down menu for [Account (# - Description)]. You will see the same general ledger accounts that were listed when you clicked on the [Accounts] tab. (Note: For purposes of this exercise, date suffixes are omitted from the Expenditures and Encumbrances accounts as expenditures occur only from a single year’s appropriations.) You will not use all of the accounts listed for the short version project. In addition, you will notice certain entities (the Solid Waste Disposal Fund and Tax Agency Fund) that are used in the full version of the City of Smithville project but not in the short version. You should ignore these entities.

b. The trial balance of the General Fund of the City of Smithville as of December 31, 2016, is shown in the following trial balance. Select the [Journal] tab and create a journal entry to enter the balance sheet accounts and amounts shown in the trial balance (review software operating procedures in Chapter 1 of these instructions if necessary). Be sure to enter 2016from the drop-down [Year] menu and enter the paragraph number from these instructions in the [Transaction Description] box of the [Journal]. For this entry you should enter 2-b.Select the appropriate accounts individually and insert the appropriate amounts. (Note: Enter all dollar amounts without dollar signs, without commas, and without decimal points. All amounts in this project should be rounded to the nearest whole dollar. For all entries, it is vitally important that the correct year be selected.)

You enter each account and amount one line at a time by clicking [Add Entry].

The year and transaction description need only be entered for the first line of the journal entry; it will remain in the boxes for the rest of the accounts. When you have completed entering all account data and amounts, verify all of your entries, including date and paragraph numbers. When you are sure that your entries are correct, click [Post Entries] to post the items to the general ledger of the General Fund.

Unpost capability. As discussed in Chapter 1 of these instructions, the City of Smithville software program permits students to “unpost” a particular batch of posted transactions. Unposted entries then can be edited and re-posted. In addition, any omitted entries can be inserted above a selected journal line in any unposted batch of entries. Prior to unposting a batch all batches must be posted.

Select [Reports, Trial Balances, Post-Closing Trial Balance]and print or save as a .pdf file the post-closing trial balance for year 2016. Retain the printed trial balance in your personal cumulative folder until the due date assigned by your instructor for the project, or submit a saved version of the trial balance electronically if directed to do so by your instructor.

CITY OF SMITHVILLE

General Fund Post-closing Trial Balance

As of December 31, 2016

General Ledger

Account Title Debits Credits

Cash $ 194,660

Taxes Receivable—Delinquent 258,906

Allowance for Uncollectible Delinquent Taxes $ 57,800

Interest and Penalties Receivable on Taxes 40,110

Allowance for Uncollectible Interest and Penalties 11,726

Due from State Government 165,000

Vouchers Payable 136,027

Fund Balance—Restricted—Public Safety 15,000

Fund Balance—Committed—Public Works 29,700

Fund Balance—Assigned—Culture and Recreation 56,800

Fund Balance—Unassigned 351,623

Totals $ 658,676 $ 658,676

c. Select [Governmental Activities, Government-wide Level] in the [Current Accounting Entity] drop-down box and the [Accounts] tab. You will see most of the accounts included in the preceding trial balance, plus many other accounts that will be used in the various chapters of the City of Smithville project.

d. Select the [Journal] tab and create a journal entry to enter the statement of net position (i.e., balance sheet) accounts and amounts shown in the following trial balance. It is necessary to enter these items in the accounts of the governmental activities category at the government-wide level as the general journal and general ledger for governmental activities comprise a separate “set of books” from those for the General Fund. Be sure to enter 2016from the drop-down date menu and enter 2-d in the [Transaction Description]box. Select each account individually and insert the appropriate debit or credit amount for each account. When you have completed entering the initial data, verify the accuracy and click [Post Entries] to post the entry to the governmental activities, government-wide general ledger.

CITY OF SMITHVILLE

Governmental Activities Government-wide Level

Post-closing Trial Balance

As of December 31, 2016

General Ledger

Account Title Debits Credits

Cash $ 194,660

Taxes Receivable—Delinquent 258,906

Allowance for Uncollectible Delinquent Taxes $ 57,800

Interest and Penalties Receivable on Taxes 40,110

Allowance for Uncollectible Interest and Penalties 11,726

Due from State Government 165,000

Land 4,180,000

Infrastructure 9,862,000

Accumulated Depreciation—Infrastructure 2,713,944

Buildings 6,296,000

Accumulated Depreciation—Buildings 1,731,000

Equipment 3,556,800

Accumulated Depreciation—Equipment 1,765,480

Vouchers Payable 136,027

Net Position—Net Investment in Capital Assets 17,684,376

Net Position—Restricted for Public Safety 15,000

Net Position—Unrestricted 438,123

Totals $24,553,476 $24,553,476

e. Select [Reports, Trial Balances, Post-Closing Trial Balance] and print the post-closing trial balance for 2016, or submit a saved .pdf version of the trial balance electronically if directed to do so by your instructor. Retain in your cumulative file until the due date for your project or the time specified by your instructor.

Before closing the City of Smithville, click on [File], and [Save/Save As] to save your work. If you close the file by clicking on the [X] box you will be asked if you want to save your changes before closing.

Chapter 3 Recording the Annual Budget

The following budget for the General Fund of the City of Smithville was legally adopted for the fiscal year ending December 31, 2017.

Estimated Revenues:

Taxes—Real Property $1,679,070

Interest and Penalties on Taxes 9,000

Licenses and Permits 600,000

Fines and Forfeits 410,000

Intergovernmental Revenue 275,000

Charges for Services 236,000

Total Estimated Revenues $3,209,070

Appropriations:

General Government $ 617,200

Public Safety 1,436,600

Public Works 805,000

Culture and Recreation 360,300

Total Appropriations $3,219,100

Required

a. After opening the file you created for Chapter 2 of this project, record the budget in the general journal, providing entries in the Detail Journal when directed. Begin by selecting [General Fund] in the [Current Accounting Entity] drop-down box and the [Journal] tab. In the [Year] box, be sure to select the year 2017. Enter 3-a in the [Transaction Description] box. Select “Estimated Revenues” in the drop down [Account (# - Description)] window. This will take you automatically to the Detail Journal where you will enter the detail for each estimated revenue source. In the Detail Journal, select “Budget Authorization” from the drop-down menu for [Transaction Description].

When you have finished entering the estimated revenue detail information, verify that the correct balance is shown in the Detail Journal, then click on [Return to General Journal] and the total estimated revenues will be entered in the general journal Estimated Revenues control account. Follow the same procedure to record the budget detail for Appropriations. Complete the general journal entry by debiting or crediting Budgetary Fund Balance as appropriate to make the journal entry balance. Note that budgetary entries have no effect on governmental activities at the government-wide level and thus the budget information is only recorded in the General Fund.

When you are satisfied you have made the entry correctly, post it to the general ledger by clicking on [Post Entries]. Before posting, or after unposting as described previously, you can edit, delete or insert entries in the journal by placing the cursor in the line you want to adjust and then right-clicking. Note that the “Insert Entry” function will work if you are inserting an entry prior to a balance sheet account. However, it will not work when inserting an entry prior to any account that has an associated subsidiary ledger (e.g., estimated revenues, expenditures).If you make too many errors and want to start over, you can select [Student Assistance] from the [File] menu and completely wipe out all data from the current fund or governmental activities entity on which you are working. Generally, such radical action should be unnecessary given the [Unpost] and [Insert]capabilities of the program, as described previously.

b. Go to [Reports], print the pre-closing subsidiary ledgers and pre-closing General Fund trialbalance for year 2017and retain them in your cumulative file until directed by your instructor to submit them, or save and submit these documents electronically if directed to do so by your instructor. (As of this time, only the budget has been recorded.)This is your last opportunity to print or export these documents with budgetary information only. After operating transactions have been journalized and posted in Chapter 4, subsidiary ledgers and trial balances will contain both budgetary and operating accounts and balances.

Before closing the City of Smithville, click on [File], and [Save/Save As] to save your work. If you close the file by clicking on the [X] box you will be asked if you want to save your changes before closing.

Chapter 4 Recording Operating Transactions Affecting the General Fund and Governmental Activities at the Government-wide Level

Presented below are a number of transactions for the City of Smithville that occurred during fiscal year 2017, the year for which the budget given in Chapter 3 was recorded. Read all instructions carefully.

a. After opening the data file containing your data from Chapters 2 and 3 of this project, record the following transactions in the general journal for the General Fund and, if applicable, in the general journal for governmental activities at the government-wide level. For all entries, the date selected should be year 2017. For each of the paragraphs that requires entries in both the General Fund and governmental activities journals, you can either record them in both journals on a paragraph-by-paragraph basis or, alternatively, record all the General Fund journal entries first for all paragraphs, then complete the governmental activities journal entries for all paragraphs. If you choose the latter method, it might be useful to print the General Fund general journal entries to assist in making the entries in the governmental activities journal. Regardless of the method you choose, we highly recommend that you refer to the illustrative journal entries in Chapter 4 of the Reck and Lowensohn textbook (17thedition) for guidance in making all entries.

For each entry affecting budgetary accounts or operating statement accounts, the Detail Journal will automatically open to allow you to record the appropriate amounts in the detail budgetary or actual accounts as was the case in Chapter 3.

Before closing the City of Smithville, click on [File], and [Save/Save As] to save your work. If you close the file by clicking on the [X] box you will be asked if you want to save your changes before closing.

1. [Para. 4-a-1] On January 2, 2017, real property taxes were levied for the year in the amount of $1,731,000. It was estimated that 3 percent of the levy would be uncollectible.

Required: Record this transaction in both the General Fund and governmental activities journal. (Note: Type 4-a-1 as the paragraph number in the [Transaction Description] box for this entry; 4-a-2 for the next transaction, etc. Careful referencing by paragraph number is very helpful should you need to determine where you may have omitted a required journal entry or may have made an error.)Select “Accrued Revenue” in the drop down [Transaction Description] menu in the Detail Journal related to the General Fund entry.

2. [Para. 4-a-2] Encumbrances were recorded in the following amounts for purchaseorders issued against the appropriations indicated:

General Government $ 98,453
Public Safety 183,259
Public Works 217,675
Culture and Recreation 108,927
Total $608,314

Required: Record the encumbrances in the General Fund general journal and Detail Journal as appropriate. In the Detail Journal, select “Purchase Orders” from the drop down [Transaction Description] menu. You can also type in an alternative description, if desired.

3. [Para. 4-a-3] Cash was received during the year in the total amount of $3,399,599 for collections from the following receivables and cash revenues, as indicated:

Current Property Taxes $1,561,535
Delinquent Property Taxes 235,000

Interest and Penalties Receivable on Taxes 34,270

Due from State Government 165,000

Revenues: (total: $1,403,794)

Licenses and Permits 601,314

Fines and Forfeits 410,660

Intergovernmental 160,000

Charges for Services 231,820

Total $3,399,599

Required: Record the receipt of cash and the related credits to receivables and revenues accounts, as applicable, in both the General Fund and governmental activities journals. (Select “Received Cash” in the drop down [Transaction Description] menu in the Detail Journal related to the General Fund revenue entries.)

For purposes of the governmental activities entries at the government-wide level assume the following revenue classifications:

General Fund Governmental Activities

Licenses and Permits Program Revenues—General Government—

Charges for Services

Fines and Forfeits Program Revenues—General Government—

Charges for Services

Intergovernmental Program Revenues—Public Safety—Operating

Grants and Contributions

Charges for Services Program Revenues—General Government—

Charges for Services, $143,850

Program Revenues—Culture and Recreation—

Charges for Services, $87,970

4. [Para. 4-a-4] General Fund payrolls for the year totaled $2,638,220. Of that amount, $395,733 was withheld for employees' federal income taxes; $344,623 for federal payroll taxes; $98,933 for employees’ state income taxes; $194,545 for retirement funds administered by the state government; and the remaining $1,604,386 was paid to employees in cash. The City of Smithville does not record encumbrances for payrolls. The payrolls were chargeable against the following functions:

General Government $ 518,022
Public Safety 1,242,447
Public Works 588,947
Culture and Recreation 288,804
Total $2,638,220

Required: Make summary journal entries for payroll in both the General Fund and governmental activities general journals for the year.

5. [Para. 4-a-5] Invoices for some of the goods recorded as encumbrances in transaction 4-a-2 were received and vouchered for payment, as listed below. Related encumbrances were canceled in the amounts listed below (Select “Elimination” in the drop down [Transaction Description] menu in the Detail Journal):

Expenditures Encumbrances

General Government $ 94,776 $ 94,752 Public Safety 175,406 175,620

Public Works 194,408 194,512
Culture and Recreation 108,187 108,150
$572,777 $573,034

Required: Record the receipt of these goods and the related vouchers payable in both the General Fund and governmental activities journals. At the government-wide level, you should assume the city uses the periodic inventory method. Thus, the invoiced amounts above should be recorded as expenses of the appropriate functions, except that $32,340 of the amount charged to the Public Works function was for a vehicle (debit Equipment for this item at the government-wide level).

6. [Para. 4-a-6] During FY 2017, the City of Smithville received notification that the state government would send $115,000 at the beginning of the next fiscal year. Based on the city’s definition of “available for use,” the city considers the funds available for Public Safety’s use in the current reporting period. The budget for the current year included this amount as "Intergovernmental Revenue.”

Required: Record this transaction as a receivable and revenue in the General Fund and governmental activities journals. (Note: Select “Accrued Revenue” in the [Transaction Description] box in the Detail Journal). At the government-wide level, assume that this item is an operating grant to the Public Safety function.

7. [Para. 4-a-7] Checks were written in the total amount of $1,721,571 during2017. These checks were in payment of the following items:

Vouchers Payable $700,000

Due to Federal Government 731,506

Due to State Government 290,065

Total amount paid $1,721,571

Required: Record the payment of these items in both the General Fund and governmental activities general journals.

8. [Para. 4-a-8] Current taxes receivable uncollected at year-end, and the related Allowance for Uncollectible Current Taxes account, were both reclassified as delinquent.

Required: Record this transaction in the General Fund and governmental activities journals.

9. [Para. 4-a-9] Interest and penalties receivable on delinquent taxes was increased by $11,000; $3,500 of this was estimated as uncollectible.

Required: Record this transaction in the General Fund and governmental activities journals as a revenue transaction.

10. [Para. 4-a-10] The city’s budget for 2017 was legally amended as follows:

Estimated Revenues:

Decreases Increases
Charges for Services $ 5,000

Total $ 5,000 $0

Appropriations:
Public Safety $11,000
Public Works $1,600
Culture and Recreation 37,500
$11,000 $39,100
Note: These amendments decrease the balance of the Budgetary Fund Balance account by $33,100.

Required: Record the budget amendments in the General Fund general journal only. Budgetary items do not affect the government-wide accounting records. (Note: Select “Budget Amendment” in the [Transaction Description] box in the Detail Journal.)

Post all journal entries to the general and subsidiary ledgers: After reviewing all entries for accuracy, including year and paragraph numbers, post all entries to the general ledger accounts and to all subsidiary ledger accounts, by clicking on [Post Entries]. Also post all entries in the governmental activities journal.

11. Closing Entry.Following the instructions in the next paragraph, prepare and post the necessary entries to close the Estimated Revenues and Appropriations accounts to Budgetary Fund Balance, and Revenues and Expenditures to Fund Balance—Unassigned. Because the City of Smithville honors all outstanding encumbrances at year-end, it is not necessary to close Encumbrances to Encumbrances Outstanding at year-end since encumbrances do not affect the General Fund balance sheet or statement of revenues, expenditures, and changes in fund balances. If, however, you would like to avoid having these accounts appear in the post-closing trial balance, you can opt to close Encumbrances to Encumbrances Outstanding. If the accounts are closed, they would need to be reestablished at the beginning of the next year.

To close the temporary accounts, you must click on the check mark for [Closing Entry], “Closing Entry” will appear in the [Transaction Description] box. Be sure the check mark in the box for [Closing Entry] is showing before closing each individual account. Also, you will be sent to the Detail Journal where you must close each individual budgetary or operating statement account. To determine the closing amounts for both General Ledger and subsidiary ledger accounts, you will need to first save and print the pre-closing version of these ledgers for year 2017 from the [Reports] menu.

At year-end, an analysis by the city’s finance department determined the following constraints on fund balances in the General Fund. Prepare the appropriate closing/reclassification journal entry in the General Fund to reclassify amounts between Fund Balance—Unassigned and the fund balance accounts corresponding to the constraints shown below. (Note: You should consider the beginning of year balances in fund balance accounts in calculating the amounts to be reclassified. Be sure the check mark in the box for [Closing Entry] is showing before closing each individual account.)

Account Ending Balance

Fund Balance—Committed—General Government $30,000

Fund Balance—Restricted—Public Safety 36,000

Fund Balance—Committed—Public Works 12,700

Fund Balance—Assigned—Culture and Recreation 0

Note: DO NOT PREPARE CLOSING ENTRIES FOR GOVERNMENTAL ACTIVITIES AT THIS TIME since governmental activities will not be closed until Chapter 9, after the capital projects fund (Chapter 5) and debt service fund (Chapter 6) transactions affecting governmental activities at the government-wide level have been recorded.

b. Select [Export] from the drop down [File] menu to create an Excel worksheet of the General Fund post-closing trial balance as of December 31, 2017. Use Excel to prepare in good form a balance sheet for the General Fund as of December 31, 2017. Follow the format shown in Illustration 4-3 of Reck andLowensohn, Accounting for Governmental & Nonprofit Entities, 17th edition textbook (hereafter referred to as “the textbook.”)

c. Select [Export] from the drop down [File] menu to create an Excel worksheet of the General Fund pre-closing subsidiary ledger account balances for the year 2017. Use Excel to prepare in good form a statement of revenues, expenditures, and changes in fund balance for the General Fund for the year ended December 31, 2017. (See Illustration 4-4 in the textbook for an example format.)

d. Use the Excel worksheet of the General Fund pre-closing subsidiary ledger account balances created in part c above to prepare in good form a schedule of revenues, expenditures, and changes in fund balance—budget and actual for the General Fund for the year ended December 31, 2017. (See Illustration 4-5 in the textbook for an example format.)

e. Prepare a reconciliation of total expenditures reported in your solution to part c of this problem with the total expenditures and encumbrances reported in your solution to part d of this problem. (In Chapter 4below Illustration 4-5, see discussion and example which compares Illustrations 4-4 and 4-5.)

[Note: File the printouts of all your worksheets and your completed financial statements in your cumulative problem folder until directed by your instructor to submit them, unless your instructor specifies submission of files electronically.]

Before closing the City of Smithville, click on [File], and [Save/Save As] to save your work. If you close the file by clicking on the [X] box you will be asked if you want to save your changes before closing.

Licensing
This manual for the short version project was written for use with the Cities of Smithville and Bingham software, revised to accompany the 17th edition of Reck and Lowensohn, Accounting for Governmental & Nonprofit Entities. The manual and the software described in it are copyrighted, with all rights reserved. This manual and the Cities of Smithville and Bingham software may not be copied, except as otherwise provided in your software license or as expressly permitted in writing by McGraw-Hill Higher Education, Inc.

Use of the Cities of Smithville and Bingham governmental accounting software (the “Software”) and its documentation are governed by the terms set forth in your license. Such use is at your sole risk. The software and its documentation (including this manual) are provided “AS-IS” and without warranty of any kind.

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Connect Guide

City of Smithville

Software Simulation

For use with McGraw-Hill Education

Accounting for Governmental & Nonprofit Entities

17th Edition

By Jacqueline L. Reck and Suzanne L. Lowensohn

Note: Disregard references to “City of Bingham”; it is not used within this course.

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© 2016 by McGraw-Hill Education. This is proprietary material solely for authorized instructor use. Not authorized for sale or distribution in any manner. This document may not be copied, scanned, duplicated, forwarded, distributed, or posted on a website, in whole or part.