Question: The following information relates to Dell City,
The following information relates to Dell City, whose first fiscal year ended December 31, 2019. Assume Dell has only the long-term debt as specified below and only the funds necessitated by the following information.
1. General fund:
a. There were no amendments to the budget as originally adopted.
b. No property taxes receivable have been written off, and the allowance for uncollectibles balance is unchanged from the initial entry at the time of the original tax levy.
c. There were no encumbrances outstanding at December 31, 2019.
2. Capital projects fund:
a. Finances for Dell’s new civic center were provided by a combination of general fund transfers, a state grant, and an issue of general obligation bonds. Any bond premium on issuance is to be used for the repayment of the bonds at their $1,000,000 par value. At December 31, 2019, the capital projects fund for the civic center had the following closing entries:
b. Also, at December 31, 2019, capital projects fund entries reflected Dell’s intention to honor the $900,000 purchase orders and commitments outstanding for the center.
c. During 2019, total capital projects fund encumbrances exceeded the corresponding expenditures by $52,000. All expenditures were previously encumbered.
d. During 2020, the capital projects fund received no revenues and no other financing sources. The civic center building was completed in early 2020, and the capital projects fund was closed by a transfer of $27,000 to the general fund.
3. Electric utility enterprise fund:
a. Dell issued $4,000,000 revenue bonds at par. These bonds, together with a $500,000 transfer from the general fund, were used to acquire an electric utility. Electric utility revenues are to be the sole source of funds to retire these bonds beginning in the year 2024.
Required
Answer questions 1–15 with a yes (Y) or no (N) in the space provided. Answer questions 16–22 with the correct amount in the space provided.
1. Did recording budgetary accounts at the beginning of 2019 increase the fund balance by $300,000? ____________
2. Should the budgetary accounts for 2019 include an entry for the expected transfer of funds from the general fund to the capital projects fund? ____________
3. Should the $500,000 payment from the general fund, which was used to help establish the electric utility fund, be reported as ‘‘other financing uses—operating transfers-out’’? ____________
4. Did the general fund receive the $30,000 bond premium from the capital projects fund? ____________
5. Should a payment from the general fund for electricity received for normal civic center operations be reported as ‘‘other financing uses—operating transfers-out’’? ____________
6. Does the net property taxes receivable of $470,000 include amounts expected to be collected after March 15, 2020? ____________
7. Would closing budgetary accounts cause the fund balance to increase by $600,000? ____________
8. After closing entries are made, do the budgetary accounts effect the fund balance on the balance sheet? ____________
9. In the general fixed assets account group, should a credit amount be recorded for 2019 in ‘‘Investment in General Fixed Assets—Capital Projects Fund’’? ____________
10. In the general fixed assets account group, should Dell record depreciation on electric utility equipment? ____________
11. Should the capital projects fund be included in Dell’s combined statement of revenues, expenditures, and changes in fund balances? ____________
12. Should the electric utility enterprise fund be included in Dell’s combined governmental funds balance sheet? ____________
13. Should Dell report capital and related financing activities in its statement of cash flows in its debt service fund? ____________
14. Should Dell report capital and related financing activities in its statement of cash flows in its capital projects fund? ____________
15. Should Dell report capital and related financing activities in its statement of cash flows in its electric utility enterprise fund? ____________
16. What amount was recorded in the opening entry for appropriations? ____________
17. What was the total amount debited to Property Taxes Receivable? ____________
18. In the general long-term debt account group, what amount should be reported for bonds payable at December 31, 2019? ____________
19. In the general fixed assets account group, what amount should be recorded for ‘‘Investment in General Fixed Assets—Capital Projects Fund’’ at December 31, 2019? ____________
20. What was the completed cost of the civic center? ____________
21. How much was the state capital grant for the civic center? ____________
22. In the capital projects fund, what was the amount of the total encumbrances recorded during 2019? ____________
Transcribed Image Text:
Budget Actual $4,200,000 2,000,000 $4,500,000 1,500,000 Property taxes Other revenues Total revenues. $6,200,000 $6,000,000 Total expenditures . $5,700,000 $ 520,000 $5,600,000 Property taxes receivable-delinquent . Less allowance for estimated uncollectible taxesdelinquent 50,000 $ 470,000 Revenues .. 800,000 1,030,000 500,000 Other Financing Sources Bond Proceeds.... Other Financing Sources Operating Transfers-In Expenditures ... Other Financing Uses-Operating Transfers-Out 1,080,000 30,000 1,220,000 Restricted Fund Balance..
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