The County of Maxnell decides to create a sanitation department and offer its services to the public for a fee. As a result, county officials plan to account for this activity within the enterprise funds. Prepare journal entries for this operation for the following 2017 transactions as well as necessary adjusting entries at the end of the year. Assume the information is being gathered to prepare fund financial statements. Only entries for the sanitation department are required here:
January 1 Received unrestricted funds of $227,000 from the general fund as permanent financing. Febrauary 1 Borrowed an additional $180,000 from a local bank at a 12 percent annual interest rate. March 1 Ordered a truck at an expected cost of $115,000. April 1 Received the truck and made full payment. The actual cost amounted to $117,000. The truck has a 10-year life and no salvage value. Straight-line depreciation is to be used. May 1 Received a $27,700 cash grant from the state to help supplement the pay of the sanitation workers. The money must be used for that purpose. June 1 Rented a garage for the truck at a cost of $2,200 per month and paid 12 months of rent in advance. July 1 Charged citizens $19,000 for services. Of this amount, $15,400 has been collected. August 1 Made a $13,000 cash payment on the 12 percent note of February 1. This payment covers both interest and principal. September 1 Paid salaries of $25,500 using the grant received on May 1. October 1 Paid truck maintenance costs of $2,000. November 1 Paid additional salaries of $19,500, first using the rest of the grant money received May 1. December 31 Sent invoices totaling $20,400 to customers for services over the past six months. Collected $5,200 cash immediately. December 31 A new landfill was opened this year. It is 12 percent filled as of the end of the year. The estimated current cost for the eventual closure of this facility is $2.1 million although no payments will be made for approximately 9 years.
a) Record the accrual of interest expense - Enterprise fund.
b) Record the expense for landfill closure and liability.
The County of Maxnell decides to create a sanitation department and offer its services to the public for a fee. As a result, county officials plan to account for this activity within the enterprise funds. Prepare journal entries for this operation for the following 2017 transactions as well as necessary adjusting entries at the end of the year. Assume the information is being gathered to prepare fund financial statements. Only entries for the sanitation department are required here:
| January | 1 | Received unrestricted funds of $227,000 from the general fund as permanent financing. | |
| Febrauary | 1 | Borrowed an additional $180,000 from a local bank at a 12 percent annual interest rate. | |
| March | 1 | Ordered a truck at an expected cost of $115,000. | |
| April | 1 | Received the truck and made full payment. The actual cost amounted to $117,000. The truck has a 10-year life and no salvage value. Straight-line depreciation is to be used. | |
| May | 1 | Received a $27,700 cash grant from the state to help supplement the pay of the sanitation workers. The money must be used for that purpose. | |
| June | 1 | Rented a garage for the truck at a cost of $2,200 per month and paid 12 months of rent in advance. | |
| July | 1 | Charged citizens $19,000 for services. Of this amount, $15,400 has been collected. | |
| August | 1 | Made a $13,000 cash payment on the 12 percent note of February 1. This payment covers both interest and principal. | |
| September | 1 | Paid salaries of $25,500 using the grant received on May 1. | |
| October | 1 | Paid truck maintenance costs of $2,000. | |
| November | 1 | Paid additional salaries of $19,500, first using the rest of the grant money received May 1. | |
| December | 31 | Sent invoices totaling $20,400 to customers for services over the past six months. Collected $5,200 cash immediately. | |
| December | 31 | A new landfill was opened this year. It is 12 percent filled as of the end of the year. The estimated current cost for the eventual closure of this facility is $2.1 million although no payments will be made for approximately 9 years. |
a) Record the accrual of interest expense - Enterprise fund.
b) Record the expense for landfill closure and liability.
Related questions
Granite City has a fiscal year that begins on July 1, 2015 andends on June 30, 2016. The following budget became effective forthe fiscal year:
Taxes, $6,700,000
License and permits $300,000
Fines and Forfeits, $100,000
Intergovernmental Revenues, $500,000
Issuance of bonds for $2,200,000
Transfer to Other Funds for $350,000
Total Appropriations, $9,200,000.
What is the General Fund budget adoption transaction that shouldbe recorded (use control accounts)? (3 points)
On October 10, 2015, Granite City received notification that itwould receive a $175,000 state grant to help fund the purchase of anew fire truck. The city did not anticipate receiving the grant andas a result, the grant was not included in the budget when adopted.However, the capital budget for the city did include an anticipatedexpenditure for the new fire truck for $350,000. Recordthe budget amendment transaction only. (.7 points)
On November 1, 2015, Granite City placed a purchase order forthe new fire truck at a quoted a price of $350,000. (.7points)
On December 15, the fire truck was delivered and the city wasinvoiced for $349,000. (1.6 points)
On December 20, the city paid for the fire truck. (.7points)
On January 21, 2016, the police department had an unplannedexpenditure in the amount of $32,000 for water damage from a burstwater pipe. To provide budgetary authorization for thisexpenditure, the city council voted to transfer a portion of theunexpended appropriation for building repairs from Culture andRecreation to Public Safety. What journal entry would be recorded?(.7 points)
Granite City has a fiscal year that begins on July 1, 2015 andends on June 30, 2016. Assume that at year-end encumbrancesoutstanding for normal purchasing activities totaled $25,000. Whattwo entries are recorded on June 30,2016, when the city elects to disclose the intendedacquisition on the balance sheet? (1.6points)
What closing entry is required regarding only the budgetadoption transaction? (3 points)
What two entries are recorded on July 1, 2016?(1 point)
