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 Bingham that occurred during the 2017 fiscal
year; the year for which the budget given in Chapter 3 was recorded. Read all instructions carefully.

DUAL-TRACK ACCOUNTING APPROACH

Governmental fund operating activities and transactions have different effects on the government-wide
financial statements and fund financial statements.

Certain activities (e.g., those relating to the General Fund budget) have no effect on the government-wide
financial statements.

Most operating activities or transactions affect both the General Fund and governmental activities at the
government-wide level, but in different ways.

Still other activities, such as recording depreciation expense or accruing interest on general long-term debt,
affect only the government-wide financial statements and are not recorded at all in the General Fund or in
any other governmental fund.

To capture the dual effects of transactions at the government-wide and governmental fund levels, this text
adopts a dual-track approach to analyzing and recording transactions based on manual accounting
procedures. Although this approach is designed to facilitate ease of learning, it also provides all the
accounting information needed to prepare both government-wide and fund financial statements.

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.

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.

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 1. [Para. 4-a-1] Property taxes were levied in the amount of $6,875,000. It is estimated that 4 percent
of the tax will be uncollectible.

Earlier, we recorded the budgeted amount of property taxes in the amount of:

This amount represents the amount the government expects to collect out of its property tax levy of
$6,875,000. It expects to collect 96% of the $6,875,000; therefore, the estimated revenue is $6,600,000.

In many states, a county official prepares bills for all taxes levied on property within the county; another
county official acts as collector of all property taxes levied for the county and all governments within the
county. Although the billing and collecting functions may be centralized, the taxes levied for each fund
must be recorded as an asset of that fund. If the accounts are to be kept in conformity with generally
accepted accounting principles, the portion of the taxes expected to be collectible (0.96 of the total levy,
in this example) must be recorded as revenues of that fund, and the portion expected to be uncollectible
(0.04 of the total levy), must be recorded in a “contra-asset” account.

Property tax revenue is classified under GASB standards as an imposed nonexchange revenue, and a
receivable should be debited when there is an enforceable claim, as in the case of a property tax levy. The
revenue should be credited in the year for which the tax was levied.

In the General Fund fund (or any fund), the revenue is recognized when measurable and available. For
property taxes, GASB specifies that available means collected within the current period or within 60 days
of year end. In this case, Bingham expects to collect the revenues within this time frame.

(If the town expected to collect a portion of the $2,600,000 later than 60 days after fiscal year-end, it should
credit that portion to Deferred Inflow of Resources—Property Taxes and reclassify it to Revenues in the
period in which the revenues are collected.)

Even if a portion of revenues is deferred in the General Fund because of the availability criterion, the full
amount is recognized as General Revenues—Property Taxes in the governmental activities journal at the
government-wide level. This is so because availability to finance current expenditures is not a revenue
recognition criterion under the accrual basis used at the government-wide level.

Required: Record this $6,875,000 transaction in both the General Fund and Government
Activities – Gov-Wide general journal using reference 4-a-1.

General Fund - General Journal

1020 Taxes Receivable - Current 6,875,000
1021 Allowance for Uncollectible Taxes 275,000
4010 Revenues 6,600,000

Gov Act, Gov-Wide - General Journal

1020 Taxes Receivable - Current 6,875,000
1021 Allowance for Uncollectible Taxes 275,000
4660 Revenues 6,600,000

NOTE: Careful referencing by paragraph number is very helpful should you need to determine
where you may have omitted a required journal entry or made an error.)

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 When you begin to input revenues, you will be taken to the detail input screen

Add entry (It will be account number 4020) and then click on the button to return to the general
journal

Post the entry

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Record the same in the Governmental Activities – Government wide general journal
Gov Act, Gov-Wide - General Journal
1020 Taxes Receivable - Current 6,875,000
1021 Allowance for Uncollectible Taxes 275,000
4660 Revenues 6,600,000

Then post the entry – Should see a check mark next in the posted box.

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 2. [Para. 4-a-2] Tax anticipation notes were issued in the amount of $500,000.
Should tax revenues be received later than needed to pay vendors on a timely basis, governments typically
issue tax anticipation notes to meet those short-term cash needs.

Tax anticipation notes are notes issued by states or municipalities to finance current operations before tax
revenues are received. When the issuer collects the taxes, the proceeds are then used to retire debt. The
interest income is exempt from federal income tax for the recipient—a treatment similar to that for
interest income from municipal bonds. Tax anticipation notes are short term notes, issued at a discount,
with a maturity period usually less than a year or a stated future date. Tax anticipation notes are used by
municipalities to bridge funding gaps.

When the 2016 post closing trial balance was recorded for the beginning of the 2017 year, the cash on
hand in the general fund (151,000) was not sufficient to pay the vouchers payable (433,400). Often
property taxes are collected twice a year and the gov must pay vendors throughout the year, therefore a
tax anticipation note is taken out to augment cash in anticipation of tax collections.

Required: Record the issuance of this note in both the General Fund and governmental activities general
journals.

General Fund - General Journal

1010 Cash 4-a-2 500,000
2020 Tax Anticipation Notes Payable 4-a-2 500,000

Gov Act, Gov-Wide - General Journal

1010 Cash 4-a-2 500,000
2020 Tax Anticipation Notes Payable 4-a-2 500,000

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 3. [Para. 4-a-3] Purchase orders, contracts, and other commitment documents were issued in the
following amounts for the following functions:

An appropriation is considered expended when the authorized liabilities have been incurred.

When a purchase order or contract has been issued, it is important to record the fact that the appropriation
has been encumbered in the amount of the purchase order or contract. The word encumbered is used,
rather than the word expended because the amount is only an estimate of the liability that will be incurred
when the purchase order is filled or the contract executed.

General Government $ 395,000

Public Safety 1,095,000
Public Works 945,750
Health and Welfare 665,725
Culture and Recreation 625,125
Miscellaneous 138,000
Total $3,864,600

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.

A journal entry is required to record the estimated cost of supplies ordered and service contracts signed.
Sound budgetary control dictates the entry. The amounts chargeable to specific appropriations of 2017 are
debited to detail accounts in the Encumbrances Subsidiary Ledger. (Recall that budgetary entries affect
only funds for which a budget is legally adopted; they have no effect at the government-wide level.)

General Fund - General Journal

7010 Encumbrances 4-a-3 3,864,600
2020 Encumbrances Outstanding 4-a-3 3,864,600

NOTE: When you enter Account 7010 to record the Encumbrances, the detail journal (Encumbrances
subsidiary ledger) screen will open up immediately. Enter each type of encumbrance here.

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Return to GJ and finish entry

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4. [Para. 4-a-4] Grant funds of $30,000 recorded as Deferred Inflow of Resources-Operating Grants and
Contributions at the end of FY 2016 were recognized as revenue when timing requirements were met.

A word about deferred inflows and outflows

Deferred outflow/inflow of resources are not assets, liabilities, revenues or expenses/expenditures.

Unlike revenues and expenses, which are inflows and outflows of resources related to the period in
which they occur, deferrals are related to future periods. They are the result of past transactions but
the recognition is deferred until the future period to which they are related. (Expense=Accrual Basis,
Expenditure=Modified Accrual Basis)

An example of a deferred inflow of resources would be resources received in a period prior to when
the resources can be used (a timing issue). Since such an advance payment does not meet the definition
of a liability (think unearned revenues), GASB standards require that it be recognized as a deferred
inflow of resources.

WHY IS IT IMPORTANT TO REPORT DEFERRALS SEPARATELY?

The GASB requires that deferred outflows of resources be reported in the financial statements apart
from assets, and deferred inflows of resources apart from liabilities. The simplest reason is that
deferrals are not assets or liabilities and not revenues or expense (expenditures), and reporting them
as such risks distorting a government’s actual financial position.

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Required: Record the revenue in both the General Fund and governmental activities general journals
by debiting Deferred Inflow of Resources-Operating Grants and Contributions and crediting Revenue.

General Fund - General Journal

2505 Deferred Inflow of Resources - Operating Grants, etc. 4-a-4 30,000
4010 Revenues 4-a-4 30,000

Gov Act, Gov-Wide - General Journal

2505 Deferred Inflow of Resources - Operating Grants, etc. 4-a-4 30,000
4645 Program Rev - Culture Recreation - Op Grants 4-a-4 30,000

NOTE: When you record the General Fund revenue in Acct 4010, the Detail Journal will populate, select
Acct 4090, Misc Revenue and record the credit. Add entry and return to GJ and post the entry.

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Next record the entry for the Gov Activities Fund and use the above account numbers. Add the
entries and post.

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5. [Para. 4-a-5] The General Fund paid $385,000 on the vouchers payable that were outstanding at
the end of FY 2016.

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

General Fund - General Journal

2010 Vouchers Payable 4-a-5 385,000
1010 Cash 4-a-5 385,000

Gov Act, Gov-Wide - General Journal

2010 Vouchers Payable 4-a-5 385,000
1010 Cash 4-a-5 385,000

Add entries for both the fund and activities general journals and post

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 6. [Para. 4-a-6] The General Fund collected the following amounts in cash:

Current year Real Property Taxes $6,364,000

Delinquent Taxes 468,000
Interest and Penalties Receivable on Taxes 23,860
Sales Taxes 748,000
Licenses and Permits 478,000
Fines and Forfeits 525,000
Intergovernmental Revenues 510,000
Charges for Services 361,000
Miscellaneous Revenues 226,500
Total $9,704,360

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.

Collections on current year receivables are a credit to Taxes Receivable- Current but any portion not
expected to be paid in the current period is classified as Taxes Receivable – Delinquent and the attendant
interest and penalties associated with the delinquent taxes would be recorded as Interest Penalties
Receivable on Taxes.

General Fund
General Fund - General Journal
1010 Cash 4-a-6 9,704,360
1020 Taxes Receivable - Current 4-a-6 6,364,000
1030 Taxes Receivable - Deliquent 4-a-6 468,000
1040 Interest Penalties Receivable on Taxes 4-a-6 23,860
4010 Revenues 4-a-6 2,848,500

NOTE: When you begin to enter revenue amounts in the Revenues control account (ACCT 4010), the detail
journal will populate. There you will record revenues by type. Select “Received in Cash” in the drop down
[Transaction Description] menu in the Detail Journal related to the General Fund revenue entries.) NOTE:
You will have to continually repopulate the transaction descrption “Received in Cash” each time.

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Add and post entries

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Governmental Activities at the Government-Wide Level
All Licenses and Permits and Charges for Services were attributable to the General Government function
as Program Revenue.

Fines and forfeits were collected by General Government departments in the amount of $200,000 and by
Public Safety departments in the amount of $325,000.

Intergovernmental Revenues should be credited to “Program Revenues—General Government—

Operating Grants and Contributions.”

Gov Act, Gov-Wide - General Journal

1010 Cash 4-a-6 9,704,360
1020 Taxes Receivable - Current 4-a-6 6,364,000
1030 Taxes Receivable - Deliquent 4-a-6 468,000
1040 Interest Penalties Receivable on Taxes 4-a-6 23,860
4670 Gen Rev - Taxes - Sales 4-a-6 748,000
4600 Program Rev - Gen Gov - Charges for Services 4-a-6 1,039,000
4610 Program Rev - Pub Safety - Charges for Services 4-a-6 325,000
4605 Program Rev - Gen Gov - Operating Grants 4-a-6 510,000
4710 Gen Rev - Miscellaneous 4-a-6 226,500

Add and post entries

If you have a number input error, you can always right click on the entry and modify it to the correct amount.

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 7. [Para. 4-a-7] The General Fund paid the $14,300 reported as Due to Other Funds at the end of FY
2016. This amount was reported as Internal Payables to Business-type Activities at the
government-wide level.

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

General Fund - General Journal

2030 Due to Other Funds 4-a-7 14,300
1010 Cash 4-a-7 14,300

Gov Act, Gov-Wide - General Journal

2420 Internal Payables to Bus Type Activities 4-a-7 14,300
1010 Cash 4-a-7 14,300

Add and post entries

8. [Para. 4-a-8] Delinquent taxes receivable in the amount of $26,000 were written off as
uncollectible. Interest and penalties accrued on these taxes in the amount of $1,300 were also
written off.

Write-off of Uncollectible Delinquent Taxes. Officers of a government review aged trial balances of taxes
receivable and other receivables. Although the levy of property taxes creates a lien against the underlying
property in the amount of the tax, accumulated taxes may exceed the market value of the property, or, in
the case of personal property, the property may have been removed from the jurisdiction of the
government. When delinquent taxes are deemed uncollectible, the related interest and penalties must
also be written off.

General Fund - General Journal

1031 Allowance for Uncollectible Delqnt Taxes 4-a-8 26,000
1030 Taxes Receivable - Delinquent 4-a-8 26,000
1041 Allowance for Uncollectible Int and Penalties 4-a-8 1,300
1040 Int and Penalties Receivable on Taxes 4-a-8 1,300

Gov Act, Gov-Wide - General Journal

1031 Allowance for Uncollectible Delqnt Taxes 4-a-8 26,000
1030 Taxes Receivable - Delinquent 4-a-8 26,000
1041 Allowance for Uncollectible Int and Penalties 4-a-8 1,300
1040 Int and Penalties Receivable on Taxes 4-a-8 1,300

Required: Record the writeoffs in both the General Fund and governmental activities general journals and
post

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 9. [Para. 4-a-9] General Fund payrolls for the year totaled $5,083,038. Of that amount, $772,395 was
withheld for employees' federal income taxes; $860,456 for federal payroll taxes; $290,798 for
employees’ state income taxes; $320,152 for retirement funds administered by the state
government; and the remaining $2,839,237 was paid to employees in cash. The City of Bingham
does not record encumbrances for payrolls. The payrolls were chargeable against the following
functions’ appropriations:

General Government $ 1,300,376

Public Safety 2,331,644
Public Works 790,481
Health and Welfare 311,673
Culture and Recreation 348,864
Total $5,083,038

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

General Fund. The gross pay is chargeable to the appropriations in the General Fund as indicated by the
Expenditures Ledger debits. Only the portions due to the federal and state governments is segregated as
an amount due.

General Fund - General Journal

6010 Expenditures 4-a-9 5,083,038
2040 Due to Federal Government 4-a-9 1,632,851
2050 Due to State Government 4-a-9 610,950
1010 Cash 4-a-9 2,839,237

NOTE: When you begin to enter the amount in ACCT 6010 Expenditures, the detail journal will open.
Record the expenditures by functions there.

After posting, return to general journal, complete the remainder of the entry and post.

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Gov Activities - Government-Wide Level.

Record and post

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 10. [Para. 4-a-10] Invoices for some of goods and services ordered in transaction 4-a-3 were received
and vouchered for later payment. (Select “Elimination” in the drop down [Transaction Description]
menu in the Detail Journal):

Actual Estimated
General Government $ 395,940 $ 394,060
Public Safety 1,086,650 1,088,600
Public Works 922,300 927,620
Health and Welfare 661,200 663,600
Culture and Recreation 593,750 597,000
Miscellaneous 138,000 138,000
Totals $3,797,840 $3,808,880

Encumbrances and Purchasing Transactions

When supplies and services ordered during the current year have been received and found to be
acceptable, the billing documents are approved for payment. The estimated liability for each order was
previously recorded in the Encumbrances control account in the general ledger, as well as in subsidiary
Encumbrance Ledger accounts, entries must be made to reverse the encumbrances entries for the
originally estimated amounts. In addition, entries are required to record the actual charges in the
Expenditures control account and subsidiary Expenditures Ledger accounts. Expenses and/or assets must
also be recorded in governmental activities accounts at the government-wide level, as appropriate.

General Fund
General Fund - General Journal
2600 Encumbrances Outstanding 4-a-9 3,808,880
7010 Encumbrances 4-a-9 3,808,880
6010 Expenditures 4-a-9 3,797,840
2010 Vouchers Payable 4-a-9 3,797,840

Note: Use of ACCT 7010 will open the detail journal for encumbrances where you will enter the estimated
amounts by function. Use of ACCT 6010 will open the detail journal for expenditures where you will enter
the actual amounts by function and use goods received in the pull down menu. (You will have to populate
the goods received in the pull down menu each time you enter the expenditure).

Gov Wide
Assume the city uses the periodic inventory method. The invoiced amounts above should be recorded as
expenses of the appropriate functions, except for $72,500 of playground equipment ordered by Culture
and Recreation. The equipment meets the city’s threshold for capitalization (debit Equipment for this item
at the government-wide level). The amount attributable to Culture and Recreation is $72,500 for the
equipment and $521,250 for expenses totaling to $593,750

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11. [Para. 4-a-11] The General Fund paid vouchers during the year in the amount of $3,200,000 as well
as its liabilities for employees’ federal and state income taxes withheld and payroll taxes.

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

General Fund - General Journal

2010 Vouchers Payable 4-a-11 3,200,000
1010 Cash 4-a-11 3,200,000
2040 Due to Federal Government 4-a-11 1,632,851
2050 Due to State Government 4-a-11 610,950
1010 Cash 4-a-11 2,243,801

Gov Act, Gov-Wide - General Journal

2010 Vouchers Payable 4-a-11 3,200,000
1010 Cash 4-a-11 3,200,000
2040 Due to Federal Government 4-a-11 1,632,851
2050 Due to State Government 4-a-11 610,950
1010 Cash 4-a-11 2,243,801

12. [Para. 4-a-12] The General Fund transferred $50,000 to the debt service fund so the debt service
fund could make a bond interest payment.

Required: Record this transaction in the General Fund only. The transaction has no effect at the
government-wide level since it occurs between two governmental activities. (Do not record this
transaction in the debt service fund until instructed to do so in Chapter 6 of this case.)

General Fund - General Journal

6160 Other Fin Uses - Interfund Transfers Out 4-a-12 50,000
1010 Cash 4-a-12 50,000

13. [Para. 4-a-13] Tax anticipation notes issued by the General Fund were paid at maturity at the face
amount plus interest of $10,000.

Required: Record the payment of these items in both the General Fund and governmental
activities general journals. Gen Fund - USE of ACCT 6010 will open Detail journal, charge
Miscellaneous for the interest expenditure. Select Util and Other from the pull down menu as the
description

General Fund - General Journal

6010 Expenditures 4-a-13 10,000
2020 Tax Anticipation Notes Payable 4-a-13 500,000
1010 Cash 4-a-13 510,000

Gov Act, Gov-Wide - General Journal

2020 Tax Anticipation Notes Payable 4-a-13 500,000
6680 Expenses - Int on Tax Anticipation Notes 4-a-13 3,200,000
1010 Cash 4-a-13 510,000

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14. [Para. 4-a-14] Liabilities of $50,000 to other funds for services is related to the Water Utility Fund
during the year. Of this amount, $39,000 should be charged to Public Safety and $11,000 to General
Government.

Gen Fund - USE of ACCT 6010 will open detail journal; record by function and use Utilities and
Other in the pull down menu.

General Fund - General Journal

6010 Expenditures 4-a-14 50,000
2030 Due to Other Funds 4-a-14 50,000

Gov Wide - At the government-wide level the liability should be credited to Internal Payables to
Business-type Activities. Do not record these items in the Water Utility Fund until instructed to
do so in Chapter 7 of this case.

Gov Act, Gov-Wide - General Journal

6610 Expenses - Public Safety 4-a-14 39,000
6600 Expenses - General Govt 4-a-14 11,000
2420 Internal Payables to Business-Type Activities 4-a-14 50,000

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 15. [Para. 4-a-15] The balances in the current taxes receivable and related estimated uncollectibles
accounts were reclassified as delinquent. Interest and penalties of $56,580 were recorded on the
delinquent taxes, of which $10,500 was estimated to be uncollectible.

Gen Fund – Use of Revenues will trigger Detail Journal. Record as Property Taxes and Description is Accrued
Revenue.

General Fund - General Journal

1030 Taxes Receivable - Delinquent 4-a-15 511,000
1020 Taxes Receivable - Current 4-a-15 511,000
1021 Allowances for Uncoll Current Taxes 4-a-15 275,000
1031 Allowances for Uncoll Delinquent Taxes 4-a-15 275,000
1040 Interest and Penalties Receivable on Taxes 4-a-15 56,580
1041 Allowance for Uncoll Interest and Penalties 4-a-15 10,500
4010 Revenues 4-a-15 46,080

Gov Act, Gov-Wide - General Journal

1030 Taxes Receivable - Delinquent 4-a-15 511,000
1020 Taxes Receivable - Current 4-a-15 511,000
1021 Allowances for Uncoll Current Taxes 4-a-15 275,000
1031 Allowances for Uncoll Delinquent Taxes 4-a-15 275,000
1040 Interest and Penalties Receivable on Taxes 4-a-15 56,580
1041 Allowance for Uncoll Interest and Penalties 4-a-15 10,500
4690 General Rev - Interest and Penalties on Taxes 4-a-15

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16. [Para. 4 a-16] In view of unexpected revenue and expenditure developments the city council
revised the budgets for the current year as shown below:

Budget Adjustments
Estimated Revenues:
Intergovernmental Revenue $ 15,000 decrease
Fines and Forfeits 15,000 increase
Miscellaneous Revenue 31,500 increase

Appropriations:
Public Safety $ 20,000 decrease
Health and Welfare 10,000 increase
Miscellaneous 50,000 decrease

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.)

General Fund - General Journal

3010 Estimated Revenues 4-a-16 31,500
5010 Appropriations 4-a-16 60,000
2560 Budgetary Fund Balance 4-a-16 91,500

Estimated Revenues will trigger detail journal. Use property taxes and budget amendment.
Appropriations will trigger detail journal. Use general gov and budget amendment.

Show Your Work - Due Jun 15

Select General Fund and Gov-Wide, Reports, General Ledger, Print both and Submit to me in class or
drop off to Accounting Office to be placed in my mail box on the due date. Reports will be 4 pages in
total. Do not email to me.

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 17. [Closing Entry] for General Fund.

Background:
Following the instructions in the next paragraph, prepare and post the entries to close the Gen Fund
You will be given the closing entry for this project as well as the Smithville project

1. Close the budget

2. Close the revenues, expenditures, etc. to unassigned fund balance
3. Close other financing uses – interfund transfers out to unassigned fund balance
4. Recording fund constraints

At year-end, an analysis by the city’s finance department determined the following constraints on
resources in the General Fund. Prepare the appropriate journal entry in the General Fund to reclassify
amounts between Fund Balance—Unassigned and the fund balance accounts corresponding to the
constraints shown below. The ending balances will be

Account Amount
Fund Balance—Assigned—Culture and Recreation $57,650
Fund Balance—Assigned— Health and Welfare 25,000
Fund Balance—Committed—Public Safety 12,300
Fund Balance—Committed—Public Works 33,790

Note: WE WILL 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.

Recording the Closing Entries:

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, with the exception of Estimated Other Financing Uses—Interfund Transfers Out and Other Financing
Uses—Interfund Transfers Out, 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 should first
print the pre-closing version of these ledgers for year 2017 from the [Reports] menu. Given below

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 1. Closing the Budget

CLOSING ENTRY - BINGHAM

General Fund - General Journal

Closing the Budget

5010 Appropriations Closing 9,000,000
3010 Estimated Revenues Closing 9,528,500
5160 Estimated Other Fin Uses - Interfund Transfers Out Closing 50,000
2560 Budgetary Fund Balance Closing 478,500

Before you begin to record the closing entry, make sure closing entry is checked. Debit appropriation
functions as follows in the detail journal.

Appropriations
General Gov 1,650,000
Public Safety 3,485,000
Public Works 1,735,000
Health and Welfare 965,000
Culture and Recreation 970,000
Misc 195,000

9,000,000

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2. Closing the Revenue, Expenditures, etc. Accounts

CLOSING ENTRY - BINGHAM

General Fund - General Journal

Closing the Rev, Expenditures, etc. Accounts

4010 Revenues Closing 9,524,580 Debit revenues to close
6010 Expenditures Closing 8,940,878 Credit expenses to close
2550 Fund Bal - Unassigned Closing 583,702 Remainder closes to fund bal

Revenues
Property Taxes 6,646,080
Sales Taxes 748,000
Interest and Penalties
Licenses and Permits 478,000
Fines and Forfeits 525,000
Intergovernmental 510,000
Charges for Services 361,000
Misc Rev 256,500

9,524,580

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 3. Close other financing uses – interfund transfers out to unassigned fund balance

CLOSING ENTRY - BINGHAM

General Fund - General Journal
Closing the Other Fin Uses - Interfund Transfer Out

2550 Fund Bal - Unassigned Closing 50,000

6160 Other Financing Uses - Interfund Transfers Out Closing 50,000

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Illustration of all accounts closed. Note Because the City of Bingham 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.

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4. Recording fund constraints

CLOSING ENTRY - BINGHAM

General Fund - General Journal
Recording Resource Constraints

2543 Fund Bal Assigned - Health and Welfare Closing 8,616

2531 Fund Bal Committed - Public Safety Closing 4,420
2532 Fund Bal Commited - Public Works Closing 2,660
2544 Fund Bal Assigned - Culture and Recreation Closing 57,650
2550 Fund Bal - Unassigned Closing 47,274

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b. Print the General Fund Post Closing Trial Balance and review the following financial statements. You
will prepare these financial statements for the Smithville Project. Hand in your General Fund Post
Closing Trial Balance or deliver to my mailbox by the due date. Do not email me your post-closing trial
balance.

Before closing the City of Bingham, 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.

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