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General Fund Exercises

The document outlines various exercises related to journal entries and transactions for the General Fund and Special Revenue Funds of the city of Springfield. It includes exercises on budget approvals, property tax levies, expenditure recognition, inter-fund transfers, and grant management, among others. Additionally, it covers comprehensive exercises that require recording transactions and preparing closing entries for multiple funds over several years.

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dagicoffee24
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8 views

General Fund Exercises

The document outlines various exercises related to journal entries and transactions for the General Fund and Special Revenue Funds of the city of Springfield. It includes exercises on budget approvals, property tax levies, expenditure recognition, inter-fund transfers, and grant management, among others. Additionally, it covers comprehensive exercises that require recording transactions and preparing closing entries for multiple funds over several years.

Uploaded by

dagicoffee24
Copyright
© © All Rights Reserved
Available Formats
Download as DOCX, PDF, TXT or read online on Scribd
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General Fund Exercises

Exercise 1: Journal Entries for General Fund

The city of Springfield has the following transactions during the year. Prepare the journal entries
for the General Fund:

1. The city council approves a budget estimating revenues of $500,000 and appropriations
of $450,000.
2. Property taxes of $480,000 are levied, of which $460,000 are expected to be collected.
3. The city collects $300,000 in property taxes.
4. The city pays $200,000 in salaries.
5. Supplies worth $50,000 are ordered but not yet received.

Exercise 2: Budget Adjustments

The city council realizes mid-year that revenue estimates need to be revised downward to
$470,000, and appropriations need to be increased by $30,000. Record the budget amendment in
the General Fund.

Special Revenue Fund Exercises

Exercise 3: Transactions in a Special Revenue Fund

The Parks and Recreation Special Revenue Fund receives a $150,000 state grant to improve
local parks. Record the following transactions:

1. The grant is received in cash.


2. Equipment worth $50,000 is purchased for the parks.
3. Contracts for $80,000 worth of park improvements are signed but not yet paid.
4. $10,000 is spent on park employee training.

Exercise 4: Inter fund Transfers

The General Fund transfers $20,000 to the Special Revenue Fund to support an after-school
program. Record the transactions in both funds.

Comprehensive Exercise

1. The General Fund collects $100,000 in sales tax, of which $30,000 is legally restricted to
road maintenance and transferred to a Special Revenue Fund.
2. The Special Revenue Fund spends $20,000 on road repairs and $5,000 on administrative
expenses.
3. At year-end, $5,000 of the transferred funds remain unspent.
General Fund Exercises

Exercise 5: Property Tax Revenue

1. The city levies property taxes of $1,000,000, with $950,000 expected to be collectible.
Record the levy and the allowance for uncollectible amounts.
2. During the year, the city collects $800,000 in property taxes. Record the collection.
3. At year-end, $100,000 of the uncollected taxes are reclassified as delinquent. Record the
entry.

Exercise 6: Expenditure Recognition

The city approves the following expenditures:

1. $250,000 for police services, of which $240,000 is spent during the year.
2. $100,000 for fire department equipment, which is ordered but not received before year-
end.
3. $60,000 for public works, with $55,000 paid and $5,000 remaining as accounts payable
at year-end.

Exercise 7: Inter fund Loans

The General Fund loans $50,000 to the Capital Projects Fund to cover short-term cash flow
needs. Record the transactions in both funds, including repayment of the loan within the year.

Special Revenue Fund Exercises

Exercise 8: Restricted Grants

1. The state awards a $200,000 grant to the Public Health Special Revenue Fund for
disease prevention programs. The grant is received in full.
2. $120,000 is spent on hiring public health educators and purchasing supplies.
3. The unspent $80,000 is returned to the state, as required by the grant terms. Record all
transactions.

Exercise 9: Dedicated Tax Revenue

The Road Maintenance Special Revenue Fund is supported by a dedicated fuel tax. Record the
following:

1. $300,000 in fuel tax revenue is collected and deposited into the fund.
2. $150,000 is spent on paving materials.
3. A $50,000 contract for road repairs is signed but not yet executed by year-end.
Mixed Exercises

Exercise 10: Combining General and Special Revenue Funds

A city's General Fund provides services partly funded by a Special Revenue Fund dedicated to
education:

1. The Education Special Revenue Fund receives $500,000 in state grants, $100,000 in
donations, and transfers $50,000 to the General Fund to cover administrative expenses.
2. The Special Revenue Fund spends $400,000 on educational programs and purchases
$30,000 in textbooks.
3. At year-end, $220,000 remains unspent and is restricted for future use.

Exercise 11: Revenue and Expenditure Cycle

1. The city council adopts a budget for the General Fund: estimated revenues of $2,000,000
and appropriations of $1,800,000.
2. $1,900,000 in property taxes and licenses are collected.
3. Expenditures for the year include salaries of $1,200,000, materials of $400,000, and a
transfer of $50,000 to the Public Safety Special Revenue Fund.
4. The Public Safety Special Revenue Fund spends $30,000 on emergency supplies.

Case Study Exercise

Comprehensive City Budget and Fund Transactions

1. The city establishes the following funds:


o General Fund for general operations.
o Parks and Recreation Special Revenue Fund for park maintenance.
o Public Health Special Revenue Fund for health programs.
2. Budgeted revenues and appropriations are as follows:
o General Fund: $1,000,000 in revenues and $900,000 in expenditures.
o Parks and Recreation Fund: $200,000 in revenues and $150,000 in expenditures.
o Public Health Fund: $300,000 in revenues and $250,000 in expenditures.
3. During the year:
o The General Fund collects $980,000 in taxes and licenses.
o The Parks and Recreation Fund receives $190,000 in donations.
o The Public Health Fund earns $310,000 in grants and donations but spends only
$220,000.
Exercise 12: Multi-Year Special Revenue Fund Transactions

The Environmental Conservation Special Revenue Fund is established to manage a federal


grant for water conservation projects. The grant spans three years. Record the following
transactions:

1. In Year 1, the fund receives $500,000 in grant money. It spends $200,000 on equipment
and $50,000 on educational programs.
2. In Year 2, the fund receives another $300,000 from the grant. It spends $250,000 on
waterway restoration and signs a $100,000 contract for future consulting services.
3. In Year 3, the fund receives the final $200,000 from the grant. It pays $100,000 for
consulting services and returns $50,000 of unspent funds to the federal government, as
required by grant terms.
4. At the end of Year 3, the remaining funds are closed out.

Record journal entries for all funds and prepare closing entries for
year-end.

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