government and non profit 403040

10. Journal Entries. Prepare the journal entries necessary in the fund based and government wide journals to record each of the following transactions. Be sure to indicate to which fund your entry(ies) apply in the fund based journal and the type of activity (GT = governmental type activities, BT = business type activities) in the government wide journal. Additionally, if the entry is the same at the government wide level, indicate this with “SAME” and if no entry applies then indicate with “NE”. If a transaction results in multiple entries, YOU SHOULD INDICATE CLEARLY WHETHER EACH ENTRY IS CHANGED, THE SAME, OR RESULTS IN NO ENTRY. (5 points each) (1) During January, property owners were billed for $3,000,000 in property taxes for the current tax years’ levy. Of this amount, 4% is estimated to be uncollectible. (2) The General Fund transferred $100,000 to the Motor Pool Internal Service Fund to be used for general operating purposes. (3) The General Fund received a $2000 water bill from the city’s Water Utility Fund and immediately paid it. (4) The city purchased new computer equipment costing $19,000 by paying $3,000 in cash and signing a long term note payable for $16,000. (5) The following were collected in cash: Current taxes of 400,000, delinquent taxes of 11,000, other revenues of 10,000 from a number of sources. (6) Total payroll was 500,000. Of that amount, the following were withheld: 18,000 for employees’ FICA liability; 60,000 for employees’ federal income tax liability; and 20,000 for state tax. The balance was paid in cash. (7). On July 1, 20×4, Brook City established an appropriate fund to handle the transactions involving the construction of a new city hall. The city approved a $3,000,000, 6 percent, ten year general obligation serial bond issue to finance the project on July 15, 20×4. The bonds were sold for $3,136,696 on August 1, 20×4, with interest (6%) and principal ($300,000) payments beginning August 1, 20×5. The premium will be used to offset the bond principal and interest payment. [Note: You are to make only the August 1, 20×4 entr(ies). The premium is transferred to debt service fund. Effective interest rate is about 5%.] (8). On August 5, 20×4, the city signed a construction contract for the city hall to be built by SteelBuild Construction Co. in the amount of $3,000,000. (9). On February 16, 20×5, the contractor’s bill for $750,000 was received based on certification that the work was one fourth completed. The contractor was paid for one fourth of the contract less a 6% percent retained percentage to ensure performance. (10). On July 6, 20×5, the General Fund transferred $480,000 to the fund responsible for servicing the serial bonds which will be used with the premium to pay for the first interest and principal payment in August. (11). Interest (6% of face value) and principal (1/10 of face value) on the serial bonds was paid on August 1, 20×5. Premium amortization (if necessary) amounts to $23,165. (12). The City of Commerce signs a capital lease for the purchase of machinery on January 1, 20×6. The terms of the lease state that the City will make a $2,000 payment on January 1, 20×6 and equal payments of $2,000 for each January 1 for the next five years, beginning January 1, 20×7. The normal borrowing rate for the City of Commerce is 5%. The 2,000 payment is made on January 1, 20×6.