Question

Prepare journal entries for the City of Pudding’s governmental funds to record the following transactions, first for fund financial statements and then for government-wide financial statements.

a.A new truck for the sanitation department was ordered at a cost of $94,000.

b.The city print shop did $1,200 worth of work for the school system (but has not yet been paid).

c.An $11 million bond was issued to build a new road.

d.Cash of $140,000 is transferred from the general fund to provide permanent financing for a municipal swimming pool that will be viewed as an enterprise fund.

e.The truck ordered in (a) is received at an actual cost of $96,000. Payment is not made at this time.

f.Cash of $32,000 is transferred from the general fund to the capital projects fund.

g.A state grant of $30,000 is received that must be spent to promote recycling.

h.The first $5,000 of the state grant received in (g) is appropriately expended.

Answer 1

Transactions	General Journal	Debit	Credit
a	Encumbrances - Truck	94000
	Encumbrances Outstanding		94000
b	Expenditures (or Supplies)	1200
	Due to Internal Service Fund		1200
c	Cash	11000000
	Other Financing Sources—Bonds Proceeds		11000000
d	Other Financing Uses—Transfers Out— Swimming Pool	140000
	Cash		140000
e	Encumbrances Outstanding	94000
	Encumbrances - Truck		94000
	Expenditures - Truck	96000
	Vouchers Payable		96000
f	Other Financing Uses—Transfers Out	32000
	Cash		32000
	Cash	32000
	Other Financing Sources—Transfers In		32000
g	Cash	30000
	Unearned Grant Revenue		30000
h	Unearned Grant Revenue	5000
	Revenues		5000