QUEENS’ COLLEGE DISTANCE EDUCATION DIVISION

TEL. 011-8-12-19-82

ASSIGNMENT

ON

Government & NPF Accounting Fund

Date: - _____________

Total Weight: - 30 %

Name: - ____________________________ ID NO: - ______________

Department: -_______________ Study center: -_____________ Entry year: - ___________

Program: DEGREE

This is the only assignment of this course.

This assignment is to be completed and submitted to the office of your center. Do not
attempt the assignment until you are certain that you have understood the units it covers
and have revised your self-test exercises and learning activities, and other necessary
references.

If you have any question about the units and activities, state the item/s clearly on a
separate sheet of paper and attach to your assignment paper

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 PART I: WORK OUT: SHOW YOUR STEPS CLEARLY
1. King city has budgeted the following general fund revenue and appropriations for fiscal
year 2002.
Estimated revenues:
Taxes 6,000,000
Licenses and permits 1,200,000
Fines and forfeits 400,000
Intergovernmental revenues 2,000,000
Total 9,600,000

Appropriations:
General administration 1,700,000
Police 2,000,000
Fire 2,300,000
Health and welfare 1,800,000
Public works 1,900,000
Total appropriation 9,700,000
Required:
A. Assuming a reasonably responsible level of financial management what is the
budgetary fund balance at the conclusion of the fiscal year 2001.
B. Show in general journal form to record the above entry in general ledger and
subsidiary ledger.

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Answer

1. First, we need to record the estimated revenues in the General Fund. We will debit each revenue
account and credit the Estimated Revenues account: Debit Taxes $6,000,000 Debit Licenses and
Permits $1,200,000 Debit Fines and Forfeits $400,000 Debit Intergovernmental Revenues
$2,000,000 Credit Estimated Revenues $9,600,000

Step 2/3
2. Next, we need to record the appropriations in the General Fund. We will credit each department's
account and debit the Appropriations account: Debit General Administration $1,700,000 Debit Police
$2,000,000 Debit Fire $2,300,000 Debit Health and Welfare $1,800,000 Debit Public Works
$1,900,000 Credit Appropriations $9,700,000

Step 3/3
3. Finally, we need to close the Estimated Revenues account and transfer any excess or deficiency
to the Fund Balance account. In this case, there is a deficiency of $100,000: Debit Fund Balance
$100,000 Credit Estimated Revenues $9,600,000 The final budgetary entry is: Debit Taxes
$6,000,000 Debit Licenses and Permits $1,200,000 Debit Fines and Forfeits $400,000 Debit
Intergovernmental Revenues $2,000,000 Credit Estimated Revenues $9,600,000 Debit General
Administration $1,700,000 Debit Police $2,000,000 Debit Fire $2,300,000 Debit Health and Welfare
$1,800,000 Debit Public Works $1,900,000 Credit Appropriations $9,700,000 Debit Fund Balance
$100,000 Credit Estimated Revenues $9,600,000

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 2. As of January1, 2011, the first day of the fiscal year, the city of Bahir Dar presented the
following budgeted transactions of the general fund. Estimated revenues $20,200,000;
Estimated expenditures $19,380,000; Transfer from water utility fund $1,600,000;
transfer to debt service fund anticipated $1,200,000.
Required: prepare the necessary journal entry to record the above budgets?

Answer

Estimated revenues $20,200,000;

Estimated expenditures $19,380,000
Unreserved fund balance $820,000

Due fund from water utility $1,600,000

Transfer from water utility fund $1,600,000;
Transfer to debt service fund $1,200,000.
Due to debt service fund $1,200,000.

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 3. Record the following three independent transactions
3.1. Contracts and purchase orders issued during the year 2011 include the following:
General government $900,000
Public work 1,600,000
Health and sanitation 560,000
Culture and recreation 1,000,000
Total 4,060,000
REQUIRED: Pass the journal entry to record this issuance of purchase orders and
contracts during the year 2011.
Subsidiary
Particular General ledger ledger
Debit Credit Debit Credit

Encumbrances 4,060,000
Reserve
4,060,000
for Encumbrances

General government $900,000

Public work 1,600,000
health and sanitation 560,000
Culture and recreation 1,000,000

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 3.2.. The City’s Goods and services ordered in the above transactions were received, as
follows;
Estimated Actual
General government $900,000 904,000
Public work 1,000,000 1,020,000
Health and sanitation 550,000 552,000
Culture and recreation 1,000,000 1,000,000
Total 3,450,000 3,456,000
REQUIRED: Pass the necessary journal entry to record when goods and services ordered
received or contracts entered in to are accomplished.

Particular General ledger

Actual Unreserved
Estimated
Fund
Revenues
Balance
Encumbrances 3,456,000
Reserve
3,450,000
for Encumbrances
6000
General government 904,000 900,000 4000
Public work 1020000 1000000 20000
health and sanitation 552000 550000 2000
Culture and recreation 1,000,000 1,000,000 0

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 3.3. Vouchers were issued for items not previously encumbered, primarily personal services,
in the following amounts:
General government $3,494,000
Public work 6,160,000
Health and sanitation 836,000
Culture and recreation 5,000,000
Total 15,490,000
REQUIRED: Pass the necessary journal entry such unencumbered expenditures.

Subsidiary
Particular General ledger ledger
Debit Credit Debit Credit

Encumbrances 15,490,000
Reserve
15,490,000
for Encumbrances

General government $3,494,000

Public work 6,160,000
health and sanitation 836,000
Culture and recreation 5,000,000

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 4. Arada Sub city authorized a $ 3,600, 000 building project to be financed from three
sources:
General fund transfer -------------------------------- $ 600,000
Federal Government Grant ------------------------- 2,300,000
Bond Issue --------------------------------------------- 700,000
The project is to be constructed in part by private contractors. The fiscal year ends on Sene 30.
The following transactions occurred in the first year ended Sene 30, 2002(budgetary entry is not
required):
A. The sum of $ 400,000 was borrowed in anticipation of bond issue from Commercial Bank of
Ethiopia.
B. The accrual of assets from general fund, AA City government and federal was approved.
C. Total purchase orders and other commitment issued for supplies, materials, and items of
minor equipment required for the part of the project to be performed by the town’s employees
amounted to $ 480,000.
D. A contract was let for certain work to be done by a private contractor (Sunshine
Construction) in the amount of $ 1,600,000.
E. Special engineering and miscellaneous costs that had not been encumbered were paid in the
amount of $ 80,000.
F. Progress bill for $ 720,000 was received from Sunshine Construction Company for part of the
work done.
7. Payment in full was received from general fund, and federal government that had agreed to
pay part of the cost of building.
8. The Commercial Bank of Ethiopia loan was repaid with interest amounting $ 2000. Interest is
considered CPF expenditures.
9. Total disbursements for all costs encumbered in Transaction #3 amounted to $470,000.
10. The contractor’s initial claim was verified and paid, $648,000
11. The approved bonds were sold at par.
12. Payroll of $ 160,000 was paid.
13. An order estimated to cost $ 120,000 was placed for materials.
14. Invested idle cash of Br. 600,000 in temporary investments
REQUIRED: Prepare the entry to record the above transactions in capital project fund

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Answer:

To record the above transactions in the capital project fund, make the
following entries: A. Borrowed $400,000 in anticipation of bond issue
from Commercial Bank:
Debit: Cash - Anticipation Bonds Receivable $400,000
Credit: Other Financing Sources - Anticipation Bonds Payable $400,000
B. Accrual of assets from general fund, AA City government, and
federal government:
Debit: Expenditures - Accrued Construction Costs $2,900,000
Credit: Other Financing Sources - Transfer from General Fund $600,000
Credit: Other Financing Sources - Grant Proceeds $2,300,000
C. Total purchase orders and commitments for supplies, materials, and
minor equipment:
Debit: Encumbrances $480,000
Credit: Reserves for Encumbrances $480,000
D. Contract awarded to Glory Construction:
Debit: Encumbrances $1,600,000
Credit: Reserves for Encumbrances $1,600,000
E. Payment for special engineering and miscellaneous costs:
Debit: Expenditures - Special Engineering and Miscellaneous Costs $80,000
Credit: Cash $80,000
F. Progress bill received from Glory Construction:
Debit: Expenditures - Construction in Progress $720,000
Credit: Vouchers Payable $720,000
7. Payments received from general fund and federal government:
Debit: Cash $3,600,000
Credit: Other Financing Sources - Transfer from General Fund $600,000
Credit: Other Financing Sources - Grant Proceeds $2,300,000

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Credit: Other Financing Sources - Bond Proceeds $700,000
8. Repayment of Commercial Bank loan with interest:
Debit: Other Financing Uses - Interest Expense $2,000
Debit: Other Financing Uses - Principal Repayment $400,000
Credit: Cash $402,000
9. Disbursements for encumbered costs:
Debit: Expenditures - Construction in Progress $470,000
Credit: Vouchers Payable $470,000
10. Payment for contractor's initial claim:
Debit: Expenditures - Construction in Progress $648,000
Credit: Vouchers Payable $648,000
11. Sale of approved bonds at par:
Debit: Cash $700,000
Credit: Other Financing Sources - Bond Proceeds $700,000
12. Payment of payroll:
Debit: Expenditures - Payroll $160,000
Credit: Cash $160,000
13. Placed order for materials:
Debit: Encumbrances $120,000
Credit: Reserves for Encumbrances $120,000
14. Investment of idle cash:
Debit: Investments $600,000
Credit: Cash $600,000

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