Practice Question

Question One

The 2011 budget for Borama’s debt service fund is as follows:

Estimated revenues and other financing sources:

Est. other financing sources operating transfers in (from general fund) $22,000

Estimated revenues – earnings 2,200

Total estimated revenues and other financing sources

$24,000

Appropriations:

Interest payments $1,800

Investment fees 200

$2,000

Excess of est. revenues and other financing sources over appropriations

$22,000

1. The budget for 2011 was recorded

2. The general fund transfers cash of $22,000 to the debt service fund, as required
by the bond indenture, and the entire amount is invested in securities.
3. Securities with a cost of $15,000 are sold for $16,500, which includes $1,500
interest of which $650 was accrued at December 31, 2011; $5,700 is re-invested
in other securities.
4. Interest earned and uncollected at December 31, 1996, is $400.
5. The capital project fund transferred, $14,200 to the debt service fund.
6. The accounts were closed during 2011

Instruction: Prepare the Journal Entries for Borama City?

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 Practice Question

Question Two

1. Assume that Lasanod City collects property taxes for its own purpose as well as
for the towns of Caynabo and the total property tax levy for 2017 are as follows:

Lasanod City 180,000 78.30%

Caynabo City 50,000 21.70%

Totals $230,000 100%

2. $80,000 of the tax levy is collected during the 1st quarter of 2017.
3. Erigavo City charges to Saraar City a fee of 4 percent of taxes collected.
4. Taxes collected were distributed to the respective governmental units.
5. Each city received its revenue in cash.

Required: Prepare respective Journal entries for Lasanod and Caynabo

Cities?

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