finance- The Town of Richmond approved a General Fund operating budget

QUESTION

1. The Town of Richmond approved a General Fund operating budget for the fiscal year ending June 30, 2016. The budget provides for estimated revenues of $2,700,000 as follows: property taxes, $1,900,000; licenses and permits, $350,000; fines and forfeits, $250,000; and intergovernmental (state grants),$200,000. The budget approved appropriations of $2,650,000 as follows: General Government, $500,000; Public Safety, $1,600,000; Public Works, $350,000; Parks and Recreation, $150,000; and Miscellaneous, $50,000.Instructions a. Prepare the journal entry (or entries), including subsidiary ledger entries, to record the Town of Richmond’s General Fund operating budget on July 1, 2015, the beginning of the Town’s 2016 fiscal year.b. Prepare journal entries to record the following transactions that occurred during the month of July 2015.i. Revenues were collected in cash amounting to $31,000 for licenses and permits and $12,000 for fines and forfeits.ii. Supplies were ordered by the following functions in early July 2015 at the estimated costs shown:General Government $ 7,400Public Safety 11,300Public Works 6,100Parks and Recreation 4,200Miscellaneous 900Total $29,900iii. During July 2015, supplies were received at the actual costs shown below and were paid in cash. General Government, Parks and Recreation, and Miscellaneous received all supplies ordered. Public Safety and Public Works received part of the supplies ordered earlier in the month at estimated costs of $10,700 and $5,900, respectively.Actual Cost Estimated CostGeneral Government $ 7,300 $ 7,400Public Safety 10,800 10,700Public Works 6,100 5,900Parks and Recreation 4,100 4,200Miscellaneous 900 900Total $29,200 $29,100c. Calculate and show in good form the amount of budgeted but unrealized revenues in total and from each source as of July 31, 2015.d. Calculate and show in good form the amount of available appropriation in total and for each function as of July 31, 2015.2. Walton, great-granddaughter of the founder of the Town of Walton, made cash contribution in the amount of $500,000 to be held as an endowment. To account for this endowment, the town has created the Samuel Walton Park Endowment Fund. Under terms of the agreement, the town must invest and conserve the principal amount of the contribution in perpetuity. Earnings, measured on the accrual basis, must be used to maintain Samuel Walton Park in an “attractive manner.” All changes in fair value are treated as adjustments of fund balance of the permanent fund and do not affect earnings.Earnings are transferred periodically to the Samuel Walton Park Maintenance Fund, a special revenue fund. Information pertaining to transactions of the endowment and special revenue funds for the fiscal year ended June 30, 2016, follows:a. The contribution of $500,000 was received and recorded on December 31, 2015.b. On December 31, 2015, bonds having a face value of $400,000 were purchased for $406,300, plus three months of accrued interest of $6,000. A certificate of deposit with a face and fair value of $70,000 was also purchased on this date. The bonds mature on October 1, 2022 (105 months from date of purchase), and pay interest of 6 percent per annum semiannually on April 1 and October 1. The certificate of deposit pays interest of 4 percent per annum payable on March 31, June 30, September 30, and December 31.c. On March 31, 2016, interest on the certificate of deposit was received by the endowment fund and transferred to the Samuel Walton Park Maintenance Fund.d. The April 1, 2016, bond interest was received by te endowment fund and transferred to the Samuel Walton Park Maintenance Fund.e. On June 30, 2016, interest on the certificate of deposit was received and transferred to the Samuel Walton Park Maintenance Fund.f. On June 30, 2016, the market value of the bonds was $409,600. The value of the certificate of deposit was unchanged.Instructionsa. Prepare in general journal form the entries required in the Samuel Walton Park Endowment Fund to record the transactions occurring during the fiscal year ending June 30, 2016, including all appropriate adjusting and closing entries. (Note: Ignore related entries in the governmental activities journal at the government-wide level and the Park Maintenance Fund.)b. Prepare the following financial statements:(i) A balance sheet for the Samuel Walton Park Endowment Fund as of June 30, 2016.(ii) A statement of revenues, expenditures, and changes in fund balance for the Samuel Walton Park Endowment Fund for the year ended June 30, 2016.

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