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Prepare the appropriate journal entries in the general fund

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solution


Question

During the year the City of Hamburg engaged in the following transactions. The city uses the consumption method of recording inventories and prepayments. The city has a 6/30 fiscal year end. REQUIRED: Record the following transactions related to supplies, prepaid items and fixed asset acquisitions.;a. During the year the city purchased $600,000 of expendable supplies.;b. On September 1 the city paid $360,000 for a three-year insurance policy to cover some assets used in general government activities.;c. On December 1 the city purchased four pickup trucks for general government activities. The trucks cost $100,000 in total.;d. On January 1 the city leased some office equipment for use in the administrative offices. The lease qualified as a capital lease. The present value of the minimum lease payments is $96,000.;e. On April 1 the city leased a copying machine. The lease qualified as an operating lease. The terms of the lease require yearly payments of $2,000 each April 1 for 5 years. The city prepaid the entire five years of the lease.;Chapter 7;The City of Baconsville engaged in the following transactions. Assume that the city maintains its books and records in a manner that facilitates the preparation of fund financial statements. Prepare the appropriate journal entries in the general fund. If appropriate, write ?No entry required.?;a) The city purchased for cash three dump trucks for $80,000 each.;b) The city sold for $4,000 a police car that had been purchased four years ago at a cost of $30,000. At the time of acquisition, the city estimated that the police car had a useful life of five years and a salvage value of $5,000.;c) During the year, the city spent $12 million to build a third lane on both sides of the major north-south highway through town.;d) The city traded in a pickup truck used in general government operations for a new pickup truck, paying a difference of $18,000. The old pickup truck was purchased four years ago at a cost of $21,000. At the time it had an estimated useful life of five years and an estimated salvage value of $6,000. At the time of the trade the old truck had a fair value of $10,000. The new truck has a sticker price of $29,000.;e) During the year the city began construction of a new city hall. By year-end, the city had made progress payments to the contractor of $3 million.;f) The city received a gift of land from a citizen. The land is to be used to build a city park. The land had been in the donor?s family since it was homesteaded. It had a fair value when contributed of $2 million.

 

Paper#23909 | Written in 18-Jul-2015

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