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Adjusting and Closing Entries for Governmental Activities, Government-wide Level; Preparat

Adjusting and Closing Entries for Governmental Activities, Government-wide Level; Preparat

Adjusting and Closing Entries for Governmental Activities,
Government-wide Level; Preparation of Government-wide
and Major Fund Financial Statements
a.

Prior to preparing financial statements at the end of FY 2014, it is necessary to record
depreciation expense for the year for governmental activities at the government-wide
level.
Based on general capital assets assigned to specific functions, depreciation expense
related to equipment and infrastructure is allocated to functions as shown below:
General Government
Public Safety
Public Works
Culture and Recreation
Totals

Equipment
$ 42,348
220,212
84,696
76,224
$423,480

Infrastructure
$118,344
$118,344

Buildings
$37,600
65,800
41,360
43,240
$188,000

Required: [Para. 9-a] Record depreciation expense for the year 2014 in the
governmental activities general journal at the government-wide level. Verify accuracy
of the adjusting entries and post to the general ledger by clicking [Post Entries].
b. Although closing entries were made in each fund in Chapters 4 through 6 of this
cumulative problem, they have not yet been recorded at the government-wide level.
Required: Closing Entries. Record the journal entries required on December 31,
2014 to close all temporary accounts for governmental activities at the governmentwide level. These entries should also recognize changes in the accounts Net Position
—Net Investment in Capital Assets (decrease of $720,668), Net Position—Restricted
for Public Safety (increase of $15,000), Net Position—Restricted for Capital Projects
(increase of $390,000), and Net Position—Restricted for Debt Service (increase of
$28,000). For each account to be closed or reclassified, be sure and click on the
check mark for [Closing Entry] and that “Closing Entries” appears in the
[Transaction Description] box. Post the closing entries to the general ledger by
clicking on [Post Entries].

Please remember that before closing the City of Smithville, you must
click on [File], and [Save/Save As] to save your work. Your work is
NOT automatically saved.
c. Use the exportable trial balances used in Chapters 2 through 7 of this problem, and
the exportable pre-closing trial balance and post-closing trial balance for
governmental activities, to prepare required government-wide and governmental fund
financial statements and reconciliations that the City of Smithville must present for its
basic financial statements to be in conformity with generally accepted accounting

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principles. (See Illustrations A2-1 through A2-6 of the Reck, Lowensohn, and Wilson
textbook for examples of these statements.) We recommend that you use Excel to
prepare these financial statements; however, your instructor may want you to do these
manually. (Note: The City of Smithville is a primary government and has no other
organizations for which it is accountable as component units.)

36

Appendix A - Adobe Flash Player Security Settings
When first starting the Smithville program in a browser, an Adobe Flash Player
Security warning pop-up might show up:

Click on "Settings..." button to be directed to the Adobe Flash Player™ Settings
Manager and select "Always allow" radio button to allow the player working
properly:

Comment: The above screenshots are result of the default features of the Flash
player and it is common across all the platforms. Whenever user is getting a popup message, the setting needs to be changed as shown in the above screenshot.

--The End--
Roshan kumar 08-Nov-2017

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