Project Three - Recording Revenue Transactions

Learning Objectives: In this project, you will learn to:

·  prepare modified accrual basis revenue entries

·  prepare the trial balance from the journal entries entered

Preparing the Transactions

The following revenue-related events occurred on February 28, 2011. For each event we shall:

·  Analyze the transaction to determine the appropriate debit/credit amounts and account names.

·  Record the transactions as a Journal Entry in the Fund Balance General Ledger

We will record the transactions in journal-entry form as we did in the previous project.

Journal Type: JV
Session ID: Last Name, First Name Initial - Project 3
Status: BP
Description: Recording revenue transactions
Date: 2/28/2011
Voucher ID: 301 to 305
Date: 02/28/2011
Reverse: No
Description: As mentioned below for each entry
Entry Type: N
Effective Date: 02/28/2011

Event 1: Property Tax Transactions

During the year, and in first 60 days of the next year, the town engaged in the following transactions:

These five transactions should be entered in separate Journal Vouchers (301 - 305, respectively) within a new Journal Vouchers Session.

a) The town levied general fund (#101) property taxes of $15,000,000.

Entry:

General Fund (fund #101) / Debit / Credit
Property taxes receivable (101-000-105) / 15,000,000
Deferred property taxes revenue (101-000-224) / 15,000,000

b) The fund collected $80,000 of property taxes from prior years, which had been classified as “delinquent”.

Entry:

General Fund (fund #101) / Debit / Credit
Cash (101-000-101) / 80,000
Property taxes receivable - delinquent (101-000-106) / 80,000
Deferred property tax revenue (101-000-224) / 80,000
Property tax revenue (101-000-301) / 80,000

c) The fund collected property taxes of $14,000,000 of the current year levy.

Entry:

General Fund (fund #101) / Debit / Credit
Cash (101-000-101) / 14,000,000
Property taxes receivable (101-000-105) / 14,000,000
Deferred property tax revenue (101-000-224) / 14,000,000
Property tax revenue (101-000-301) / 14,000,000

d) The town collected property taxes of $800,000 in the 60 days following the close of the year (an amount to be recognized as current year revenue).

Entry:

General Fund (fund #101) / Debit / Credit
Deferred property tax revenue (101-000-224) / 800,000
Property tax revenue (101-000-301) / 800,000

e) It classified the $200,000 balance of the current-year levy as delinquent (an amount to be recognized as deferred revenue).

Entry:

General Fund (fund #101) / Debit / Credit
Property taxes receivable - delinquent (101-000-106) / 200,000
Property tax receivable (101-000-105) / 200,000


Event 2: Sales Tax Transaction

Journal Type: JV

Within the same Session as the first five Vouchers

Voucher ID: 306
Date: 02/28/2011
Reverse: No
Description: Town collected sales taxes of $2,350,000
Entry Type: N
Effective Date: 02/28/2011

On February 28, 2011, it collected sales taxes of $2,350,000

Create a Journal Entry to record this transaction. Enter this information in the heading of the Journal Entry window. Then enter your transaction and click Save.

Entry:

General Fund (fund #101) / Debit / Credit
Cash (101-000-101) / 2,350,000
Sales taxes revenue (101-000-310) / 2,350,000

Event 3: Fine Revenue Transaction

Journal Type: JV

Within the same Session

Voucher ID: 307
Date: 02/28/2011
Reverse: No
Description: Town collected fines of $110,000.
Entry Type: N

Effective Date: 02/28/2011

On February 28, 2011, the Town of Oakville collected fines of $110,000.

Create a Journal Entry to record this transaction. Enter this information in the heading of the Journal Entry window. Then enter your transaction and click Save.

Entry:

General Fund (fund #101) / Debit / Credit
Cash (101-000-101) / 110,000
Fines revenue (101-000-315) / 110,000

Event 4: Licenses and permits fee revenue

Journal Type: JV

Within the same Session

Voucher ID: 308
Date: 02/28/2011
Reverse: No
Description: Town collected licenses and permits of $45,000.
Entry Type: N
Effective Date: 02/28/2011

On February 28, 2011, Oakville collected fees for licenses and permits of $45,000.

Entry:

General Fund (fund #101) / Debit / Credit
Cash (101-000-101) / 45,000
Licenses and permits fees revenues (101-000-320) / 45,000

Event 5: Cash grant to the Special Revenue Fund

Journal Type: JV

Within the same Session

Voucher ID: 309
Date: 02/28/2011
Reverse: No
Description: Town was awarded $350,000 cash grant for training
Entry Type: N
Effective Date: 02/28/2011

On February 28, 2011, the town was awarded a cash grant of $350,000 to train law enforcement officers.

Entry:

Special Revenue (fund #205) / Debit / Credit
Cash (205-000-101) / 350,000
Grant revenue (205-000-325) / 350,000

Requirements for project Three:

You need to print and turn in the Unposted General Ledger Transaction Report – Project 3

(Total: $47,015,000).

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