JIMMA UNIVERSITY
COLLEGE OF BUSINESS AND ECONOMICS
DEPARTMENT OF ACCOUNTING AND FINANCE
Assignment of Accounting for public sector and civil society
accounting
Number of member per Group Maximum Seven
Submission date: Final exam Date
There are five independent questions in this assignment, and you should answer them
neatly. All group members must participate. Coping from each other will result you in NI.
1. Prepare the general journal entries necessary to record the following selected transactions of the
General Fund of the City of Jimma (this part is ASSIGNMENT)
1. Property taxes of $4,000,000 were levied. The city estimates that 1.5 percent of the
total levy will prove uncollectible and that $2,000,000 (gross) of the $4,000,000 tax
levy will be collected soon enough to qualify for a 2 percent discount. Property taxes
of $1,800,000 (gross receivable) were collected within the 2 percent discount period.
The remaining taxes are now past due and are declared delinquent. Property taxes of
$1,550,000 (gross receivable) were collected after the discount period expired,
together with late penalties of $3,400. A property owner is withholding payment of
property taxes pending appeal of the assessed valuation of the property for the current
year. The city’s attorney believes the appeal will be denied. However, the appeal
action means that property taxes that would normally already have been collected,
$42,000, will probably not be received until well into the next fiscal year. Delinquent
taxes receivable of $9,500 was written off as uncollectible.
2. The city’s Building Inspection Department, accounted for through the General Fund,
did work for an expansion of the city’s water utility operation, and accounted for
through an Enterprise Fund. The Building Inspection Department billed the water
utility $10,250. A $220,000 3-year loan was authorized and made from the General
Fund to the Water Utility Enterprise Fund to provide interim financing for an
expansion project. Payment of $600,000 of General Fund cash was authorized and
made to provide permanent capital for a new Internal Service Fund.
3. On Hidar, 15 a new paving machines for the Street Department (accounted for
through the General Fund) were ordered at a price of $32,000. And later after a month
on Thiasias, 20 the paving machine ordered in above were received along with an
invoice for $31,700. The invoice was vouchered for payment.
4. The city council reviewed budget-to-actual operating results to date with the Finance
Director and reduced the estimate of sales tax revenue by $24,000; correspondingly,
the council decided to reduce the appropriation for street maintenance by $20,000.
5. It was discovered that the purchase of a copy machine for $3,850, previously recorded
as a capital outlay expenditure of the mayor’s office (General Fund), was actually
made to benefit the public library (Special Revenue Fund). The General Fund and the
Special Revenue Fund maintain their cash accounts at separate banks. The date to
transfer the cash has not yet been set.
