Reference no: EM131525603

Question: The State Government administers a special revenue fund, the Fish and Game Fund . By legislation, revenue in this fund can be used only for the purpose of protection, propagation, and restoration of sport fish and game resources and the expenses of administering sport fish and wildlife programs. Revenues are received from the sale of State sport fishing and hunting licenses and special permits as well as money received in settlement of a claim or loss caused by damage to fish and game purposes. The fund began in 2012 with the following balances:

1. The State adopted a budget for the Fish and Game Fund providing estimated revenues of $1,400,000, appropriations of $1,680,000, and anticipated transfers from the State's General Fund of $300,000. All expenditures, other than capital expenditures, are to be charged to Current Expenditures-Wildlife Management.

2. The beginning Budgetary Fund Balance-Reserve for Encumbrances represents outstanding purchase orders for hatchery supplies that will be received in the current year. It is the State's policy to honor outstanding purchase orders from the previous year.

3. Hunting and fishing licenses are sold by outfitters and outdoor equipment retailers and are remitted to the State by the 15th of the following month. During 2012, the State received $1,150,000 in cash for licenses, which includes the amount accrued at the end of the previous year. In addition, it is estimated $137,000 will be received in January 2013 for December 2012 sales.

4. During the year, the State received an additional $255,000 for fines levied against individuals violating state hunting and fishing laws.

5. The State operates fish hatcheries for its stocking program. During the year, the State placed orders totaling $260,000 for hatchlings, feed, and other supplies. These are in addition to the outstanding purchase orders from 2011.

6. The State received supplies at an invoice cost totaling $286,000 for hatchery supplies. The related encumbrances for these items totaled $289,000 (this includes the $36,000 issued in 2011).

7. Payments of accounts payable totaled $303,000 in 2012.

8. The General Fund provided $300,000 to the Fish and Game Fund for the acquisition of a new fish hatchery. This amount was received in 2012.

9. A purchase order was awarded to Aquatics Construction Company for the new hatchery in the amount of $305,000. The contract was completed and capital expenditures for the new hatchery were paid in the amount of $305,000.

10. Wages were paid during the year in the amount of $990,000. This includes the unpaid amounts accrued at the end of the previous year.

11. Unpaid wages related to the last pay period of 2012 totaled $42,000 and will be paid in January 2013.

12. At December 31, the unused hatchery supplies on hand totaled $6,700.

Required: Use the Excel template provided. A separate tab is provided in Excel for each of these steps.

a. Prepare journal entries to record the information described in items 1 to 12.

b. Post these entries to T-accounts.

c. Prepare closing journal entries; post to the T-account provided. Classify fund balances assuming all spendable net resources are classified as Restricted

d. Prepare a Statement of Revenues, Expenditures and Changes in Fund Balance for the Special Revenue Fund for the year ending 2012.

e. Prepare a Balance Sheet for the Special Revenue Fund as of December 31, 2012.