Return to CHAPTER 85


state seal 85.65
Assets - Illustrative Entries

85.65.10

May 1, 1999

These entries are for illustrative purposes

The following entries illustrate transactions affecting assets. These entries are for illustrative purposes only and should not be considered all inclusive. Entries posted to GL Code Series 71XX "In-Process" in treasury and treasury trust accounts also require an entry, generally from the Office of the State Treasurer (OST) as illustrated below, to clear the In-Process GL Codes.

The entry would be reversed for In-Process debit amounts.

  Dr. Cr.
In-Process (71XX) xxx  
  Current Treasury Cash Activity (OST Only) (4310)   xxx

85.65.12

May 1, 1999

Deposit of cash revenues

To record the deposit of cash revenue received. Refer to Subsections 85.50.10 and 85.50.20.

  Dr. Cr.
Cash In Bank (1110) or
Receipts In-Process (7110)
xxx  
  Cash Revenues (3210) (with appropriate revenue source code)   xxx

85.65.14

June 1, 2015

Petty cash - treasury and treasury trust accounts
85.65.14.a

To record the establishment of or an increase in a treasury or treasury trust petty cash account. Refer to Subsections 85.50.60.a or 85.50.70.a, respectively.

  Dr. Cr.
Petty Cash (1130) xxx  
  Warrants/ACH Payments In-Process (7120)   xxx

85.65.14.b

To record the abolishment of, or a reduction in, a treasury or treasury trust petty cash account.  Refer to Subsection 85.50.60.f or 85.50.70.d, respectively.

  Dr. Cr.
Receipts In-Process (7110) xxx  
  Petty Cash (1130)   xxx

85.65.16

June 1, 2015

Petty cash - local accounts
85.65.16.a

To record the establishment of, or an increase in, a local petty cash account. Refer to Subsection 85.50.70.a.

  Dr. Cr.
Petty Cash (1130) xxx  
  Cash in Bank (1110)   xxx

85.65.16.b

To record the abolishment of, or a reduction in, a local petty cash account. Refer to Subsection 85.50.70.d.

  Dr. Cr.
Cash in Bank (1110) xxx  
  Petty Cash (1130)   xxx

85.65.18

January 1, 2014

Accounting for the acquisition of non-current investments
85.65.18.a

To record the acquisition of non-current equity investments at trade date. Refer to Subsection 85.52.30.a.

  Dr. Cr.
Investments (1210) xxx  
  Investment Trades Pending Payable (5123)   xxx

85.65.18.b

To record the settlement of the trade for acquisition of non-current equity investments. Refer to Subsection 85.52.30.a.

  Dr. Cr.
Investment Trades Pending Payable (5123) xxx  
  In-Process (71XX)   xxx

85.65.18.c

To record the acquisition of non-current fixed income investments at trade date including purchased accrued interest. Refer to Subsection 85.52.30.a.

  Dr. Cr.
Investments (1210) xxx  
Interest Receivable on Investments (1316) xxx  
  Investment Trades Pending Payable (5123)   xxx

85.65.18.d

To record the settlement of the trade for acquisition of non-current fixed income investments. Refer to Subsection 85.52.30.a

  Dr. Cr.
Investment Trades Pending Payable (5123) xxx  
  In-Process (71XX)   xxx

85.65.20

July 1, 2003

Accounting for earnings and costs associated with non-current investments
85.65.20.a

To record interest or dividend income on non-current investments received in cash including purchased accrued interest. Refer to Subsection 85.52.10.

  Dr. Cr.
Receipts In-Process (7110) or
Cash in Bank (1110)
xxx  
  Interest and Dividends Receivable (1316)   xxx
  Cash Revenues (3210) Revenue Source Code (0401) Treasury Investment Income, (0409) Interest Income, or (0411) Dividend Income   xxx

85.65.20.b

To record interest or dividend income on non-current investments which was reinvested.

  Dr. Cr.
Investments (1210) xxx  
  Cash Revenues (3210) Revenue Source Code (0401) Treasury Investment Income, (0409) Interest Income, or (0411) Dividend Income   xxx

85.65.20.c

To record the payment of investment related costs (e.g., advisor fees, consulting fees, manager fees) not associated with an investment sale transaction.

  Dr. Cr.
Cash Revenues (3210) Revenue Source Code (0473) Costs of Investment Activities xxx  
  Warrants/ACH Payments In-Process (7120)   xxx

85.65.22

July 1, 2013

Accounting for fair value adjustment to non-current investments

To record the adjustment to reflect an increase to the fair value of non-current investments. To record a decrease in fair value, the revenue entry is reversed.  Refer to Subsection 85.52.30.b.

  Dr. Cr.
Valuation Allowance - Investments (1280) xxx  
  Noncash Revenues (3220) Revenue Source Code (0413) Capital Gains and Losses   xxx

85.65.24

July 1, 2013

Accounting for the sale of non-current investments
85.65.24.a

To record the sale at trade date of non-current investments and the resulting gain on investments.  For a loss, the entry would be reversed. Refer to Subsection 85.52.30.c.

  Dr. Cr.
Investment Trade Pending Receivable (1323) xxx  
Accrued Revenues (3205) Revenue Source Code (0473) Cost of Investment Activities xxx  
  Investments (1210)   xxx
  Accrued Revenues (3205) Revenue Source Code (0413) Capital Gains and Losses   xxx

85.65.24.b

To record the settlement of the trade for the sale of non-current investments. For a loss, the entry would be reversed. Refer to Subsection 85.52.30.c.

  Dr. Cr.
In-Process (71XX) xxx  
Cash Revenues (3210) Revenue Source (0473) Costs of Investment Activities xxx  
Accrued Revenues (3205) Revenue Source (0413) Capital Gains and Losses xxx  
  Cash Revenues (3210) Revenue Source (0413)   xxx
  Capital Gains and Losses   xxx
  Accrued Revenues (3205) Revenue Source (0473) Costs of Investment Activities   xxx
  Investment Trades Pending Receivable (1323)   xxx

85.65.24.c

To reverse the non-cash revenue recognized in posting adjustments to increase fair value. Entry would be reversed if fair value adjustments recorded a loss. Refer to Subsection 85.52.30.c.

  Dr. Cr.
Noncash Revenues (3220) Revenue Source Code (0413)
Capital Gains and Losses
xxx  
  Valuation Allowance – Investments (1280)   xxx

85.65.24.d

To reverse the nonspendable portion of fund balance in governmental funds for non-current investments not offset by unearned revenue or a liability.

  Dr. Cr.
Nonspendable Investments (9123) xxx  
  Appropriate fund equity GL code (9XXX)   xxx

85.65.28

June 1, 2011

Accounting for deferred compensation (IRC Section 457)

In accordance with Statement No. 34 of the Governmental Accounting Standards Board, the state’s deferred compensation plan is accounted for and reported as a pension trust fund. Acquisitions and sales of deferred compensation plan investments are to follow the entries in Subsections 85.65.18 and 85.65.24, respectively, except that no entry is to be made to GL 9123 "Nonspendable Investments."

85.65.30

July 1, 2003

Taxes receivable

To record long-term taxes receivable which are measurable but not due within twelve months. Refer to Subsection 85.54.15.c.
  Dr. Cr.
Taxes Receivable (1611) xxx  
  Allowance for Uncollectible Taxes Receivable (1641)   xxx
  Unavailable Revenues (5292)   xxx

85.65.32

July 1, 2001

Receivables
85.65.32.a

To record a receivable at time of billing. Refer to Subsection 85.54.45.a.

  Dr. Cr.
Accounts Receivable (1312) xxx  
  Accrued Revenues (3205) (appropriate revenue source codes)   xxx

 

85.65.32.b

To value receivables and adjust the allowance for uncollectible accounts to reflect the amount estimated to be uncollectible at the end of the period in a governmental fund type account. Refer to Subsection 85.54.55.b.
  Dr. Cr.
Accrued Revenues (3205) (with revenue source code originally credited) xxx  
  Allowance for Uncollectible Accounts Receivable (1342)   xxx

85.65.32.c

To value receivables and adjust the allowance for uncollectible accounts to reflect the amount estimated to be uncollectible at the end of the period in a proprietary or trust fund type account. Refer to Subsection 85.54.55.b. Example assumes a reduction in collectability. If collectability appears improved, the entry would be reversed.
  Dr. Cr.
Bad Debt Expense 6515 (Sub-Object WC) xxx  
  Allowance for Uncollectible Accounts Receivable (1342)   xxx

85.65.32.d

To write off receivables determined to be uncollectible by the state. Refer to Subsection 85.54.55.c.
  Dr. Cr.
Allowance for Uncollectible Accounts Receivable (1342) xxx  
  Accounts Receivable (1312)   xxx


85.65.33

July 1, 2010

Travel advances receivable
85.65.33.a

To record the issuance of a travel advance. In this example, the amount advanced is $500.  Refer to Subsection 85.54.44.

  Dr. Cr.
Travel Advance (1383) 500  
  Accounts Payable (5111)   500
       
Accounts Payable (5111) 500  
  Cash in Bank (1110) or In-Process (71XX)   500

 

85.65.33.b

To record travel expenditures when the travel advance issued is equal to the amount of travel costs.

  Dr. Cr.
Cash Expenditure (6510) Object G 500  
  Travel Advance (1383)   500
       

85.65.33.c

To record travel expenditures when the travel advance issued is less than the amount of travel costs. In this example, travel costs are $700.

  Dr. Cr.
Cash Expenditure (6510) Object G 500  
  Travel Advance (1383)   500
     
Accrued Expenditure (6505) Object G 200  
  Accounts Payable (5111)   200
       
Cash Expenditure (6510) Object G 200  
  Accrued Expenditure (6505) Object G   200
     
Accounts Payable (5111) 200  
  Cash in Bank (1110) or In-Process (71XX)   200

85.65.33.d

To record travel expenditures when the travel advance issued is greater than the amount of the travel costs. In this example, travel costs are $400. The traveler must reimburse the agency for the excess advanced.

  Dr. Cr.
Cash Expenditure (6510) Object G 400  
  Travel Advance (1383)   400
       
Cash Receipts In-Process (7110) 100  
  Travel Advance (1383)   100


85.65.34

June 1, 2013

Due from federal government
85.65.34.a

To record amounts receivable for the reimbursement of federal expenditures. Refer to Subsection 85.54.20.
  Dr. Cr.
Due from Federal Government (1351) xxx  
  Accrued Revenues (3205) Revenue Source Code (03XX)   xxx

85.65.34.b

To record the receipt of monies due from the federal government. Refer to Subsection 85.54.20.
  Dr. Cr.
Cash in Bank (1110) or
Receipts In-Process (7110)
xxx  
  Cash Revenues (3210) Revenue Source Code (03XX)   xxx
 
Accrued Revenues (3205) Revenue Source Code (03XX) xxx  
  Due from Federal Government (1351)   xxx

85.65.34.c

To record federal receivables which are in dispute at the end of the accounting period in a governmental fund type account. Refer to Subsection 85.54.20.
  Dr. Cr.
Accrued Revenues (3205) Revenue Source (03XX) xxx  
  Unearned Revenues (5190)   xxx


85.65.36

June 1, 2011

Long-term loans

The following entries illustrate disbursement and repayment for both budgeted and non-budgeted long-term loans. Since the loan in this illustration is made to a private entity, long-term GL Code 1614 "Loans Receivable" is used. However, this example may be applied to other types of long-term loans using other receivable general ledger codes, such as GL Code 1652 "Due from Other Governments." Refer to Subsection 85.54.40.

85.65.36.a.(1)

To record disbursement of a budgeted long-term loan from a governmental fund type account. Budgeted loans present a unique situation where loan disbursements and repayments are expenditures and revenues for budgetary purposes, but not for GAAP financial accounting purposes.

Note: In AFRS, Sub-object NR is reported as Fund Balance on the GAAP operating statement. On the Budget to Actual statement, however, it is reported as an expenditure.
  Dr. Cr.
Loans Receivable (1614) xxx  
  In-Process (71XX)   xxx
 
Cash Expenditures/Expenses (6510) (Subobject NR) xxx  
  Nonspendable Receivables - Long-Term (9131)   xxx

85.65.36.a.(2)

To record repayment of the budgeted long-term loan from (a) above, an interim process occurs reclassifying the expected payment from long-term to short-term. The amount recognized and recorded at fiscal year-end is based on the subsequent year's scheduled payments.

Note: In AFRS, Revenue Source Code 0866 "Loan Principal Repayment" is reported as Fund Balance on the GAAP operating statement. On the Budget to Actual statement, however, it is reported as revenue.
  Dr. Cr.
Loans Receivable (1314) or
Due from Other Governments (1352)
xxx  
  Loans Receivable (1614) or
Due from Other Governments (1652)
  xxx
 
Nonspendable Receivables - Long-Term (9131) xxx  
  Accrued Revenue (3205) Revenue Source Code (0866) Loan Principal Repayment   xxx

Then repayment is recorded as received.

  Dr. Cr.
Receipts In-Process (7110) xxx  
  Loans Receivable (1314) or
Due from Other Governments (1352)
  xxx

For loans whose payments are uncertain, the receivable is reclassified from long-term to short-term upon receipt of the loan payment.

  Dr. Cr.
Loans Receivable (1314) or
Due from Other Governments (1352)
xxx  
  Loans Receivable (1614) or
Due from Other Governments (1652)
  xxx
 
Nonspendable Receivables - Long-Term (9131) xxx  
  Accrued Revenue (3205) Revenue Source Code (0866) Loan Principal Repayment   xxx

Then the payment receipt is recorded.

  Dr. Cr.
Receipts In-Process (7110) xxx  
  Loans Receivable (1314) or
Due from Other Governments (1352)
  xxx
 
Accrued Revenue (3205) Revenue Source Code (0866)
Loan Principal Repayment
xxx  
  Cash Revenue (3210) Revenue Source Code (0866)
Loan Principal Repayment
  xxx

 

85.65.36.b.(1)

To record disbursements of a long-term loan which are not budgeted.

Note: The entry to adjust the nonspendable portion of fund balance for receivables is made in governmental trust fund type accounts only. This entry is not applicable in proprietary and trust fund type accounts.
  Dr. Cr.
Loans Receivable (1614) xxx  
  In-Process (71XX) or
Cash in Bank (1110)
  xxx
 
Appropriate fund equity GL code (9XXX) xxx  
  Nonspendable Receivables - Long-Term (9131)   xxx

 

85.65.36.b.(2)

To record repayment of the non-budgeted long-term loan from (b) above, after an interim process occurs reclassifying receivables from long-term to short-term.

  Dr. Cr.
Loans Receivable (1314) or
Due from Other Governments (1352)
xxx  
  Loans Receivable (1614) or
Due from Other Governments (1652)
  xxx
 
Nonspendable Receivables - Long-Term (9131) xxx  
  Appropriate fund equity GL code (9XXX)   xxx

Then the loan payment is recorded.

  Dr. Cr.
Cash in Bank (1110) or
Receipts In-Process (7110)
xxx  
  Loans Receivable (1314) or
Due from Other Governments (1352)
  xxx

 


85.65.38

June 1, 2011

Consumable inventories - periodic inventory method
85.65.38.a

To record the acquisition of consumable inventories. Refer to Subsection 85.56.20.a(1).
  Dr. Cr.
Cash Expenditures/Expenses (6510) Object E xxx  
  Cash in Bank (1110) or
In-Process (71XX)
  xxx

85.65.38.b

To record the use of consumable inventories during the year.

No entry is required.

 

85.65.38.c

At year-end, to record an increase in consumable inventories during the year. Refer to Subsection 85.56.20.a(3) and (4). These entries would be reversed to record a decrease in consumable inventories during the year.

Note: The second entry is to adjust the nonspendable portion of fund balance in governmental fund type accounts only.

  Dr. Cr.
Consumable Inventories (1410) xxx  
  Cash Expenditures/Expenses (6510) Object E   xxx
 
Appropriate fund equity GL code (9XXX) xxx  
  Nonspendable Consumable Inventories (9120)   xxx

 


85.65.40

May 1, 1999

Consumable inventories - perpetual inventory method
85.65.40.a

To record the acquisition of consumable inventories. Refer to Subsection 85.56.20.b.(1).
  Dr. Cr.
Consumable Inventories (1410) xxx  
  Cash in Bank (1110) or
In-Process (71XX)
  xxx

85.65.40.b

To record the use of consumable inventories during the year. Refer to Subsection 85.56.20.b.(2).

  Dr. Cr.
Cash Expenditures/Expenses (6510) Object E xxx  
  Consumable Inventories (1410)   xxx

 


85.65.42

May 1, 1999

Merchandise inventories in proprietary fund type accounts—periodic inventory method
85.65.42.a

To record the acquisition of merchandise inventories as an expense. Refer to Subsection 85.56.30.a.(1).
  Dr. Cr.
Cost of Goods Sold (6516) Object F xxx  
  Cash in Bank (1110) or
In-Process (71XX) or
Payables (51XX)
  xxx

85.65.42.b

To record the sale of merchandise inventories when the merchandise inventory purchase is recorded as an expense. Refer to Subsection 85.56.30.a.(2).

  Dr. Cr.
Cash in Bank (1110) or
In-Process (71XX) or
Receivables (13XX)
xxx  
  Cash Revenue (3210) or
Accrued Revenues (3205) Revenue Source Code (0450 or 0455) Sales
  xxx

 

85.65.42.c

To record the adjustment for merchandise inventory when the physical count shows the inventory value greater than the amount in the general ledger control account GL Code 1420 "Merchandise Inventories." This entry is reversed when the physical count shows the inventory value less than the recorded amount. Refer to Subsections 85.56.30.a.(3) and b.(3).

  Dr. Cr.
Merchandise Inventories (1420) xxx  
  Cost of Goods Sold (6516) Object F   xxx

 



85.65.44

May 1, 1999

Merchandise inventories in proprietary fund type accounts—perpetual inventory method
85.65.44.a

To record the acquisition of merchandise inventories as an asset. Refer to Subsection 85.56.30.b.(1).
  Dr. Cr.
Merchandise Inventories (1420) xxx  
  Cash in Bank (1110) or
In-Process (71XX) or
Payables (51XX)
  xxx

85.65.44.b

To record the sale of merchandise inventories when the merchandise inventory purchase is recorded as an asset. Refer to Subsection 85.56.30.b.(2).

The second entry is to adjust the merchandise inventory account and record the cost of goods sold:
  Dr. Cr.
Cash in Bank (1110) or
In-Process (71XX) or
Receivables (13XX)
xxx  
  Cash Revenue (3210) or
Accrued Revenues (3205) Revenue Source Code (0450 or 0455) Sales
  xxx
       
Cost of Goods Sold (6516) Object F xxx  
  Merchandise Inventories (1420)   xxx

 


85.65.46

January 1, 2014

Donations of consumable inventories

A common example of donated consumable inventory is federal surplus food commodities provided to the state for use in a variety of programs. This example assumes that commodities with a fair value of $5,000 are donated to the state for use in a governmental fund type account. The state pays $500 shipping costs for delivery of the commodities.

85.65.46.a

To record the acquisition of federally donated consumable inventories. Refer to Subsection 85.56.40.b.
  Dr. Cr.
Consumable Inventories (1410) 500  
Donated Inventories (1415) 5,000  
  Cash in Bank (1110) or
In-Process (71XX)
  500
  Unearned Revenues (5190)   5,000

85.65.46.b

To record the use of donated consumable inventories with a fair value of $4,000. Use of donated consumable inventories is treated as a nonbudgeted activity. The cash outlay for shipping costs is a budgeted expenditure. Refer to Subsection 85.56.40.b.

  Dr. Cr.
Expense Adjustments/Eliminations (GAAP) (6525) Object E 4,000  
Cash Expenditures/Expenses (6510) Object E 400  
  Consumable Inventories (1410)
  400
  Revenue Adjustments/Eliminations (GAAP) (3225) Revenue Source Code (0310) Dept. of Agriculture   4,000

 

85.65.46.c

To record year-end adjustment. Refer to Subsection 85.56.40.b.

Note: The second entry (for the shipping costs) is required in governmental and fund type accounts only.
  Dr. Cr.
Unearned Revenues (5190) 4,000  
  Donated Inventories (1415)   4.000
       
Appropriate fund equity GL code (9XXX) 1,000  
  Nonspendable Consumable Inventories (9120)   1,000

 


85.65.50

May 1, 1999

Prepaid expenses
85.65.50.a

To record the prepayment of goods and services, other than inventory, in proprietary and trust fund type accounts. Refer to Subsection 85.58.10.c.
  Dr. Cr.
Prepaid Expenses (1510) xxx  
  Cash in Bank (1110) or
In-Process (71XX)
  xxx

85.65.50.b

To record the portion of prepaid goods and services used during the period. Refer to Subsection 85.58.10.c.

  Dr. Cr.
Cash Expenditures/Expenses (6510) (with appropriate subobject) xxx  
  Prepaid Expenses (1510)   xxx


85.65.52

July 1, 2015

Acquisition of capital assets
85.65.52.a

Governmental Fund Type Accounts

The entry for the purchase of a capital asset records the expenditure in the account acquiring the asset with a corresponding entry in Account 997 "General Capital Assets Subsidiary Account." Refer to Subsection 85.60.30.a.

Operating Account:
  Dr. Cr.
Cash Expenditures/Expenses (6510) Object J xxx  
 

Cash in Bank (1110) or
In-Process (71XX)

  xxx

General Capital Assets Subsidiary Account (Account 997):

  Dr. Cr.
Capital Asset (2XXX) xxx  
 

Investment in General Capital Assets (9850)

  xxx

The following entry records the donation of a capital asset to a governmental fund type account.  Because governmental fund type accounts focus on current financial resources, no entry is made in the operating account.  However, an entry is made in Account 997 “General Capital Assets Subsidiary Account” to record the estimated acquisition value of the asset.  Refer to Subsection 85.60.30.a.

General Capital Assets Subsidiary Account (Account 997):
  Dr. Cr.
Capital Asset (2XXX) xxx
 
 

Investment in General Capital Assets (9850)

  xxx

85.65.52.b

Proprietary and Trust Fund Type Accounts

The entry to record the purchase of a capital asset is made in the appropriate capital asset GL code in the account acquiring the asset. Refer to Subsection 85.60.30.b.

Operating Account:
  Dr. Cr.
Capital Asset (2XXX) xxx
 
 

Cash in Bank (1110) or
In-Process (71XX)

  xxx

The following additional entry is required for budgeted proprietary and trust fund type accounts for capital asset acquisitions:

  Dr. Cr.
Cash Expenditures/Expenses (6510) Object J xxx
 
 

Expense Adjustments/Eliminations (GAAP) (6525) Object J

  xxx

The following entry records the donation of a capital asset to a proprietary or trust fund type account.

  Dr. Cr.
Capital Asset (2XXX) xxx
 
 

Noncash Revenues (3220) Revenue Source Code 0820 Capital Contributions or other appropriate revenue source code

  xxx

 


85.65.54

July 1, 2009

Assets that do not meet the state's capitalization policy

The entry for the acquisition of an asset that does not meet the state's capitalization policy records the expenditure/expense in the account acquiring the asset. Refer to Subsection 85.60.30.d.
  Dr. Cr.
Cash Expenditures/Expenses (6510) Subobject JA or JB xxx
 
 

Cash in Bank (1110) or
In-Process (71XX)

  xxx

85.65.56

July 1, 2009

Depreciation/amortization
85.65.56.a

Governmental Fund Type Accounts

The following entry records the depreciation on general capital assets in Account 997 "General Capital Assets Subsidiary Account." Refer to Subsection 85.60.40.a.

General Capital Assets Subsidiary Account (Account 997):

  Dr. Cr.
Depreciation/Amortization Expense (6591) (Subobject WA) xxx
 
 

Allowance for Depreciation - Capital Asset (2XXX) or
Allowance for Amortization – Intangible Assets (2480)

  xxx
xxx

85.65.56.b

Proprietary and Trust Fund Type Accounts

The following entry records the depreciation of capital assets in proprietary and trust fund type accounts. Refer to Subsection 85.60.40.b.

  Dr. Cr.
Depreciation/Amortization Expense (6511) (Subobject WA) xxx
 
 

Allowance for Depreciation – Capital Asset (2XXX) or
Allowance for Amortization – Intangible Assets (2480)

  xxx
xxx

 

 

85.65.58

July 1, 2012

Disposal of capital assets
85.65.58.a

Governmental Fund Type Accounts

The net proceeds received from the sale of general capital assets are generally recorded in the account that originally acquired the asset. Refer to Subsection 85.60.50.a. If the estimated net proceeds from disposition were included in the budget for the acquisition of the replacement capital asset and the expenditure for the acquisition of new capital assets has already been recorded at gross, the following entry is made:

  Dr. Cr.
Cash in Bank (1110) or
In-Process (71XX)
xxx
 
 

Cash Expenditures/Expenses (6510) Object J

  xxx

If the net proceeds from disposition were not included in the budget for a replacement capital asset, the following entry is to be made instead:

  Dr. Cr.
Cash in Bank (1110) or
In-Process (71XX)
xxx
 
 

Cash Revenues (3210) Revenue Source Code (0416) Sale of Property - Other

  xxx

In addition, an entry in Account 997 "General Capital Assets Subsidiary Account" is made to record the removal of the capital asset. In the following entry, the capital asset was not fully depreciated (i.e. the cost is greater than the accumulated depreciation). If the capital asset was fully depreciated (i.e. the cost and the accumulated depreciation are an equal amount), then in GL Code 6597 "Capital Asset Adjustment (General Capital Assets Subsidiary Only)" would net to zero.

General Capital Assets Subsidiary Account (Account 997):
  Dr. Cr.

Capital Asset Adjustment (General Capital Assets Subsidiary Account Only) (6597) Subobject WF

xxx  
Allowance for Depreciation Capital Assets (2XXX) xxx  
 

Capital Assets (2XXX)

  xxx

 

85.65.58.b

Proprietary and Trust Fund Type Accounts

The disposal of capital assets of proprietary and trust fund type accounts are accounted for in the account that recorded the asset. Refer to Subsection 85.60.50.b.
  Dr. Cr.
Cash in Bank (1110) or
In-Process (71XX)
Allowance for Depreciation - Capital Assets (2XXX)

xxx
xxx

 
 

Capital Assets (2XXX)
Gain and Loss on Sale of Capital Assets (3213) Revenue Source Code (0418) Gain or Loss on Sale of Capital Assets

xxx
xxx
 

The following additional entry is needed to record the net proceeds received upon disposition of a capital asset in budgeted proprietary and trust fund type accounts.

If the net proceeds from disposition were included in the budget for the acquisition of the replacement capital asset and the purchase for the new capital assets has already been recorded at gross, the following entry is made:

  Dr. Cr.
Expense Adjustments/Eliminations (GAAP) (6525) Object J xxx  
 

Cash Expenditures/Expenses (6510) Object J

  xxx

If the net proceeds from disposition were included in the budget as estimated revenues, the following entry is made:

  Dr. Cr.
Revenue Adjustments/Eliminations (GAAP) (3225) Revenue Source Code (0416) Sale of Property - Other xxx  
 

Cash Revenues (3210) Revenue Source Code (0416) Sale of Property - Other

  xxx

 


85.65.60

July 1, 2008

Trade-in of capital assets

These illustrative entries assume the following: a vehicle is purchased for $12,000 cash. (It has a fair value of $14,000 less a trade-in allowance of $2,000.) The trade-in vehicle originally cost $9,000 and has a current book value of $1,500.

85.65.60.a

Governmental Fund Type Accounts

These entries reflect the trade-in transaction in the operating account acquiring the vehicle and the corresponding entries in Account 997 "General Capital Assets Subsidiary Account." Refer to Subsection 85.60.50.a.

Operating Account:
  Dr. Cr.
Cash Expenditures/Expenses (6510) (Subobject J) 12,000  
 

Cash in Bank (1110) or
In-Process (71XX)

  12,000

General Capital Assets Subsidiary Account (Account 997):

The first entry removes the vehicle traded in. The second entry records the new vehicle.
  Dr. Cr.
Investment in General Capital Assets (9850)
Accumulated Depreciation – Furnishings, and Equipment (2420)
1,500
7,500
 
 

Furnishings and Equipment (2410)

  9,000
Furnishings and Equipment (2410) 13,500  
  Investment in General Capital Assets (9850)   13,500

85.65.60.b

Proprietary and Trust Fund Type Accounts

This entry reflects a trade-in transaction in non-budgeted proprietary and trust fund type accounts. Refer to Subsection 85.60.50.c.

  Dr. Cr.

Furnishings and Equipment (2410)
Accumulated Depreciation – Furnishings and Equipment (2420)

13,500
7,500
 
 

Furnishings and Equipment (2410)
Cash in Bank (1110) or
In-Process (71XX)

  9,000
12,000

 



85.65.62

June 1, 2004

Capital assets acquired through capital lease
85.65.62.a

Governmental Fund Type Accounts

The entry for the acquisition of capitalized leased assets records the expenditure in the account acquiring the leased assets with a corresponding entry in Account 997 "General Capital Assets Subsidiary Account." Refer to Subsection 85.60.70.a.

Operating Account:
  Dr. Cr.
Capital Asset Acquisitions by Lease-Purchase Agreements or Certificates of Participation (6514) Object J (Capital Outlays) xxx  
 

Other Financing Sources (3221) Revenue Source Code (0809) Capital Lease Acquisitions

  xxx

General Capital Assets Subsidiary Account (Account 997):

  Dr. Cr.
Furnishings and Equipment (2410) xxx  
 

Investment in General Capital Assets (9850)

  xxx

The entry to record lease payments, for acquisitions that do not meet the capital lease requirements in Subsection 30.20.30, is shown below. For such acquisition, no entry is made in Account 997 "General Capital Assets Subsidiary Account" until title transfers to the state and the fair value of the asset meets the state's capitalization policy.
  Dr. Cr.
Cash Expenditures/Expenses (6510) (Subobject ED or other subobject as appropriate) xxx  
 

Cash in Bank (1110) or
In-Process (71XX)

  xxx

To record subsequent acquisition of non-capitalized leased assets in Account 997 "General Capital Assets Subsidiary Account" upon transfer of the title. The asset is recorded at the fair value at the time title transfers.

General Capital Assets Subsidiary Account (Account 997):

  Dr. Cr.
Furnishings and Equipment (2410) xxx  
 

Investment in General Capital Assets (9850)

  xxx

 

85.65.62.b

Proprietary and Trust Fund Type Accounts.

To record capitalized leased equipment acquired by proprietary and trust fund type accounts in the account acquiring the leased assets. Refer to Subsection 85.60.70.b.
  Dr. Cr.
Furnishings and Equipment (2410) xxx  
 

Lease Purchase Agreements Payable (5172)
Lease Purchase Agreements Payable (5272)

  xxx
xxx

The entry to record lease payments, for acquisitions that do not meet the capital lease requirements in Subsection 30.20.30, is as follows:

  Dr. Cr.
Cash Expenditures/Expenses (6510) (Subobject ED or other subobject as appropriate) xxx  
 

Cash in Bank (1110) or
In-Process (71XX)

  xxx

To record the fair value of the subsequent acquisition of non-capitalized leased assets upon transfer of title.

  Dr. Cr.
Furnishings and Equipment (2410) xxx  
 

Cash Revenues (3210) Revenue Source Code (0486)
Recoveries of Prior Appropriation Expenditures

  xxx

 


85.65.64

July 1, 2009

Accounting for the construction of capital assets
85.65.64.a

Governmental Fund Type Accounts

Costs incurred for the construction of capital assets are to be recorded in the account incurring the expenditure. Refer to Subsection 85.60.90.b.

Operating Account:
  Dr. Cr.
Cash Expenditures/Expenses (6510) Object J or other subobject as appropriate xxx  
 

Cash in Bank (1110) or
In-Process (71XX) or Construction Contracts Payable (5117)

  xxx

Construction projects not completed at the end of the accounting period require an entry in Account 997 "General Capital Assets Subsidiary Account."

General Capital Assets Subsidiary Account (Account 997):

  Dr. Cr.
Construction In Progress (2510) xxx  
 

Investment in General Capital Assets (9850)

  xxx

Upon completion of the project, the construction in progress is reclassified to the appropriate capital asset GL code(s) in Account 997 "General Capital Assets Subsidiary Account."

General Capital Assets Subsidiary Account (Account 997):

  Dr. Cr.
Capital Assets (2XXX) xxx
 
 

Construction In Progress (2510)

  xxx

 

85.65.64.b

Proprietary and Trust Fund Type Accounts

In proprietary and trust fund type accounts, costs incurred for the construction of capital assets are to be recorded in the account incurring the expense. Refer to Subsection 85.60.90.c.

  Dr. Cr.
Construction In Progress (2510) xxx  
 

Cash in Bank (1110) or
In-Process (71XX) or Construction Contracts Payable (5117)

  xxx

The following additional entry is required for budgeted proprietary or trust fund type accounts where construction costs are appropriated.

  Dr. Cr.
Cash Expenditures/Expenses (6510) Object J xxx  
 

Expense Adjustments/Eliminations (GAAP) (6525) Object J

  xxx

Upon completion of the construction project, the construction in progress is reclassified to the appropriate capital asset GL code(s) for the total costs capitalized to date.

  Dr. Cr.
Capital Assets (2XXX) xxx
 
 

Construction In Progress (2510)

  xxx

 


85.65.66

January 1, 2014

Interagency/Interfund Capital Asset Transfers
85.65.66.a

The following entries illustrate how to record the transfer of a capital asset based on the fund type of the accounts involved in the transfer.  Refer to Subsection 85.60.97.b and c.

85.65.66.b

Transfer capital asset from Governmental Fund Type Account to a Proprietary or Trust Fund Type Account

The following entry records the transfer of a capital asset from a governmental fund type account. Because governmental fund type accounts focus on current financial resources, no entry is made in the operating account.  However, an entry in Account 997 “General Capital Assets Subsidiary Account” is made to record the removal of the capital asset. In this example, the capital asset was not fully depreciated (i.e. the cost is greater than the accumulated depreciation). If the capital asset was fully depreciated (i.e. the cost and the accumulated depreciation are an equal amount), the entries to GL Code 6597 "Capital Asset Adjustment (General Capital Assets Subsidiary Only)" would net to zero, and there would be no capital contribution recorded in the proprietary fund type account.

General Capital Assets Subsidiary Account (Account 997):

  Dr. Cr.
Capital Asset Adjustment (General Capital Assets Subsidiary Account Only) (6597) Subobject WF xxx  
Allowance for Depreciation – Capital Assets (2XXX) xxx  
  Capital Asset (2XXX)   xxx

Proprietary or Trust Fund Type Account:

  Dr. Cr.
Capital Asset (2XXX) xxx  
  Allowance for Depreciation – Capital Assets (2XXX )   xxx
 

Noncash Revenues (3220) Revenue Source Code 0820 Capital Contributions

  xxx

Note:  If a cash payment is made in conjunction with the transfer of the capital asset, it is receipted into the governmental operating account that initially purchased the capital asset using GL Code 3210 “Cash Revenues” with Revenue Source Code 0416 “ Sale of Property – Other.”

85.65.66.c

Transfer capital asset from Proprietary or Trust Fund Type Account to a Governmental Fund Type Account

The following entry records the transfer of a capital asset to a governmental fund type account. Because governmental fund type accounts focus on current financial resources, no entry is made in the operating account.  However, an entry in Account 997 “General Capital Assets Subsidiary Account” is made to record the addition of the capital asset. In this example, the capital asset was not fully depreciated (i.e. the cost is greater than the accumulated depreciation). If the capital asset was fully depreciated (i.e. the cost and the accumulated depreciation are an equal amount), the entries made to GL Code 9850 "Investment in General Capital Assets" would net to zero, and there would be no gain or loss on the sale of the capital asset recorded in the proprietary or trust fund type account.

General Capital Assets Subsidiary Account (Account 997):

  Dr. Cr.
Capital Assets (2XXX) xxx  
  Allowance for Depreciation – Capital Assets (2XXX)   xxx
  Investment in General Capital Assets (9850)   xxx

Proprietary or Trust Fund Type Account:

  Dr. Cr.
Allowance for Depreciation – Capital Assets (2XXX) xxx  
Gain and Loss on Sale of Capital Assets (3213) Revenue Source Code (0418) Gain or Loss on Sale of Capital Assets xxx  
  Capital Asset (2XXX)   xxx

Note:  If a cash payment is made in conjunction with the transfer of the capital asset, it is paid by the governmental operating account associated with the activity that will be using the capital asset using GL Code 6510 “Cash Expenditures” with the appropriate J subobject, and by the proprietary or trust fund type account using GL Code 3213 “Gains and Losses on Sales of Capital Assets” with Revenue Source Code 0418 “Gain or Loss On Sale of Capital Assets.”






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