The following transactions and events affected a Special

Revenue Fund
The following transactions and events affected a Special Revenue Fund of Stem Independent
School District during 20X4.1. The chief accountant discovered that (a) the $20,000 proceeds of
a sale of used educational equipment in 20X3 had been recorded as 20X4 revenues when
received in early 20X4, and (b) $150,000 of property taxes receivable were not available at the
end of 20X3 but were reported as revenues in 20X3.2. Because of a change in the timing of the
payments of the state minimum education program assistance grants to school districts, the
related revenue recognition policy was changed. Substantial amounts of the state payments for
the prior fiscal year were reported as deferred revenue at year end under the old policy, but
most will now be considered available revenue. The comparative Deferred State Assistance
account balances at the end of the current year and prior year under the old and new policies
were determined to be:.:.3. The auditor discovered the following errors:a. Special instruction
fees of $8,000 paid for the hearing-impaired education program, properly chargeable to the
20X4 Education—Hearing-Impaired account in the General Fund, were charged to that account
in this Special Revenue Fund.b. $130,000 of federal grant revenues were earned by incurring
qualifying expenditures during 20X3, but no grant cash had been received and no revenues
were recorded in 20X3. Furthermore, the federal grantor agency has not been billed for this
payment.c. A transfer from the General Fund during 20X4, $85,000, was credited to the
Revenues—Other account in this Special Revenue Fund.d. Interest revenue earned and
received during 20X4, $15,000, was improperly recorded as Revenues—Other, whereas a
separate Revenues—Interest account is maintained.e. A 20X4 payment in lieu of taxes by the
federal government was erroneously credited to the Education—General and Administrative
expenditures account, $50,000.4. The following adjusting entries were determined to be
necessary at the end of 20X4:a. State special education grants received during 20X4 and
recorded as 20X4 revenues, $800,000, were only 75% earned by incurring qualifying
expenditures during 20X4.b. The Stem Independent School District was notified that the state
had collected $300,000 of sales taxes for its benefit and would remit them early in
20X5.RequiredPrepare the journal entries to record these error corrections, changes in
accounting principles, and adjustments in the General Ledger accounts only of the Special
Revenue Fund of Stem Independent School District.View Solution: The following transactions
and events affected a Special Revenue Fund
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