During 2017, the City of Coyote’s General Fund received $10,000, which was recorded as a generalrevenue when it was actually a program revenue earned by its park program. a. What was the correct overall change for 2017 in the net position reported on the government-widefinancial statements? b. In the general information above, the parks reported net expenses for the period of $100,000.What was the correct amount of net expenses reported by the parks? Assume that the City of Coyote has already produced its financial statements for December 31,2017, and the year then ended. The city’s general fund was only for education and parks. Its capitalprojects funds worked with each of these functions at times during the current year. The city alsohad established an enterprise fund to account for its art museum. The government-wide financial statements indicated the following figures: ∙ Education reported net expenses of $600,000. ∙ Parks reported net expenses of $100,000. ∙ Art museum reported net revenues of $50,000. ∙ General government revenues for the year were $800,000 with an overall increase in the city’snet position of $150,000. The fund financial statements indicated the following for the entire year: ∙ The general fund reported a $30,000 increase in its fund balance. ∙ The capital projects fund reported a $40,000 increase in its fund balance. ∙ The enterprise fund reported a $60,000 increase in its net position. The CPA firm of Abernethy and Chapman has been asked to review several transactions thatoccurred during 2017 and indicate how to correct any erroneous reporting and the impact of eacherror. View each of the following situations as independent.
> Search the Internet for the official website of one or more state or local governments. After reviewingthis website, determine whether the latest comprehensive annual financial report (CAFR) is available onthe site. For example, the most recent comprehen
> The City of Danmark is preparing financial statements. Officials are currently working on the statementof activities within the government-wide financial statements. A question has arisen as to whether a particularrevenue should be identified on governme
> The City of Hampshore is currently preparing financial statements for the past fiscal year. The city manager is concerned because the city encountered some unusual transactions during the current fiscal period and is unsure as to their handling. Require
> The City of Bainland has been undergoing financial difficulties because of a decrease in its tax base caused by corporations leaving the area. On January 1, 2017, the city has a fund balance of only $400,000 in its governmental funds. In 2016, the city h
> Search the Internet for the official website of one or more state or local governments. On this website,determine whether the latest comprehensive annual financial report (CAFR) is available. For example,a recent comprehensive annual financial report for
> Obtain a copy of the original version of GASB Statement 34. Read paragraphs 239 through 277. Required Write a report describing alternatives that the GASB considered when it created Statement 34. Indicatethe alternative that you would have viewed as mos
> Go to the website www.gasb.org and click on “About Us” included in the list that runs across the top of the page. Then click on “Mission, Vision, and Core Values.” Read the information provided by GASB. Required Assume that a financial analyst with whom
> A government expects to receive revenues of $400,000 but has approved expenditures of $430,000.The anticipated shortage will have an impact on which of the following terms? a. Interperiod equity b. Modified accrual accounting c. Consumption accounting d.
> Which of the following statements is true? a. There are three different types of proprietary funds. b. There are three different types of fiduciary funds. c. There are five different types of fiduciary funds. d. There are five different types of governme
> When a partner withdraws from a partnership, why is the final distribution often based on theappraised value of the business rather than on the book value of the capital account balance?
> What is the purpose of enterprise funds? a. To account for operations that provide services to other departments within a government. b. To account for asset transfers. c. To account for ongoing activities such as the police and fire departments. d. To a
> What is the purpose of a special revenue fund? a. To account for revenues legally or externally restricted as an operating expenditure. b. To account for ongoing activities. c. To account for gifts when only subsequently earned income can be expended. d.
> Which of the following is not a governmental fund? a. Special revenue fund b. Internal service fund c. Capital projects fund d. Debt service fund
> Cash of $20,000 is transferred from the general fund to the enterprise fund to pay for work that wasdone. What is reported on the fund financial statements? a. No reporting is made. b. Other Financing Sources increase by $20,000; Other Financing Uses inc
> Cash of $20,000 is transferred from the general fund to the enterprise fund to pay for work that wasdone. What is reported on the government-wide financial statements? a. No reporting is made. b. Other Financing Sources increase by $20,000; Other Financi
> Cash of $60,000 is transferred from the general fund to the debt service fund. What is reported onthe fund financial statements? a. No reporting is made. b. Other Financing Sources increase by $60,000; Other Financing Uses increase by $60,000. c. Revenue
> Cash of $60,000 is transferred from the general fund to the debt service fund. What is reported onthe government-wide financial statements? a. No reporting is made. b. Other Financing Sources increase by $60,000; Other Financing Uses increase by $60,000.
> Which of the following is an example of an interactivity transaction? a. Money is transferred from the general fund to the debt service fund. b. Money is transferred from the capital projects fund to the general fund. c. Money is transferred from the spe
> A city constructs curbing in a new neighborhood and finances it as a special assessment. Underwhat condition should these transactions be recorded in an agency fund? a. Never; the work is reported in the capital projects funds. b. Only if the city is sec
> A city constructs a special assessment project (a sidewalk) for which it is secondarily liable. Thecity issues bonds of $90,000. It authorizes another $10,000 that is transferred out of the generalfund. The sidewalk is built for $100,000. The citizens ar
> Under what circumstance might goodwill be allocated to a new partner entering a partnership?
> A $110,000 payment is made on a long-term liability. Of this amount, $10,000 represents interest.Which of the following is not true for the recording of this transaction? a. Reduce liabilities by $100,000 in the government-wide financial statements. b. R
> The City of Frost has a 20-year debt outstanding. On the last day of the current year, this debt has anoutstanding balance of $4.8 million and five years remaining until it is due. On that date, the debt ispaid off early for $5 million. A new debt is iss
> The City of Dylan issues a 10-year bond payable of $1 million at face value on the first day of Year1. Debt issuance costs of $10,000 are paid on that day. For government-wide financial statements,how is this debt issuance cost reported? a. $1,000 is rec
> A city issues five-year bonds payable to finance construction of a new school. What recordingshould be made? a. Report the liability in the government-wide financial statements; show an other financing sourcein the fund financial statements. b. Report a
> A city issues a 60-day tax anticipation note to fund operations until taxes have been collected. Whatrecording should it make? a. The liability should be reported in the government-wide financial statements; an other financingsource should be shown in th
> The state awards a grant of $50,000 to the Town of Glenville. The state will pay the grant moneyto the town as a reimbursement for money spent on road repair. At the time of the grant, the statepays $8,000 in advance. During the first year of this progra
> The state government passes a law requiring localities to upgrade their water treatment facilities.The state then awards a grant of $500,000 to the Town of Midlothian to help pay for this cost. Whattype of revenue is this grant? a. Derived tax revenue. b
> An income tax is an example of which of the following? a. Derived tax revenue. b. Imposed nonexchange revenue. c. Government-mandated nonexchange revenue. d. Voluntary nonexchange transaction.
> A city acquires supplies for its fire department and uses the consumption method of accounting.Which of the following statements is true for the fund statements? a. An expenditures account was debited at the time of receipt. b. An expense is recorded as
> A government buys equipment for its police department at a cost of $54,000. Which of the followingis not true? a. Equipment will increase by $54,000 in the government-wide financial statements. b. Depreciation in connection with this equipment will be re
> A new partner enters a partnership and goodwill is calculated and credited to the original partners.How is the specific amount of goodwill assigned to these partners?
> At the end of the current year, a government reports a fund balance—assigned balance of $9,000 inconnection with an encumbrance. What information is being conveyed? a. A donor has given the government $9,000 that must be used in a specified fashion. b. T
> A purchase order for $3,000 is recorded in the general fund for the purchase of a new computer. Thecomputer is received at an actual cost of $3,020. Which of the following statements is correct? a. Machinery is increased in the general fund by $3,020. b.
> The general fund pays rent for two months. Which of the following is not correct? a. Rent expense should be reported in the government-wide financial statements. b. Rent expense should be reported in the general fund. c. An expenditure should be reported
> Which of the following statements is true concerning the recording of a budget? a. At the beginning of the year, debit Appropriations. b. A debit to the Budgetary Fund Balance account indicates an expected surplus. c. At the beginning of the year, debit
> Which of the following statements is correct about the reporting of governmental funds? a. Fund financial statements measure revenues and expenditures based on modified accrualaccounting. b. Government-wide financial statements measure revenues and expen
> Which of the following statements is correct about the reporting of governmental funds? a. Fund financial statements measure economic resources. b. Government-wide financial statements measure only current financial resources. c. Fund financial statement
> A citizen of the City of Townsend makes a donation of $22,000 in investments. The citizen hasstipulated that the investments be held. Any resulting income must be used to help maintain thecity’s cemetery. In which fund should this asset be reported? a. S
> The City of Havisham has a fiscal year ending December 31, Year 5. If the city were to producefinancial statements right now, the following figures would be included: – Governmental activities: Assets = $800,000, Liabilities = $300,000, and Change in Net
> A city has only one activity, its school system. The school system is accounted for within the generalfund. For convenience, assume that, at the start of 2017, the school system and the city have no assets.During the year, the city assessed $400,000 in p
> Government officials of Hampstead County ordered a computer near the end of the current fiscalyear for $6,400 for the police department. It did not arrive prior to the end of the year. At its finalmeeting of the year, the city council (the highest decisi
> When a partner sells an ownership interest in a partnership, what rights are conveyed to the newowner?
> The governmental funds of the City of Westchester report $445,000 in assets and $140,000 inliabilities. The following are some of the assets reported by this government. ∙ Prepaid items—$7,000. ∙ Cash from a bond issuance that must be spent within the sc
> Cash of $90,000 is transferred from a city’s general fund to start construction on a police station. Thecity issues a bond at its $1.8 million face value. The police station is built for $1.89 million. Prepare allnecessary journal entries for these trans
> A city orders a new computer for its general fund at an anticipated cost of $88,000. Its actual costwhen received is $89,400. Payment is subsequently made. Prepare all required journal entries forboth fund and government-wide financial statements. What i
> The board of commissioners of the City of Hartmoore adopted a general fund budget for the yearending June 30, 2017, that included revenues of $1,000,000, bond proceeds of $400,000, appropriationsof $900,000, and operating transfers out of $300,000. If th
> The City of Bagranoff holds $90,000 in cash that will be used to make a bond payment when thedebt comes due early next year. The assistant treasurer had made that decision. However, justbefore the end of the current year, the city council formally approv
> During the current year, a government buys land for $80,000. Which of the following is not true? a. The land could be reported as an asset by the business-type activities in the government-widefinancial statements. b. The land could be reported as an ass
> In 2017, the City of Coyote received a $320,000 cash grant from the state to reduce air pollution.Assume that although a special revenue fund could have been set up, the money remained in thegeneral fund. Cash was received immediately but had to be retur
> The City of Coyote mailed property tax bills for 2018 to its citizens during August 2017. Paymentscould be made early to receive a discount. The levy becomes legally enforceable on February 15,2018. All money received must be spent during 2018 or later.
> The City of Coyote mailed property tax bills for 2018 to its citizens during August 2017. Paymentscould be made early to receive a discount. The levy becomes legally enforceable on February 15,2018. All money received must be spent during 2018 or later.
> By what methods can a new partner gain admittance into a partnership?
> An art display set up for the City of Coyote was recorded within the general fund and generatedrevenues of $9,000 but had expenditures of $45,000 ($15,000 in expenses and $30,000 to buy landfor the display). The CPA firm has determined that this program
> On December 30, 2017, the City of Coyote borrowed $20,000 for the general fund on a 60-day note.In that fund, both Cash and Other Financing Sources were recorded. In the general informationabove for this city, a $30,000 overall increase was reported in t
> During 2017, the City of Coyote contracted to build a bus stop for schoolchildren costing $10,000as a special assessments project for which it collected $10,000 from affected citizens. The governmenthad no obligation in connection with this project. Both
> Fund A transfers $20,000 to Fund B. For each of the following, indicate whether the statement istrue or false and, if false, explain why. a. If Fund A is the general fund and Fund B is an enterprise fund, nothing will be shown for thistransfer on the sta
> Indicate (i) how each of the following transactions impacts the fund balance of the general fund,and its classifications, for fund financial statements and (ii) what impact each transaction has on thenet position balance of the Government Activities on t
> On December 1, 2017, a state government awards a city government a grant of $1 million to be usedspecifically to provide hot lunches for all schoolchildren. No money is received until June 1, 2018.For each of the following, indicate whether the statement
> Government officials of the City of Jones expect to receive general fund revenues of $400,000 in2017 but approve spending only $380,000. Later in the year, as they receive more information, theyincrease the revenue projection to $420,000. Officials also
> Use the transactions in problem (47) but prepare a statement of net position for the government-wide financial statements. Assume that the general fund had $180,000 in cash on the first day of the year and no other assets or liabilities. No amount was re
> The following transactions relate to the General Fund of the city of Lost Angels for the year ending December 31, 2017. Prepare a statement of revenues, expenditures, and other changes in fund balance for the general fund for the period to be included in
> The City of Gargery has a fiscal year ending December 31, Year 5. If the city were to producefinancial statements right now, the following figures would be included: – Governmental activities: Assets = $800,000, Liabilities = $300,000, and Change in Net
> What is a partnership dissolution? Does dissolution automatically necessitate the cessation of businessand the liquidation of partnership assets?
> What assets are viewed as current financial resources?
> What measurement focus is used in government-wide financial statements, and what system isapplied to determine the timing of revenue and expense recognition?
> At what point in time does a governmental fund report an expenditure?
> Fund financial statements have separate columns for each activity. Which activities are reported inthis manner?
> What are the five fund types within the governmental funds? What types of events does each ofthese report?
> What are the three categories of funds? What funds are included in each of these three?
> In applying the current financial resources measurement focus, when are liabilities recognized infund financial statements?
> What measurement focus is used in fund financial statements for governmental funds, and whatsystem is applied to determine the timing of revenue and expenditure recognition?
> What are the basic financial statements that a state or local government now produces?
> How has the dual system of financial statements impacted the financial reporting of state and localgovernments?
> If no agreement exists in a partnership as to the allocation of income, what method is appropriate?
> Why have accountability and control been so important in the traditional accounting for state andlocal government units?
> How have users’ needs impacted the development of accounting principles for state and local governmentunits?
> What is an internal exchange transaction, and how is it reported?
> In government-wide financial statements, how do intra-activity and interactivity transactions differ?How is each type of transaction reported?
> How are interfund transfers reported in fund financial statements?
> What is a special assessment project? How are special assessment projects reported?
> How is the issuance of a long-term bond reported on fund financial statements? How is the issuanceof a long-term bond reported on government-wide financial statements?
> When is a receivable recognized for property tax assessments? When is the revenue recognized?
> What are the four classifications of nonexchange revenues that a state or local government can recognize?In each case, when are revenues normally recognized?
> What are the two different ways that supplies and prepaid items can be recorded on fund financialstatements?
> What provisions in a partnership agreement can be used to establish an equitable allocation ofincome among all partners?
> How do governmental funds report capital outlay in fund financial statements? How dogovernment-wide financial statements report capital expenditures?
> What costs necessitate the reporting of an expenditure by a governmental fund?
> When is an encumbrance recorded? What happens to this balance? How are encumbrances reportedin government-wide financial statements?
> How are budget results shown in the financial reporting of a state or local government?
> Why are budgetary entries recorded in the individual funds of a state or local government?
> The general fund of a city reports assets of $300,000 and liabilities of $200,000 in the fund financialstatements. Explain what is meant by each of the following balances: fund balance—nonspendableof $40,000, fund balance—restricted of $28,000, fund bala
> What are the two major divisions reported in government-wide financial statements? What fundsare not reported in these financial statements?
> What are the four fund types within the fiduciary funds? What types of events does each report?
> What are the two fund types within the proprietary funds? What types of events does each report?
> Go to the website www.napico.com and click on “Partnership Financial Information—Click Here.”Then click on “2015 Annual Reports” to access the Form 10-K annual report for Real Estate AssociatesLimited II (Real II). Read the financial statements contained
> At what point in the accounting process does the allocation of partnership income becomesignificant?
> What are the advantages of operating a business as a partnership rather than as a corporation? Whatare the disadvantages?
> Are the subgames of a sequential game visible when the entire game is presented in strategic form? Explain.
> Do you think that IACs such as the United States should open their doors wider to the immigration of low-skilled DVC workers as a way to help the DVCs develop? Do you think that it is appropriate for students from DVC nations to stay in IAC nations to wo
