Fixed assets purchased from general fund revenue were received. What account, if any, should have been debited in the general fund? None. Fixed Assets. Expenditures. Fund Balance—Unassigned.
> Ken Lumas started his own consulting firm, Lumas Consulting, on June 1, 2014. The trial balance at June 30 is as follows. In addition to those accounts listed on the trial balance, the chart of accounts for Lumas also contains the following accounts: Ac
> The required steps in the accounting cycle are listed in random order below. List the steps in proper sequence. (a) Prepare a post-closing trial balance. (b) Prepare an adjusted trial balance. (c) Analyze business transactions. (d) Prepare a trial balanc
> The Sequel Theater Inc. was recently formed. It began operations in March 2014. The Sequel is unique in that it will show only triple features of sequential theme movies. On March 1, the ledger of The Sequel showed Cash $16,000; Land $38,000; Buildings (
> This trial balance of Swisher Co. does not balance. Each of the listed accounts has a normal balance per the general ledger. An examination of the ledger and journal reveals the following errors: 1. Cash received from a customer on account was debited
> This is the trial balance of Solis Company on September 30. The October transactions were as follows. Oct. 5 Received $1,300 in cash from customers for accounts receivable due. 10 Billed customers for services performed $5,100. 15 Paid employee sal
> Foyle Architects incorporated as licensed architects on April 1, 2014. During the first month of the operation of the business, these events and transactions occurred: Apr. 1 Stockholders invested $18,000 cash in exchange for common stock of the corp
> Friendley’s Miniature Golf and Driving Range Inc. was opened on March 1 by Dean Barley. These selected events and transactions occurred during March. Mar. 1 Stockholders invested $50,000 cash in the business in exchange for common stock of the corpor
> Cindy Braun created a corporation providing legal services, Cindy Braun Inc., on July 1, 2014. On July 31 the balance sheet showed Cash $4,000; Accounts Receivable $2,500; Supplies $500; Equipment $5,000; Accounts Payable $4,200; Common Stock $6,200; and
> Nina Finzelberg started her own consulting firm, Finzelberg Consulting Inc., on May 1, 2014. The following transactions occurred during the month of May. May 1 Stockholders invested $15,000 cash in the business in exchange for common stock. 2 Paid $
> On April 1, DeDonder Travel Agency Inc. was established. These transactions were completed during the month. 1. Stockholders invested $30,000 cash in the company in exchange for common stock. 2. Paid $900 cash for April office rent. 3. Purchased office e
> The bookkeeper for Ginger’s dance studio made the following errors in journalizing and posting. 1. A credit to Supplies of $600 was omitted. 2. A debit posting of $300 to Accounts Payable was inadvertently debited to Accounts Receivable
> A friend of yours, Sue Yaeger, recently completed an undergraduate degree in science and has just started working with a biotechnology company. Sue tells you that the owners of the business are trying to secure new sources of financing which are needed i
> The income statement for the Four Oaks Golf Club Inc. for the month ended July 31 shows Service Revenue $16,000; Salaries and Wages Expense $8,400; Maintenance and Repairs Expense $2,500; and Income Tax Expense $1,000. The statement of retained earnings
> Condensed balance sheet and income statement data for Sadecki Corporation are presented here and on the next page. Instructions: Compute these values and ratios for 2013 and 2014. (a) Earnings per share. (b) Working capital. (c) Current ratio. (d) Debt
> Here and on page 84 are financial statements of Ogleby Company. OGLEBY COMPANY Income Statement For the Year Ended December 31, 2014 Net sales………………………………………………………………. $2,218,500 Cost of goods sold ……………………………………………………. 1,012,400 Selling and administrati
> Comparative financial statement data for Bosch Corporation and Fielder Corporation, two competitors, appear below. All balance sheet data are as of December 31, 2014. Instructions: (a) Comment on the relative profitability of the companies by computing
> Merando Corporation was formed on January 1, 2014. At December 31, 2014, Bill Jensen, the president and sole stockholder, decided to prepare a balance sheet, which appeared as follows. Bill willingly admits that he is not an accountant by training. He i
> Presented below is selected financial information for Wenger Corporation for December 31, 2014. Instructions: (a) Determine which items should be included in a statement of cash flows and then prepare the statement for Wenger Corporation. (b) Comment on
> On June 1, Hightower Service Co. was started with an initial investment in the company of $22,100 cash. Here are the assets, liabilities, and common stock of the company at June 30, and the revenues and expenses for the month of June, its first month of
> Presented below are five independent situations. (a) Three physics professors at MIT have formed a business to improve the speed of information transfer over the Internet for stock exchange transactions. Each has contributed an equal amount of cash and
> The financial statements of Zetar plc are presented in Appendix C. The company’s complete annual report, including the notes to its financial statements, is available in the Investors section at www.zetarplc.com. Instructions: Visit Zetar’s corporate we
> Under IFRS, do the definitions of revenues and expenses include gains and losses? Explain.
> Compare and contrast the rules regarding revenue recognition under IFRS versus GAAP.
> The required steps in the accounting cycle are listed in random order below. List the steps in proper sequence. (a) Prepare a post-closing trial balance. (b) Prepare an adjusted trial balance. (c) Analyze business transactions. (d) Prepare a trial balanc
> The financial statements of Zetar plc are presented in Appendix C. The company’s complete annual report, including the notes to its financial statements, is available in the Investors section at www.zetarplc.com. Instructions: Describe in which stateme
> The financial statements of Zetar plc are presented in Appendix C. The company’s complete annual report, including the notes to its financial statements, is available in the Investors section at www.zetarplc.com. Instructions: Identify five differences
> The statement of financial position for Ruiz Company includes the following accounts (in British pounds): Accounts Receivable £12,500; Prepaid Insurance £3,600; Cash £15,400; Supplies £5,200; and Debt Investments (short-term) £6,700. Prepare the current
> The following information is available for Cole Bowling Alley at December 31, 2014. Prepare a classified statement of financial position; assume that $13,900 of the notes payable will be paid in 2015. Buildings Accounts Receivable Prepaid Insurance
> Widmer Company recently received the following information related to the company’s December 31, 2014, statement of financial position (in Swiss francs). Prepare the assets section of the company’s classified statemen
> The financial statements of Zetar plc are presented in Appendix C. The company’s complete annual report, including the notes to its financial statements, is available in the Investors section at www.zetarplc.com. Instructions: Visit Zetar’s corporate we
> Discuss the potential advantages and disadvantages that countries outside the United States should consider before adopting regulations, such as those in the Sarbanes-Oxley Act, that increase corporate internal control requirements.
> Describe some of the issues the SEC must consider in deciding whether the United States should adopt IFRS.
> The February 13, 2010, issue of the Wall Street Journal includes an article by Scott Thurm entitled “For Some Firms, a Case of ‘Quadrophobia’.” Instructions: Read the article and answer the following. (a) What method did the study’s authors use to deter
> The financial statements of The Hershey Company are presented in Appendix B, following the financial statements for Tootsie Roll in Appendix A. Instructions: (a) Identify two accounts on Hershey’s balance sheet that provide evidence that Hershey uses ac
> The income statement for the Four Oaks Golf Club Inc. for the month ended July 31 shows Service Revenue $16,000; Salaries and Wages Expense $8,400; Maintenance and Repairs Expense $2,500; and Income Tax Expense $1,000. The statement of retained earnings
> In alphabetical order below are balance sheet items for Burnett Company at December 31, 2014. Prepare a balance sheet following the format of Illustration 1-7 (page 14). Accounts payable…………………. $65,000
> How is interest on long-term debt accounted for in the debt service fund?
> Which governmental funds use operating budgets? Which use capital budgets?
> The initial transfer of cash from the general fund to establish an internal service fund requires the general fund to credit Cash and debit Accounts Receivable—Internal Service Fund. Transfers Out. Budgetary Fund Balance—Assigned for Enc
> In what circumstances would a governmental unit use a special revenue fund rather than a general fund?
> Required: Using the requirements of GASB 33, classify each of the following independent transactions for the community of Fair Lake into the proper category of revenue presented in the right-hand column. Transactions Types of Revenue A. Derived
> Match the items in the left-hand column with the descriptions/explanations in the right-hand column. Items Descriptions/Explanations A. Trust and agency funds. B. Fiscal and accounting entities of a government. C. Basis of accounting used by pr
> The general fund agrees to lend the enterprise fund $2,000 for three months. How is this interfund loan reported on the general fund’s financial statements?
> Where is an interfund transfer reported on the general fund’s financial statements?
> When is the expenditure for inventories recognized under the purchase method? Under the consumption method?
> Why do some governmental units not report small amounts of supply inventories in their balance sheets?
> Why do some governmental units not report small amounts of supply inventories in their balance sheets?
> When are property taxes recognized as revenue in the general fund?
> What is the basis of accounting in the proprietary funds?
> Which of the two, the modified accrual basis or the accrual basis, is used for funds for which expendability is the concern? Why?
> Explain how an expenditure may be classified by (1) function, (2) activity, and (3) object within a governmental unit’s financial statements.
> What is meant by budgetary accounting? Explain the accounting for expected revenue and anticipated expenditures.
> What are the major differences between a special revenue fund and an enterprise fund?
> Compare the modified accrual basis with the accrual basis of accounting.
> What are the nine funds that local and state governments generally use? Briefly state the purpose of each fund.
> What is a fund? How does a fund receive resources?
> Refer to the information in problem 16-17. Assume the following cash amounts were received during the months of July, August, and September from the sale of DSV Partnership’s noncash assets: July …â€&brvba
> The DSV Partnership decided to liquidate as of June 30, 20X5. Its balance sheet as of this date follows: Additional Information: The personal assets (excluding partnership loan and capital interests) and personal liabilities of each partner
> The Pen, Evan, and Torves Partnership has asked you to assist in winding-up its business affairs. You compile the following information. The partnership’s trial balance on June 30, 20X1, is The partners share profits and l
> Select the correct answer for each of the following questions. (Note: The following information is for questions 1, 2, and 3.) The balance sheet for the partnership of Joan, Charles, and Thomas, whose shares of profits and losses are 40, 50, an
> On January 1, 20X1, partners Art, Bru, and Chou, who share profits and losses in the ratio of 5:3:2, respectively, decide to liquidate their partnership. The partnership trial balance at this date follows: The partners plan a program of piecemeal conv
> The CDG Carlos, Dan, and Gail Partnership has decided to liquidate as of December 1, 20X6. A balance sheet on the date follows: Additional Information: Each partner’s personal assets (excluding partnership capital interests) and pe
> Partnership involves an association between two or more persons to carry on a business as co-owners for profit. Items 1 through 10 relate to partnership agreements. The statement of facts for Parts A and B are followed by numbered sentences that
> The following information relates to actual results from Central Town’s general fund for the year ended December 31, 20X1: • Other cash receipts include a county grant of $100,000 for a specified purpose, of which
> Mattville’s general fund had several interfund activities during the fiscal year ended June 30, 20X9 (see the left-hand column of the following table). The right-hand column lists the types of interfund activities that occur in state an
> DeKalb City Council approved and adopted its 20X2 budget that contained the following amounts: During 20X2, various transactions and events occurred that affected the general fund. Required: For items 1 through 39, indicate whether the item shou
> Refer to the data in exercise E16-8. During the liquidation process for the APB Partnership, the following events occurred: During the first month of liquidation, noncash assets with a book value of $85,000 were sold for $65,000, and $21,000 of the l
> Give the term(s) that is (are) described in each of the following numbered statements. This is the set of financial statements that presents the governmental unit’s infrastructure assets and long-term debt. A t the present time, this body has the aut
> Adams, Peters, and Blake share profits and losses for their APB Partnership in a ratio of 2:3:5. When they decide to liquidate, the balance sheet is as follows: Liquidation expenses are expected to be negligible. No interest accrues on loans with part
> Refer to the facts in Problem 16-15. The partners have decided to liquidate their partnership by installments instead of accepting the $100,000 offer. Cash is distributed to the partners at the end of each month. A summary of the liquidation transactions
> Which of the following accounts of a governmental unit is credited when taxpayers are billed for property taxes? Estimated Revenue. Revenue. Appropriations. Fund Balance—Assigned for Encumbrances.
> Nelson, Osman, Peters, and Quincy have decided to terminate their partnership because of recurrent arguments among the partners. The partnership’s balance sheet when they decide to wind up follows: During the winding-up of the p
> The postclosing trial balance of the general fund of the town of Pine Ridge on December 31, 20X1, is as follows: Additional Information: Related to 20X2 Estimated revenue consisted of property taxes, $1,584,000 from a tax levy of $1,600,000 of which 1
> Partners Maness and Joiner have decided to liquidate their business. The ledger shows the following account balances: Maness and Joiner share profits and losses in an 8:2 ratio. During the first month of liquidation, half the inventory was sold for $40
> The following trial balances were taken from the accounts of Omega City’s general fund before the books had been closed for the fiscal year ended June 30, 20X2: Additional Information: The estimated taxes receivable for the year end
> After working for in the Kitchen remodeling business for several years, Terry and Phyllis decided to go into business for themselves and formed the Kitchens Just for You Partnership. Three years ago, they admitted Connie as a partner and recognized goodw
> The following information was abstracted from the accounts of the general fund of the City of Noble after the books had been closed for the fiscal year ended June 30, 20X2. Additional Information: The budget for the fiscal year ended June 30, 20X
> When Alice and Betty decided to incorporate their partnership, its trial balance was as follows: The partnership’s books will be closed, and new books will be used for A & B Corporation. The following additional information is ava
> Explain the difference between an interfund service provided and used and an interfund transfer. Give examples of each.
> Leonard and Michelle have asked you to prepare their statement of changes in net worth for the year ended August 31, 20X3. They have prepared the following comparative statement of financial condition based on estimated current values as required by ASC
> How are taxpayer-assessed income and sales taxes recognized in the general fund? Why?
> Select the correct answer for each of the following questions. (Note: The following information is for questions 1, 2, and 3.) The balance sheet for the partnership of Joan, Charles, and Thomas, whose shares of profits and losses are 40, 50, an
> Refer to the preclosing trial balance in Exercise 17-10. Assume that the balances on December 31, 20X0, were as follows: Required: Prepare a general fund–only statement of revenues, expenditures, and changes in fund balance for fis
> What are the main differences between the lapsing and nonlapsing methods of accounting for encumbrances outstanding at the fiscal year-end? What are the differences in accounting between the lapsing and nonlapsing methods when accounting for the actual e
> The preclosing trial balance at December 31, 20X1, for Lone Wolf’s general fund follows. Lone Wolf uses the purchase method of accounting for inventories and the lapsing method of accounting for encumbrances. Required:
> Not all governmental funds need to be separately presented on the governmental funds financial statements. What are the two tests for determining major governmental funds for which separate disclosure is required?
> Benson City had the following transactions involving resource outflows from its general fund for the year ended June 30, 20X8: During March 20X8, the general fund transferred $150,000 to a capital projects fund to help pay for the construction
> What are the primary differences between a permanent fund (governmental) and a private-purpose trust fund (fiduciary)?
> Gilbert City had the following transactions involving resource inflows into its general fund for the year ended June 30, 20X8: The general fund levied $2,000,000 of property taxes in July 20X7. The city estimated that 2 percent of the levy wou
> How are the proceeds from a bond issue accounted for in governmental funds? Where are these proceeds reported on the governmental funds’ statement of revenues, expenditures, and changes in fund balance?
> Prepare journal entries for Iron City’s general fund for the following, including any adjusting and closing entries on December 31, 20X1: Acquired a three-year fire insurance policy for $5,400 on September 1, 20X1. Ordered new furniture for the ci
> What financial statements must be prepared for the governmental funds? For the enterprise funds?
> Belle Valley incurred $100,000 of salaries and wages for the month ended March 31, 20X2. How should this be recorded on that date? Debit Credit a. Expenditures-Salaries and Wages Vouchers Payable 100,000 100,000 b. Salaries and Wages Expense 100,0
> Georgetown purchased supplies on August 8, 20X2, for $3,600. At the fiscal year-end on September 30, the inventory of supplies was $2,800. Required: Assume that Georgetown uses the consumption method of accounting for inventories. (1) Pr
> The financial reports of governmental entities must provide footnote disclosure of the deposit and investment risks the entity faces. GASB 40 amended GASB 3. The GASB requires disclosures of (1) the nature of the deposits and of investment risks the gov
> The City of Batavia ordered new computer equipment for $21,000 on November 3, 20X2. The equipment had not been received by December 31, 20X2, Batavia’s fiscal year-end. Required: Assume that the city has a policy that outstanding encumbra
> W hich of the following statements is correct regarding comparability of governmental financial reports? Comparability is not relevant in governmental financial reporting. Differences between financial reports should be due to substantive di
> Interperiod equity is an objective of financial reporting for governmental entities. According to the Governmental Accounting Standards Board, is interperiod equity fundamental to public administration? Is it a component of accountability? Fundame
> Encumbrances outstanding at year-end in a state’s general fund should be reported as a Liability in the general fund. Fund balance designation in the general fund. Fund balance reserve in the general fund. Liability in the gen
> For the budgetary year ending December 31, 20X6, Johnson City expects the following inflows of resources in its general fund: In the budgetary entry, what amount should Johnson City record for estimated revenues? $9,000,000 $9,500,000 $10,
