Question: Following are several transactions involving a

> The plaintiff, a seller of milk, had for ten years bid on contracts to supply milk to the defendant school district, and had supplied milk to other school districts in the area. On June 15, the plaintiff contracted to supply the defendant’s requirements

> Bain ordered from Marcum a carload of lumber, which he intended to use in the construction of small boats for the U.S. Navy, pursuant to contract. The order specified that the lumber was to be free from knots, wormholes, and defects. The lumber was shipp

> Farley and Trudy entered into a written contract whereby Farley agreed to sell and Trudy agreed to buy 6,000 bushels of wheat at $10.33 per bushel, deliverable at the rate of 1,000 bushels a month commencing June 1, the price for each installment being p

> On November 4, Kim contracted to sell to Lynn five hundred sacks of flour at $4 each to be delivered to Lynn by December 12. On November 27, Kim shipped the flour. By December 5, when the shipment arrived, containing only 450 sacks, the market price of f

> Johnson, a manufacturer of air-conditioning units, made a written contract with Maxwell to sell to Maxwell forty units at a price of $200 each and to deliver them at a certain apartment building owned by Maxwell for installation by Maxwell. On the arriva

> Benny and Sheree entered into a contract for the sale of one hundred barrels of flour. No mention was made of any place of delivery. Thereafter, Sheree demanded that Benny deliver the flour at her place of business, and Benny demanded that Sheree come an

> Smith, having contracted to sell to Beyer thirty tons of described fertilizer, shipped to Beyer by carrier thirty tons of fertilizer that he stated conformed to the contract. Nothing was stated in the contract as to time of payment, but Smith demanded pa

> ALPAC and Eagon are corporations that import and export raw logs. In April, Setsuo Kimura, ALPAC’s president, and C.K. Ahn, Eagon’s vice president, entered into a contract for ALPAC to ship about 15,000 cubic meters of logs between the end of July and th

> Neptune Research & Development, Inc. (the buyer), manufacturer of solar-operated valves used in scientific instruments, saw advertised in a trade journal a hole-drilling machine with a very high degree of accuracy, manufactured and sold by Teknics Indust

> Adams, who reads with difficulty, arranged to borrow $2,000 from Bell. Bell prepared a note, which Adams read laboriously. As Adams was about to sign it, Bell diverted Adams’s attention and substituted the following paper, which was identical to the note

> Frederick Manufacturing Corporation ordered 500 dozen units of Import Traders’ rubber pads for $2,580. The order indicated that the pads should be “as soft as possible.” Import Traders delivered the rubber pads to Frederick Manufacturing on November 19.

> Can-Key Industries, Inc., manufactured a turkey-hatching unit, which it sold to Industrial Leasing Corporation (ILC), which leased it to Rose-A-Linda Turkey Farms. ILC conditioned its obligation to pay on Rose-A-Linda’s acceptance of the equipment. Rose-

> The plaintiff, a German wine producer and exporter, contracted to ship 620 cases of wine to the defendant, a distributor in North Carolina. The contract was silent as to the shipment destination. During the next several months, the defendant called repea

> Joc Oil bought a cargo of fuel oil for resale. The certificate from the foreign refinery stated the sulfur content of the oil was 0.5 percent. Joc Oil entered into a written contract with Con Ed for the sale of this oil. The contract specified a sulfur c

> On March 17, Peckham bought a new car from Larsen Chevrolet for $16,400. During the first one and one-half months after the purchase, Peckham discovered that the car’s hood was dented, its gas tank contained no baffles, its emergency brake was inoperable

> Deborah McCullough bought a new car from Bill Swad Chrysler, Inc. The car was protected by both a limited warranty and an extended warranty. McCullough immediately encountered problems with the automobile’s brakes, transmission, and air-conditioning and

> In April F. W. Lang Company (Lang) purchased an ice cream freezer and refrigeration compressor unit from Fleet for $2,160. Although the parties agreed to a written installment contract providing for an $850 down payment and eighteen installment payments,

> Tammie contracted with Kristine to manufacture, sell, and deliver to Kristine and put in running order a certain machine. After Tammie set up the machine and put it in running order, Kristine found it unsatisfactory and notified Tammie that she rejected

> Steven offered to sell his used automobile to Benito for $7,600 cash. Benito agreed to buy the car, gave Steven a check for $7,600, and drove away in the car. The next day, Benito sold the car for $8,000 to José, a good faith purchaser. The bank returned

> Charlotte, the owner of a new Cadillac automobile, agreed to loan the car to Ellen for the month of February while she (Charlotte) went to Florida for a winter vacation. It was understood that Ellen, who was a small-town Cadillac dealer, would merely pla

> Thornton fraudulently represented to Daye that he would obtain for her a new car to be used in Daye’s business for $17,800 from Pennek Motor Company. Daye thereupon executed her personal check for $17,800 payable to the order of Pennek Motor Company and

> Roy Rand executed and delivered the following note to Sue Sims: “Chicago, Illinois, June 1, 2015; I promise to pay to Sue Sims or bearer, on or before July 1, 2015, the sum of $7,000. This note is given in consideration of Sims’s transferring to the unde

> What is the difference between two types of line-item budgeting approaches— incremental budgeting and zero-based budgeting?

> Are governments and not-for-profit organizations required to prepare budgets?

> The new administrator for the art museum was concerned that the museum’s collection of rare 17th-century American porcelain was not recognized on the financial statements. Explain to the administrator why the collection might not be recognized on the fin

> What is the difference between an unconditional and a conditional pledge? How are the two pledges reported?

> What is the value of a statement of functional expenses? What is the FASB and the Financial Reporting Executive Committee’s position on who should prepare a statement of functional expenses? Explain why you believe they have taken the positions they have

> What are the three categories into which NFPs must classify their net assets? Describe which net assets are included in each category. Would board-designated net assets be reported as temporarily restricted net assets? Explain your answer.

> Discuss how characteristics of not-for-profit organizations and public sector organizations are similar and how they differ.

> What are joint costs and how are joint costs recorded?

> This chapter divides not-for-profit entities into four categories that align with accounting and auditing standards. What are the four categories and what types of entities are included in each?

> A small city has been awarded a federal grant, and the finance director is curious as to what costs might be allowable under the grant. To what source could the finance officer go to determine what costs are allowable under federal grants?

> In partnership with Jefferson County, Mound City recently established a Native American Heritage Center and Museum, organized as a tax-exempt not-for-profit organization. Although the facility does not charge admission, signs at the information desk in t

> How might activity-based costing (ABC) be useful in a government setting?

> What criteria must be met before a not-for-profit organization can record donated services? If the criteria are met, how should donated services be recorded? Give examples to support your answer.

> Explain the GASB’s role in developing standards for SEA reporting.

> What are the three broad categories of service efforts and accomplishments (SEA) measures?

> The Art League is a not-for-profit organization dedicated to promoting the arts within the community. There are two programs conducted by the Art League: (1) exhibition and sales of members’ art (referred to as Exhibition) and (2) Commu

> You have recently started working as the controller for a small county. The county is preparing its financial statements for the comprehensive annual financial report and you have been given the following statement for review. You know that in addition t

> The Shannon Community Kitchen provides hot meals to homeless and low-income individuals and families; it is the organization’s only program. It is the policy of the community kitchen to use temporarily restricted resources for which the purpose has been

> The Atkins Museum recently hired a new controller. His experience with managerial accounting and strong communication skills were extremely attractive. The new controller sent each member of the Board of Trustees’ Finance Committee a se

> The following information has been provided for the City of Elizabeth for its fiscal year ended June 30, 2017. The information provided relates to financial information reported on the city’s statement of net position and its total governmental funds bal

> Consider the following scenarios relating to activities that include a fund-raising appeal: 1. The Green Group’s mission is to protect the environment by increasing the portion of waste recycled by the public. The group conducts a door-to-door canvass of

> In November of 2011, the FASB announced two new projects related to financial reporting of not-for profit organizations. One of the projects was a research project that was subsequently dropped from the agenda; as a result, the standard-setting project w

> he GASB defines a financial reporting entity as the primary government and the entities for which the primary government is financially accountable. Following is a list of entities being considered for classification as primary governments. _____1. Wasec

> Choose the best answer. 1. The members of the Museum Board of the City of Springfield are appointed by the City of Springfield City Council, which has agreed to finance any operating deficits of the museum. Under these conditions: a. The museum is a prim

> Choose the best answer. 1. Which of the following organizations would be considered a nongovernmental not-for-profit organization? a. An organization that provides shelter for men who have been victims of domestic violence and has been designated as a no

> The following balances come from the trial balance of Wilson State College as of the end of the 2017 fiscal year. Required: a. Prepare a statement of revenues, expenses, and changes in net position for the year ended June 30, 2017, in good form. See I

> The following is the pre closing trial balance for Allen University as of June 30, 2017. Additional information related to net assets and the statement of cash flows is also provided. Additional Information N et assets released from temporary restri

> The Statement of Net Position of South State University, a governmentally owned university, as of the end of its fiscal year June 30, 2016, follows. The following information pertains to the year ended June 30, 2017: 1. South billed tuition and fees

> Elizabeth College, a small private college, had the following transactions in fiscal year 2017. 1. Gross tuition and fees revenue totaled $5,600,000. Tuition waivers and scholarships of $346,000 were granted. Of the tuition waivers granted $276,400 was f

> Steiner College’s statement of financial position for the year ended June 30, 2016, is presented here. Steiner is a private college. The following transaction information (amounts in thousands) pertains to the year ended June 30, 20

> Choose the best answer. 1. Colleges and universities look to which standard-setting body for GAAP? a. The GASB. b. The FASB. c. The NACUBO. d. It depends on whether the entity is public, private, or for-profit. 2. Which of the following statements is pr

> For several years, Baytown Rehabilitative Camp for Disabled Children (hereafter referred to as the camp) has applied for an operating grant from the Baytown Area United Way. As the finance adviser for the local United Way allocation panel, it is your res

> INVOLVE was incorporated as a not-for-profit voluntary health and welfare organization on January 1, 2017. During the fiscal year ended December 31, 2017, the following transactions occurred. 1. A business donated rent-free office space to the organizati

> The statement of activities for the ECE Children’s Learning Center for fiscal year 2017, prepared by a newly hired budget employee with no NFP experience, is presented on the following page. Required: a. Because you are taking a not

> For each of the independent transactions listed in the left-hand column below, indicate which of the revenue or contribution classifications apply by choosing one or more of the letters from the listed items in the right-hand column. Choose all that appl

> The Kare Counseling Center was incorporated as a not-for-profit voluntary health and welfare organization 10 years ago. Its adjusted trial balance as of June 30, 2017, follows. 1. Salaries and fringe benefits were allocated to program services and su

> The Center to Advance Student Learning has presented its statement of financial position for the 2017 fiscal year. CENTER TO ADVANCE STUDENT LEARNING Statement of Financial Position As of December 31, 2017 Assets Cash and cash equi

> Section A provides a list of transactions or events that occurred during the year, followed by Section B, a list of the possible effects each transaction or event has on adjusting net position accounts at yearend, assuming that all temporary accounts hav

> Indicate whether each of the following donated services situations would require a journal entry for contribution revenue and a related expense or asset by circling Y for yes or N for no. Y N 1. Volunteers worked as sales assistants in a not-for-profit h

> As part of your audit firm’s quality control policies, it maintains a record of continuing profession education (CPE) taken by professional staff members. Following is information on some of the classes, sessions, workshops, and conferences that the audi

> Choose the best answer. 1. Evaluation of government financial performance is important for which of the following reasons? a. Credit analysts use it to determine whether bonds should be issued. b. Investors use it to make decisions about bond investments

> You work for an auditing firm that is performing a local government audit. The government has received federal grant funding, and the audit manager on the engagement has asked you to perform the necessary research and review the following costs charged t

> Choose the best answer. 1. Jan and Dean decided to form a charitable organization, I Love Rock N Rollers, to provide funding to assist former rock and roll group members who have become homeless. They are planning to hold a “mini-Woodstock” event to rais

> The complexity and uniqueness of the federal government makes it difficult to conduct a meaningful analysis of its financial condition. However, conducting a financial statement analysis does provide a better understanding of the federal government. To a

> Congress authorized the Flood Control Commission to start operations on October 1, 2017. Required: a. Record the following transactions in general journal form as they should appear in the accounts of the Flood Control Commission. Record all expenses in

> The trial balance of the Federal Antiquities Administration, as of August 31, 2017, follows: Required: Prepare a statement of budgetary resources for the 11 months ended August 31, 2017, assuming that goods on order at the end of the prior year amounte

> The Rural Assistance Agency operates three major programs as responsibility centers—the Food Bank, Housing Services, and Credit Counseling. Clients pay a fee for services on a sliding scale based on income. The following information is drawn from the acc

> Use the data from Problem 17–17 for this assignment. In completing the assignment assume that all assets are entity assets, F und Balance with Treasury is an intra governmental asset, and all other assets are governmental. Also, assume that Other Appro

> One amount is missing in the following trial balance of proprietary accounts, and another is missing from the trial balance of budgetary accounts of the Save Our Resources Commission of the federal government. This trial balance was prepared before budge

> Choose the best answer. 1. Which of the following represents one of the roles of the Government Accountability Office in federal financial accounting and reporting? a. Providing an independent assessment of the financial reports of the federal governmen

> You have recently started work as the controller for a small community hospital. The financial statements for the just completed fiscal year have been provided for your review. Required: After reviewing the statement you realize that it is not in th

> The Edwards Lake Community Hospital balance sheet as of December 31, 2016, follows. Required: a. Record in general journal form the effect of the following transactions during the fiscal year ended December 31, 2017, assuming that Edwards Lake Commun

> The City of Fort Collins, Colorado, has adopted the budgeting for outcomes entrepreneurial budgeting method as a basis for its budgeting process. Required: Locate the city’s most recent budget materials and answer the following questions: a. Why has the

> The following is the pre-closing trial balance for Christina Rehabilitation Hospital as of September 30, 2017. Required a. Prepare a statement of operations and a statement of changes in net assets for the year ended September 30, 2017. Not included

> During 2017, the following selected events and transactions were recorded by Milos County Hospital. 1. Gross charges for hospital services, all charged to accounts and notes receivable, were as follows: Patient service revenues………………………………………….$1,664,90

> During its current fiscal year, Evanston General Hospital, a not-for-profit health care organization, had the following revenue-related transactions (amounts summarized for the year). 1. Services provided to inpatients and outpatients amounted to $9,600,

> The Kyle Sports Medicine facility is a not-for-profit health care facility that is trying to determine what transaction information should be included in its calculation of the performance indicator it uses to report its results of operations. Indicate w

> Following are several unrelated transactions involving a hospital. 1. The hospital has a contractual agreement with a lender requiring that $500,000 in cash be set aside to meet its future debt payment. 2. The hospital accrued $1,500,000 in patient servi

> Choose the best answer. 1. The AICPA Audit and Accounting Guide Health Care Entities is considered category b authoritative guidance that can be used by which of the following? a. A business-type government hospital. b. A not-for-profit hospital. c. A fo

> Information from the 2012 Form 990 and the 2013 annual report for Feeding America , follows. Although the Form 990 indicates it is for 2012, it is actually for the period July 1, 2012, to June 30, 2013, the same time period as the 2013 annual report. Use

> The Silverton Symphony Orchestra Hall is a well-established not-for-profit organization exempt under IRC Sec. 501(c)(3) that owns a facility that is home to the local symphony orchestra. Its mission is to increase access to the arts for the community of

> The Let’s Read organization is a public charity under IRC Sec. 501(c)(3). It had total support of the following: United Way support………………………………………….$ 10,000 Grant from the state……………………………………………25,000 Grant from the city………………………………………………10,000 Con

> You are a governmental accountant for a large municipality, and you have recently been assigned to the budget office and charged with building a better budget document—one that will be of the highest quality, so that citizens and others with an interest

> The midsize City of Orangeville funds an animal control program intended to minimize the danger stray dogs pose to people and property. The program is under scrutiny because of current budgetary constraints and constituency pressure. An animal control wa

> The City of Ashcroft has produced a Service Efforts and Accomplishments report for the past four years in an attempt to answer the question, “How are we doing?” for its citizens. Reproduced here is an excerpt from the

> The City of Manhattan, Kansas, prepares an annual Budget Book, a comprehensive document that includes a citywide budget, as well as departmental budgets. The city has received the GFOA Distinguished Budget Award for more than 25 years. Following are grap

> The police chief of the Town of Meridian submitted the following budget request for the police department for the forthcoming budget year 2017–18. Upon questioning by the newly appointed town manager, a recent masters graduate with

> Choose the best answer. 1. Budgets of government entities: a. Are integrated with the financial accounting system. b. Enable governments to demonstrate compliance with laws and to communicate performance effectiveness. c. Are adopted by governments after

> The United States Office of Management and Budget (OMB) provides guidance on the allow ability of costs under federal grant agreements in Uniform Administrative Requirements, Cost Principles, and Audit Requirements for Federal Awards. Following is a lis

> The City of Greeley, Colorado’s, fire department, prepares annual Performance Measures. Following are excerpts from the 2013 fire department performance report. Required: a. Examine the following performance report. In what areas did t

> Following is the audit report for the City of Prairie View. Citizens of Prairie View: Split Responsibility for Financial Statements We have audited the accompanying financial statements of the City of Prairie View (the City) as of and for the year ended

> Choose the best answer. 1. Under the hierarchy of GAAP for a state and local government, which of the following has the highest level of authority? a. AICPA Practice Bulletins if specifically made applicable to state and local governments by the AICPA (a

> Collier County had the following federal award activity during the most recent fiscal year: Required: a. Based on size, which programs would be considered Type A programs? Type B programs? b. Based on the information provided above, list any low-risk

> You are the finance director of White Rock City. Your current auditor informs you that he is retiring and selling his auditing practice. When you seek his advice regarding the hiring of the accounting firm that is currently helping to integrate a new acc

> Use Illustration 14–3 as a guide in completing this exercise. ______1. Fredericksburg Chamber of Commerce ______2. American Diabetes Association ______3. American Legion ______4. American Museum of Natural History ______5. American Institute of Certified

> Caring Community Hospital, a not-for-profit hospital, recorded the following transactions. 1. Received $20 as co-pay from a patient for an out-patient visit. Billed $500 to insurance. 2. Gift shop sales amounted to $1,500. 3. Citizen’s Health Insurance p

> Gail McCook, the administrative assistant of a local CPA firm, merged the files listing GAAS standards and GAGAS standards. Because the firm performs both GAAS and GAGAS audits, it is important to identify which standards are applicable to which audits.

> Following is a list of a number of accounts used by federal agencies. Required: For each of the accounts listed indicate in Column A whether the account is a proprietary account (P) or a budgetary account (B). In Column B indicate whether the account