For each of the following transactions, note the fund(s) affected, and prepare appropriate journal entries. 1. General obligation bonds with a par value of $750,000 are issued at $769,000 to finance construction of a government office building. 2. A Community Block Development Grant in the amount of $450,000 is awarded for residential services within a city. 3. Upon approval of a new town band shell, the general fund transfers $500,000 to create a new fund. 4. A wealthy citizen donates $10,000,000 for city park maintenance. The principal cannot be spent. 5. Automobiles and vans for general governmental use are purchased for $375,000. 6. General fixed assets with an original cost of $300,000 sold for $30,000 at the end of their useful life. 7. Sold equipment at the end of its expected useful life. The equipment had no expected residual value when acquired (at a cost of $13,000), but it sold for $1,200. Equipment is used in general fund. 8. The general fund transfers $50,000 for an interest payment on debt. The interest payment is made.
> For nongovernmental NFP, are gifts in kind always reported as unrestricted support that increases unrestricted net assets?
> For nongovernmental NFP, how are unconditional promises to give with collections due in the next period accounted for?
> Describe a transaction that would affect the general fund and the debt service fund at the same time.
> For nongovernmental NFP, explain the difference between donor-imposed conditions and donor-imposed restrictions.
> What statements are included in a set of financial statements for nongovernmental not-for-profit entities?
> Discuss the two options that not-for-profit organizations have for recording donated fixed assets.
> The reorganization value of a firm emerging from Chapter 11 bankruptcy is used to determine the accounting of the reorganized company. Explain reorganization value as used in FASB ASC 852.
> Why do governmental entities use fund accounting? How many funds might be used by a single governmental unit? How many fund types?
> Other than FASB standards and the AICPA guide, where can you find guidance on accounting and reporting issues for colleges and universities?
> When is the AICPA college guide model used?
> Are provisions for bad debts and depreciation of hospitals reported as expenses? Explain.
> Discuss the requirements for approval of a plan of reorganization.
> 1. Contributions that are restricted by a donor to a nongovernmental not-for-profit organization are reported as a part of: a Permanently restricted net assets b Temporarily restricted net assets c Unrestricted net assets d Either permanently restricted
> Which unsecured claims have priority in a Chapter 7 liquidation case? Discuss in terms of priority ranks.
> How are net patient service revenues of hospitals measured, and in which hospital financial statement are they reported?
> Health care entities frequently provide charity care to qualified individuals. How is charity care reported in the financial statements of a hospital?
> A voluntary health and welfare organization summarizes its expenses by function, as follows: Education.......................................... $20,400 Fund-raising......................................... 11,400 Management and general.................
> 1. A university that is considered a special-purpose government: a Is generally required to follow GASB standards b Is generally required to follow FASB standards c Should refer to the AICPA Audit and Accounting Guide for governmental colleges and univer
> Are contributed services reported in the statement of activities of a nongovernmental voluntary health and welfare organization?
> How do the purchases and consumption methods of accounting for inventory differ?
> How does the presentation of an enterprise major fund differ from the presentation of an internal service major fund?
> You have been hired as trustee for the testamentary trust created by the will of George Wilson. The trust is created on April 30, 2015. (Use the information provided in P 23-3 and P 23-4.) The trust initially invests the proceeds from the estate in a che
> Which fund financial statements include internal service fund data? Which government-wide statements include internal service fund data?
> What fund financial statements are needed for an enterprise fund to meet the requirements for fair presentation in accordance with GAAP? Which government-wide statements include enterprise fund data?
> What does it mean to die intestate?
> How are enterprise and internal service funds similar? How are they different?
> Do governmental financial statements indicate whether a pension plan is fully funded? Explain.
> How many columns (not including total columns) are needed for a government-wide statement of net position of a governmental unit with a general fund, two special revenue funds, three internal service funds, four enterprise funds, and a component unit? Ex
> How does a private-purpose trust fund differ from a permanent fund?
> How might an internal service fund be financed initially? How will the financing appear in the fund financial statements?
> Jut filed a petition under Chapter 7 of the bankruptcy act in January 2016. On March 15, 2016, the trustee provided the following information about Jut’s financial affairs. REQUIRED: 1. Determine the amount expected to be available fo
> Why is it important for internal service funds to differentiate between revenues generated by interfund transactions and transactions with external parties?
> What is the GAAFR? Who creates the GAAFR?
> Under what circumstances does a firm emerging from bankruptcy qualify for fresh start reporting? Can you find an example of how a firm should report in a fresh start reporting situation?
> How are capital projects funds financed, and when would a capital projects fund be terminated?
> Because proprietary funds are accounted for in much the same manner as commercial business organizations, is it appropriate for FASB pronouncements to be used for their accounting?
> What fund types are included in the fiduciary fund category? Where are they reported in the financial statements?
> You have been hired as trustee for the testamentary trust created by the will of Jimmy Olson. The trust is created on July 22, 2015. (Use the information provided in P 23-1.) The trust initially invests the proceeds from the estate in a checking account
> How does a proprietary fund statement of cash flows differ from a commercial enterprise’s statement of cash flows?
> Cite some governmental operations that might be accounted for through an internal service fund.
> How might the enterprise fund amounts on the proprietary fund statement of net position differ from the amounts reported as “business-type activities” on the government-wide statement of net position?
> Under what circumstances will a proprietary fund be required to report segment information?
> What is the purpose of the statement of functional expenses of voluntary health and welfare organizations?
> What organization provides accounting standards for state and local governmental units? What hierarchy of authority do they use?
> What is the accounting equation for an agency fund?
> The following data are available from the City of Boulder’s financial records on September 30, 2016: a. The net change in fund balance—total governmental funds for the city is $1,408,950. b. The city purchased general fixed assets at a historical cost of
> Han filed a petition under Chapter 7 of the bankruptcy act on June 30, 2016. Data relevant to its financial position as of this date are: REQUIRED: 1. Prepare a statement of affairs assuming that the note payable and interest are secured by a mortgage
> 1. Fiduciary funds include four different types of funds. Which of the following is not one of these types? a Agency funds b Tax collection funds c Private-purpose trust funds d Pension trust funds 2. Agency funds maintain accounts for: a Liabilities b
> The postclosing trial balance for the Village of Alantown general fund at June 30, 2016, shows the following ledger account balances: Debits Cash.................................................................................................. $410,000
> Prepare the journal entries required to record the following transactions in the general fund of Rochester Township. 1. Borrowed $75,000 by issuing six-month tax anticipation notes. 2. Ordered equipment with an estimated cost of $33,000. 3. Received th
> Prepare entries in the general fund to record the following transactions and events: 1. Estimated revenues for the fiscal year were $250,000 and appropriations were $248,000. 2. The tax levy for the fiscal year, of which 99 percent is believed to be coll
> The trial balance of the general fund of Madelyn City before closing at December 31, 2013, contained the following accounts and balances: Fund balance—unassigned............................ $25,000 Estimated revenues.....................................
> A general ledger trial balance at June 30, 2013, for Millar City is as follows: Millar City uses a purchases basis in accounting for supplies. Open encumbrances are considered constrained by the highest decision-making level of the city. REQUIRED: Pre
> What are the three sections of a CAFR? Briefly identify the contents of each section.
> The following information relates to revenues and expenses for a private not-for-profit college: Tuition and Fees Total assessed......................................................................................... $2,000,000 Tuition waivers.........
> A general ledger trial balance for Any City contained the following balances at June 30, 2013, just before closing entries were made: Due from other funds.......................................... $600 Fund balance—unassigned............................
> List the required governmental fund financial statements under GASB 34. On what basis of accounting are these statements prepared?
> The following events and transactions relate to the levy and collection of property taxes for Jedville Township: March 21, 2016—Property tax bills for $2,500,000 are sent to property owners. An estimated 2 percent of the property tax levies are uncollect
> 1. The billings for transportation services provided to other governmental units are recorded by the internal service fund as: a Interfund exchanges b Intergovernmental transfers c Transportation appropriations d Operating revenues 2. Which of the follo
> List the required governmental fund and proprietary fund financial statements. On what basis of accounting are these statements prepared?
> The balance sheet of Val at June 30, 2016, contains the following items: Assets Cash............................................................... $40,000 Accounts receivable—net............................... 70,000 Inventories........................
> At the beginning of 2016, the citizens of North Ptarmigan created Share Shop, a voluntary health and welfare organization. Share receives donations of money, nonperishable groceries, and household items from contributors. The food and household items are
> List the two types of proprietary funds. What distinguishes them from each other?
> List the five types of governmental funds. What are the primary distinctions among them?
> Hol is in bankruptcy and is being liquidated by a court-appointed trustee. The financial report that follows was prepared by the trustee just before the final cash distribution: Assets Cash................................................................
> 1. Which of the following statements regarding budgetary accounting is true? a When the budget is recorded, estimated revenues are debited. b Budgetary accounts are never closed. c Encumbrance is another term for appropriation. d Budgeted revenues can be
> List the authoritative documents available to financial statement preparers and auditors related to governmental accounting and financial reporting. Which is the most authoritative?
> Does filing a case under Chapter 11 of the bankruptcy act mean that the company will not be liquidated? Discuss.
> How do nonreciprocal transfers differ from reciprocal transfers?
> What are the simplified and complete accounting equations for a governmental fund?
> How do operational accountability and fiscal accountability differ? In what context are they used?
> How does an expenditure differ from an expense? Identify the funds that report expenditures and those that report expenses.
> Identify each of the fund types described. 1. A fund that is used to report assets held in a trustee capacity for others and that cannot be used to support the government’s own programs. 2. A fund used to report any activity for which a fee is charged t
> How should assets and liabilities be measured in the accounting records of an estate?
> Perez County entered into a number of transactions for the current fiscal year. Identify the fund or funds affected by each transaction and determine how each transaction will affect the accounting equation of the particular fund. 1. Perez County issued
> For each of the following events or transactions, identify the fund or funds that will be affected. 1. A governmental unit operates a municipal pool. Costs are intended to be recovered primarily from user charges. 2. A bond offering was issued at par to
> 1. The following information pertains to Walnut Corners: 2016 governmental fund revenues that became measurable..............$16,000,000 and available in time to be used for payment of 2016 liabilities Revenues earned in 2014 and 2015 and included i
> The City of Sioux Falls entered into a number of transactions for the current fiscal year. Identify the fund or funds affected by each transaction and determine how each transaction will affect the accounting equation of the particular fund. 1. Sioux Fal
> Repeat Exercise 19-7, this time assuming that the transactions involve a proprietary activity instead of a general governmental activity. Exercise 19-7 Use transaction analysis to determine the effects of each of the following transactions in the gener
> Use transaction analysis to determine the effects of each of the following transactions in the general fund. 1. Salaries paid totaled $30,000. Additional salaries incurred, but not paid, totaled $2,500. 2. Levied property taxes of $100,000; $98,000 was
> Hal Company filed for protection from creditors under Chapter 11 of the bankruptcy act on July 1, 2016. Hal had the following liabilities at the time of filing: 10% mortgage bonds payable, secured by a building...................................$200,000
> Bax has been operating under Chapter 11 of the Bankruptcy Code for the past 15 months. On March 31, 2016, just before confirmation of its reorganization plan, Bax’s reorganization value is estimated at $3,000,000. A balance sheet for Bax prepared on the
> 1. Which of the following is considered an exchange transaction under GASB 33? a A city receives a federal grant b A bus driver collects bus fare from a rider c Property taxes are collected from a homeowner d An employer withholds state income tax from e
> 1. Depreciation expense accounts would likely be found in the a General fund b Capital projects fund c Debt service fund d Enterprise fund 2. The government-wide statements of a state government a May not be issued separately from the comprehensive annu
> 1. Which of the following items has the greatest GAAP authority under SAS 69? a GASB implementation guides b Consensus positions of GASB’s Emerging Issues Task Force c GASB statements and interpretations d FASB statements and interpretations 2. The prim
> The Fort Collins Health Center is a nongovernmental not-for-profit health care organization. During the current year, the following occurred: 1. Gross charges at established rates for services rendered to patients amounted to $102,300. The clinic had con
> For each of the following events or transactions, identify the fund or funds that will be affected. 1. A new city government establishes an employee pension program. 2. A utility department constructs a new building. 3. A truck is purchased for use at th
> Fab is being liquidated under Chapter 7 of the bankruptcy act. All assets have been converted into cash, and $374,500 cash is available to pay the following claims: Assume that all the claims are allowed and that they were timely filed. REQUIRED: 1. R
> For each of the following events or transactions, identify the fund or funds that will be affected. 1. The Board of County Commissioners approved the construction of a new town band shell. 2. A central computing center was established to handle the data
> For each of the following events or transactions, identify the fund or funds that will be affected. 1. The principal, interest, and related charges from a city’s general long-term debt bond issue will be handled in a fund established for that purpose. 2
> 1. The following revenues were among those reported by Arvida Township in 2016: Net rental revenue (after depreciation) from............................$40,000 a parking garage owned by Arvida Interest earned on investments held for.....................
> 1. Which of the following are eliminated from the financial statements under GASB 34? a General long-term debt account group b General fixed asset account group c Both a and b d None of the above 2. An expense would be reported in which of the following
> 1. Which of the following is not a governmental fund? a Special revenue fund b Debt service fund c Trust fund d General fund 2. Which of these funds generally follows the accrual basis of accounting? a General fund b Internal service fund c Debt service
> George Wilson dies on March 1, 2015, leaving a valid will. The will reads as follows: I leave my home, furnishings, remaining bank account balances and personal possessions to my wife Helen. I leave my automobile to my nephew, Dennis. I leave my stock in
> What is the distinction between equity insolvency and bankruptcy insolvency?
> A firm emerging from Chapter 11 bankruptcy that does not qualify for fresh-start reporting must still report the effect of the reorganization plan on its financial position and results of operations. How is debt forgiveness reported in the reorganized co
> Ram holds a $400,000 note receivable from Pat. It has been learned that Pat filed for Chapter 7 bankruptcy and that the expected recovery of nonsecured claims is 45¢ on the dollar. Inventory items with an estimated recoverable value of $80,000 secure Pat
> The Good Grubb Food for the Hungry Institute is a nongovernmental not-for-profit organization that provides free meals for the destitute in a large metropolitan area. Record the following transactions in the accounts of Good Grubb. 1. Cash gifts that wer
> Lop filed for relief under Chapter 11 of the bankruptcy act on January 2, 2016. A summary of Lop’s assets and equities on this date, and at June 30, 2016, follows. Estimated fair values of Lop’s assets at June 30 are a
> When can a creditors’ committee file a plan of reorganization under a Chapter 11 case?
