Question: Joc Oil bought a cargo of fuel

> James contracts to make repairs to Betty’s building in return for Betty’s promise to pay $12,000 on completion of the repairs. After partially completing the repairs, James is unable to continue. Betty refuses to pay James and hires another builder, who

> Donna gives Peter a check for $3,000 in return for a desktop computer. The check is dated December 2. Peter transfers the check for value to Howard on December 14, and Howard deposits it in his bank on December 20. In the meantime, Donna has discovered t

> On March 1, Joseph sold to Sandra fifty acres of land in Oregon that Joseph at the time represented to be fine black loam, high, dry, and free of stumps. Sandra paid Joseph the agreed price of $140,000 and took from Joseph a deed to the land. Sandra subs

> In which of the following situations is specific performance available as a remedy? (a) Mary and Anne enter into a written agreement under which Mary agrees to sell and Anne agrees to buy for $100 per share 100 shares of the 300 shares outstanding of th

> Louis leased a building to Pam for five years at a rental of $1,000 per month. Pam was to deposit $10,000 as security for performance of all her promises in the lease, which was to be retained by Louis in case of any breach on Pam’s part. Pam defaulted i

> Stuart contracts to act in a comedy for Charlotte and to comply with all theater regulations for four seasons. Charlotte promises to pay Stuart $1,800 for each performance and to allow Stuart one benefit performance each season. It is expressly agreed “S

> Sharon contracted with Jane, a shirtmaker, for 1,000 shirts for men. Jane manufactured and delivered 500 shirts, for which Sharon paid. At the same time, Sharon notified Jane that she could not use or dispose of the other 500 shirts and directed Jane not

> Daniel agreed to erect an apartment building for Steven for $12 million, and that Daniel would suffer a deduction of $12,000 per day for every day of delay. Daniel was twenty days late in finishing the job, losing ten days because of a strike and ten day

> Watson agreed to buy Ingram’s house for $355,000. The contract provided that Watson deposit $15,000 as earnest money and that “in the event of default by the Buyer, earnest money shall be forfeited to Seller as liquidated damages, unless Seller elects to

> Bettye Gregg offered to purchase a house from Head & Seeman, Inc. (seller). Though she represented in writing that she had between $15,000 and $20,000 in equity in another home that she would pay to the seller after she sold the other home, she knew that

> California and Hawaiian Sugar Company (C and H) is an agricultural cooperative in the business of growing sugarcane in Hawaii and transporting the raw sugar to its refinery in California for processing. Because of the seasonal nature of the sugarcane cro

> El Dorado Tire Company fired Bill Ballard, a sales executive. Ballard had a five-year contract with El Dorado but was fired after only two years of employment. Ballard sued El Dorado for breach of contract. El Dorado claims that any damages due to breach

> Adams, by fraudulent representations, induced Barton to purchase one hundred shares of the capital stock of the Evermore Oil Company. The shares were worthless. Barton executed and delivered to Adams a negotiable promissory note for $5,000, dated May 5,

> Kerr Steamship Company sent a telegram at a cost of $26.78 to the Philippines through the Radio Corporation of America. The telegram, which contained instructions in unintelligible code for loading cargo on one of Kerr’s ships, was mislaid and never deli

> Developers under a plan approved by the city of Rye had constructed six luxury cooperative apartment buildings and were to construct six more. To obtain certificates of occupancy for the six completed buildings, the developers were required to post a bon

> Billy Williams Builders and Developers (Williams) entered into a contract with Hillerich under which Williams agreed to sell to Hillerich a certain lot and to construct on it a house according to submitted plans and specifications. The house built by Wil

> Copenhaver, the owner of a laundry business, contracted with Berryman, the owner of a large apartment complex, to allow Copenhaver to own and operate the laundry facilities within the apartment complex. Berryman terminated the five-year contract with Cop

> Felch was employed as a member of the faculty of Findlay College, a private college, under a contract that permitted dismissal only for cause. He was dismissed by action of the president and board of trustees, who did not comply with a contractual provis

> Edward, a candy manufacturer, contracted to buy 1,000 barrels of sugar from Marcia. Marcia failed to deliver and Edward was unable to buy any sugar in the market. As a direct consequence he was unable to make candies to fulfill unusually lucrative contra

> While adjusting a television antenna beside his mobile home and underneath a high-voltage electric transmission wire, Prince received an electric shock resulting in personal injury. He claims the high-voltage electric current jumped from the transmission

> Courts Distributors needed 200 compact refrigerators on a rush basis. It contacted Eastinghouse Corporation, a manufacturer of refrigerators. Eastinghouse said it would take some time to quote a price on an order of that size. Courts replied, “Send the r

> On November 23, Blackburn, a dress manufacturer, mailed to Conroy a written and signed offer to sell 1,000 sundresses at $50 per dress. The offer stated that it would “remain open for ten days” and that it could “not be withdrawn prior to that date.” Two

> Reinfort executed a written contract with Bylinski to purchase an assorted collection of shoes for $3,000. A week before the agreed shipment date, Bylinski called Reinfort and said, “We cannot deliver at $3,000; unless you agree to pay $4,000, we will ca

> McLaughlin borrowed $10,000 from Adler, who, apprehensive about McLaughlin’s ability to pay, demanded security. McLaughlin indorsed and delivered to Adler a negotiable promissory note executed by Topping for $12,000 payable to McLaughlin’s order in twelv

> Explain how the result in Question 3 might change if the U.S. Electronics form contained the following provisions: (a) “The seller’s acceptance of the purchase order to which this acknowledgment responds is expressly made conditional on the buyer’s assen

> Hicks, a San Francisco company, orders from U.S. Electronics, a New York company, 10,000 electronic units. Hicks’s order form provides that any dispute would be resolved by an arbitration panel located in San Francisco. U.S. Electronics executes and deli

> In Question 1, what effect, if any, would the following telegram have? International Widget: In accordance with our agreement of this date you will deliver the 1,000 previously ordered widgets within thirty days. Thank you for your cooperation in this ma

> Emery Industries (Emery) contracted with Mechanicals, Inc. (Mechanicals), to install a pipe system to carry chemicals and fatty acids under high pressure and temperature. The system required stainless steel “stub ends” (used to connect pipe segments), wh

> Dorton, as a representative for The Carpet Mart, purchased carpets from Collins & Aikman that were supposedly manufactured of 100 percent Kodel polyester fiber but were, in fact, made of cheaper and inferior fibers. Dorton then brought suit for compensat

> The defendant, Gray Communications, desired to have a television tower built. After a number of negotiation sessions conducted by telephone between the defendant and the plaintiff, Kline Iron, the parties allegedly reached an oral agreement under which t

> In September, Auburn Plastics submitted price quotations to CBS for the manufacture of eight cavity molds to be used in making parts for CBS’s toys. Each quotation specified that the offer would not be binding unless accepted within fifteen days. Further

> American Sand & Gravel, Inc., agreed to sell sand to Clark at a special discount if 20,000–25,000 tons were ordered. The discount price was $9.45 per ton, compared with the normal price of $10.00 per ton. Two years later, Clark orders, and receives, 1,60

> Schreiner, a cotton farmer, agreed over the telephone to sell 150 bales of cotton to Loeb & Co. Schreiner had sold cotton to Loeb & Co. for the past five years. Written confirmation of the date, parties, price, and conditions was mailed to Schreiner, who

> HMT, already in the business of marketing agricultural products, decided to try its hand at marketing potatoes for processing. Nine months before the potato harvest, HMT contracted to supply Bell Brand with 100,000 sacks of potatoes. At harvest time, Bel

> On January 2, 2015, seventeen-year-old Martin paid $2,000 for a used motorboat to use in his fishing business, after Dealer’s fraudulent misrepresentation of the condition of the boat. Martin signed an installment contract for $1,500, and gave Dealer the

> Dickinson orders 1,000 widgets at $5 per widget from International Widget to be delivered within sixty days. After the contract is consummated and signed, Dickinson orally requests that International deliver the widgets within thirty days rather than six

> 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

> 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

> Following are several transactions involving a university. 1. In fiscal year 2017, the university was notified by the federal government that in 2018 it would receive a $500,000 grant for wetlands research. 2. The university received a $500,000 endowment

> 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