Question: Use the information in problem 37 to

> A city constructs a special assessment project (a sidewalk) for which it is secondarily liable. The city issues bonds of $90,000. It authorizes another $10,000 that is transferred out of the general fund. The sidewalk is built for $100,000. The citizens

> 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.

> The City of Frost has a 20-year debt outstanding. On the last day of the current year, this debt has an outstanding balance of $4.8 million and five years remaining until it is due. On that date, the debt is paid off early for $5 million. A new debt is i

> The City of Dylan issues a 10-year bond payable of $1 million at face value on the first day of Year 1. 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

> The City of Bacon is located in the County of Pork. The city has a school system and reports buildings at a net $3.6 million although they are actually worth $4.2 million. The county has another school system and reports buildings at a net $5.2 million a

> 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. What type of revenue is this grant? a. Derived tax revenue

> The City of Nomanchester has a defined benefit pension plan for a number of its employees. A pension trust fund has been set up that currently has a net position of $32.7 million because quite a number of investments are being held. An actuary estimates

> A city builds sidewalks throughout its various neighborhoods at a cost of $2.1 million. Which of the following is not true? a. Because the sidewalks qualify as infrastructure, the asset is viewed in the same way as land so that no depreciation is record

> A purchase order for $3,000 is recorded in the general fund for the purchase of a new computer. The computer 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.

> 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, deb

> The City of Columbus has approximately 2,000 employees. For the past three decades, the city has provided its employees with a defined benefit pension plan. The plan contract calls for specific payment amounts to be made to each retiree based on a set fo

> 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-wide financial statements. b. The land could be reported as an

> What is the most common form for the financial statements prepared by public colleges and universities?

> In government-wide financial statements, how do intra-activity and interactivity transactions differ? How is each type of transaction reported?

> The City of Dickens has a fiscal year ending December 31, Year 5. The city council is viewed as the highest level of decision-making authority for the government. For each of the following, indicate whether the overall statement is true or false. Assume

> A city starts a public library that has separate incorporation and gets some of its money for operations from the state and some from private donations. Indicate whether each of the following independent statements is true or false and briefly explain ea

> A city receives a copy of its original charter from the year 1799 as a gift from a citizen. The document will be put under glass and displayed in the city hall for all to see. The fair value is estimated at $10,000. Indicate whether each of the following

> Use the same information as in problem 44 except that, by the end of Year 3, the landfill is 40 percent filled. The city now realizes that the total closure costs will be $3 million. Indicate whether each of the following independent statements is true o

> A city has a solid waste landfill that was filled 12 percent in Year 1 and 26 percent in Year 2. During those periods, the government expected that total closure costs would be $2 million. As a result, it paid $50,000 to an environmental company on July

> Assume that the one component unit had program revenues of $30,000 and expenses of $42,000 and spent $10,000 for land during Year 4. However, it should have been handled as a blended component unit, not as a discretely presented component unit. According

> On the first day of Year 4, the city receives a painting as a gift that qualifies as a work of art. It has a 30-year life, is worth $15,000, and is being displayed at one of the local parks. The accountant accidentally capitalized and depreciated it alth

> The City of Lawrence opens a solid waste landfill in 2017 that is at 54 percent of capacity on December 31, 2017. The city had initially anticipated closure costs of $2 million but later that year decided that closure costs would actually be $2.4 million

> The following information pertains to the City of Williamson for 2017, its first year of legal existence. For convenience, assume that all transactions are for the general fund, which has three separate functions: general government, public safety, and h

> The County of Maxnell decides to create a sanitation department and offer its services to the public for a fee. As a result, county officials plan to account for this activity within the enterprise funds. Prepare journal entries for this operation for th

> The City of Francois, Texas, has begun the process of producing its current comprehensive annual financial report (CAFR). Several organizations that operate within the city are related in some way to the primary government. The city’s accountant is attem

> A city government adds street lights within its boundaries at a total cost of $300,000. The lights should burn for at least 10 years but can last significantly longer if maintained properly. The city sets up a system to monitor these lights with the goal

> 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 capital projects funds worked with each of these functions at times

> 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 capital projects funds worked with each of these functions at times

> 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 capital projects funds worked with each of these functions at times

> 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 capital projects funds worked with each of these functions at times

> 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 capital projects funds worked with each of these functions at times

> 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 capital projects funds worked with each of these functions at times

> On January 1, 2017, the City of Hastings created a solid waste landfill that it expects to reach capacity gradually over the next 20 years. If the landfill were to be closed at the current time, closure costs would be approximately $1.2 million plus an a

> 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 capital projects funds worked with each of these functions at times

> Fund A transfers $20,000 to Fund B. For each of the following, indicate whether the statement is true 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 this transfer on the

> 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 the net position balance of the Government Activities on

> On December 1, 2017, a state government awards a city government a grant of $1 million to be used specifically to provide hot lunches for all schoolchildren. No money is received until June 1, 2018. For each of the following, indicate whether the stateme

> Government officials of the City of Jones expect to receive general fund revenues of $400,000 in 2017 but approve spending only $380,000. Later in the year, as they receive more information, they increase the revenue projection to $420,000. Officials als

> 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 produce financial statements right now, the following figures would be included: – Governmental activities: Assets = $800,000, Liabilities = $300,000, and Change in Ne

> The City of Havisham has a fiscal year ending December 31, Year 5. If the city were to produce financial statements right now, the following figures would be included: – Governmental activities: Assets = $800,000, Liabilities = $300,000, and Change in N

> A city has only one activity, its school system. The school system is accounted for within the general fund. 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

> What is a special assessment project? How are special assessment projects reported?

> On the first day of the year, the City of Wolfe bought $20,000 of equipment with a 5-year life and no salvage value for its school system. It was capitalized but no other entries were ever made. The machine was monitored using the modified approach. a.

> The city maintains a landfill that has been recorded during the current year within its parks. The landfill generated program revenues of $4,000 in Year 4 and cash expenses of $15,000. It also paid $3,000 cash for a piece of land. These transactions were

> Following are descriptions of transactions and other financial events for the City of Tetris for the year ending December 2017. Not all transactions have been included here. Only the general fund formally records a budget. No encumbrances were carried ov

> The following unadjusted trial balances are for the governmental funds of the City of Copeland prepared from the current accounting records: Based on the information presented for each of these governmental funds, answer the following questions: a. How

> For each of the following, indicate whether the statement is true or false and include a brief explanation for your answer. a. A pension trust fund appears in the government-wide financial statements but not in the fund financial statements. b. Permane

> The City of Pfeiffer starts the year of 2017 with the general fund and an enterprise fund. The general fund has two activities: education and parks/recreation. For convenience, assume that the general fund holds $123,000 cash and a new school building co

> The City of Bernard starts the year of 2017 with the following unrestricted amounts in its general fund: cash of $20,000 and investments of $70,000. In addition, it holds a small building bought on January 1, 2016, for general government purposes for $30

> 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 financial statements?

> The governmental funds of the City of Westchester report $445,000 in assets and $140,000 in liabilities. 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

> How do governmental funds report capital outlay in fund financial statements? How do government-wide financial statements report capital expenditures?

> A city issues a 60-day tax anticipation note to fund operations until taxes have been collected. What recording should it make? a. The liability should be reported in the government-wide financial statements; an other financing source should be shown in

> The state awards a grant of $50,000 to the Town of Glenville. The state will pay the grant money to the town as a reimbursement for money spent on road repair. At the time of the grant, the state pays $8,000 in advance. During the first year of this prog

> When is an encumbrance recorded? What happens to this balance? How are encumbrances reported in government-wide financial statements?

> The City of Huble has a defined benefit pension plan for a number of its employees. Which of the following is not included immediately in the determination of pension expense that this government should recognize in its government-wide financial statemen

> The Willingham Museum qualifies as a component unit of the City of Willingham. How does an activity or function meet the requirements to be deemed a component unit of a primary government?

> The general fund of a city reports assets of $300,000 and liabilities of $200,000 in the fund financial statements. Explain what is meant by each of the following balances: fund balance—nonspendable of $40,000, fund balance—restricted of $28,000, fund ba

> At the end of the current year, a government reports a fund balance—assigned balance of $9,000 in connection 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

> What are the two major divisions reported in government-wide financial statements? What funds are not reported in these financial statements?

> The City of Wilson receives a large sculpture valued at $240,000 as a gift to be placed in front of the municipal building. Which of the following is true for reporting the gift within the governmentwide financial statements? a. A capital asset of $240,

> Cash of $90,000 is transferred from a city’s general fund to start construction on a police station. The city issues a bond at its $1.8 million face value. The police station is built for $1.89 million. Prepare all necessary journal entries for these tra

> How is the issuance of a long-term bond reported on fund financial statements? How is the issuance of a long-term bond reported on government-wide financial statements?

> Padlock Corp. owns 90 percent of Safeco, Inc. During the year, Padlock sold 3,000 locking mechanisms to Safeco for $900,000. By the end of the year, Safeco had sold all but 500 of the locking mechanisms to outside parties. Padlock marks up the cost of it

> The partnership of Anderson, Berry, Hammond, and Winwood is being liquidated. It currently holds cash of $20,000 but no other assets. Liabilities amount to $30,000. The capital balances are  Anderson (40% of profits and losses) ................ $ 20,000

> The partnership of Hendrick, Mitchum, and Redding has the following account balances:  This partnership is being liquidated. Hendrick and Mitchum are each entitled to 40 percent of all profits and losses with the remaining 20 percent going t

> A local partnership is to be liquidated. Commissions and other liquidation expenses are expected to total $19,000. The business’s balance sheet prior to the commencement of liquidation is as follows: Prepare a predistribution plan for

> The Drysdale, Koufax, and Marichal partnership has the following balance sheet immediately prior to liquidation: a. Liquidation expenses are estimated to be $15,000. Prepare a predistribution schedule to guide the distribution of cash. b. Assume that a

> The partnership of Larson, Norris, Spencer, and Harrison has decided to terminate operations and liquidate all business property. During this process, the partners expect to incur $8,000 in liquidation expenses. All partners are currently solvent. The b

> Alex and Bess have been in partnership for many years. The partners, who share profits and losses on a 60:40 basis, respectively, wish to retire and have agreed to liquidate the business. Liquidation expenses are estimated to be $5,000. At the date the p

> The following balance sheet is for a local partnership in which the partners have become very unhappy with each other. To avoid more conflict, the partners have decided to cease operations and sell all assets. Using this information, answer the followin

> A partnership has liquidated all assets but still reports the following account balances: The partners split profits and losses as follows: Cisneros, 40 percent; Beck, 20 percent; Sadak, 10 percent; Emerson, 20 percent; and Page 10 percent. Beck, loan...

> The following condensed balance sheet is for the partnership of Miller, Tyson, and Watson, who share profits and losses in the ratio of 6:2:2, respectively: For how much money must the other assets be sold so that each partner receives some amount of ca

> The following condensed balance sheet is for the partnership of Hardwick, Saunders, and Ferris, who share profits and losses in the ratio of 4:3:3, respectively: The partners decide to liquidate the partnership. Forty percent of the other assets are sol

> When a subsidiary sells inventory to a parent, the intra-entity profit is removed from the subsidiary’s net income for consolidation and reduces the income allocation to the noncontrolling interest. Is the profit permanently eliminated from the noncontro

> Steve Reese is a well-known interior designer in Fort Worth, Texas. He wants to start his own business and convinces Rob O’Donnell, a local merchant, to contribute the capital to form a partnership. On January 1, 2016, O’Donnell invests a building worth

> A partnership of attorneys in the St. Louis, Missouri, area has the following balance sheet accounts as of January 1, 2018: According to the articles of partnership, Athos is to receive an allocation of 50 percent of all partnership profits and losses w

> Gray, Stone, and Lawson open an accounting practice on January 1, 2016, in San Diego, California, to be operated as a partnership. Gray and Stone will serve as the senior partners because of their years of experience. To establish the business, Gray, Sto

> Boswell and Johnson form a partnership on May 1, 2016. Boswell contributes cash of $50,000; Johnson conveys title to the following properties to the partnership: The partners agree to start their partnership with equal capital balances. No goodwill is t

> In the early part of 2018, the partners of Hugh, Jacobs, and Thomas sought assistance from a local accountant. They had begun a new business in 2017 but had never used an accountant’s services. Hugh and Jacobs began the partnership by contributing $150,

> The E.N.D. partnership has the following capital balances as of the end of the current year: Pineda.................................. $230,000 Adams.................................... 190,000 Fergie ..................................... 160,000 Gomez...

> On January 1, 2017, the dental partnership of Angela, Diaz, and Krause was formed when the partners contributed $30,000, $58,000, and $60,000, respectively. Over the next three years, the business reported net income and (loss) as follows: 2017 .........

> Purkerson, Smith, and Traynor have operated a bookstore for a number of years as a partnership. At the beginning of 2018, capital balances were as follows: Purkerson................................ $60,000 Smith …………………………………. 40,000 Traynor ............

> A partnership has the following account balances: Cash $50,000; Other Assets $600,000; Liabilities $240,000; Nixon, Capital (50 percent of profits and losses) $200,000; Hoover, Capital (20 percent) $120,000; and Polk, Capital (30 percent) $90,000. Each o

> Lear is to become a partner in the WS partnership by paying $80,000 in cash to the business. At present, the capital balance for Hamlet is $70,000 and for MacBeth is $40,000. Hamlet and MacBeth share profits on a 7:3 basis. Lear is acquiring 40 percent o

> King Company owns a 90 percent interest in the outstanding voting shares of Pawn Company. No excess fair-value amortization resulted from the acquisition. Pawn reports a net income of $110,000 for the current year. Intra-entity sales occur at regular int

> The following account balances are for the Agee Company as of January 1, 2017, and December 31, 2017. All amounts are denominated in kroner (Kr). Additional Information ∙ Agee issued additional shares of common stock during the year o

> Board Company has a foreign subsidiary that began operations at the start of 2017 with assets of 132,000 kites (the local currency unit) and liabilities of 54,000 kites. During this initial year of operation, the subsidiary reported a profit of 26,000 ki

> Lancer, Inc. (a U.S.-based company), establishes a subsidiary in a foreign country on January 1, 2016. The following account balances for the year ending December 31, 2017, are stated in kanquo (KQ), the local currency: Sales ............................

> Zugar Company is domiciled in a country whose currency is the dinar. Zugar begins 2017 with three assets: cash of 20,000 dinars, accounts receivable of 80,000 dinars, and land that cost 200,000 dinars when acquired on April 1, 2016. On January 1, 2017, Z

> Rolfe Company (a U.S.-based company) has a subsidiary in Nigeria where the local currency unit is the naira (NGN). On December 31, 2016, the subsidiary had the following balance sheet (amounts are in thousands (000’s)): The subsidiary

> Refer to the information in problem 26. Prepare a statement of cash flows in pounds for Sullivan’s Island Company’s foreign subsidiary and then translate these amounts into U.S. dollars. From problem 26: Sullivan’s Island Company began operating a subsi

> Sullivan’s Island Company began operating a subsidiary in a foreign country on January 1, 2017, by investing capital in the amount of 60,000 pounds. The subsidiary immediately borrowed 140,000 pounds on a five-year note with 10 percent interest payable a

> The Isle of Palms Company (IOP), a U.S.-based entity, has a wholly owned subsidiary in Israel that has been determined as having the Israeli shekel (ILS) as its functional currency. On October 1, 2016, the Israeli subsidiary borrowed 500,000 Swiss francs

> On December 18, 2017, Stephanie Corporation acquired 100 percent of a Swiss company for 4.0 million Swiss francs (CHF), which is indicative of book and fair value. At the acquisition date, the exchange rate was $1.00 = CHF 1. On December 18, 2017, the bo

> The following accounts are denominated in rubles as of December 31, 2017. For reporting purposes, these accounts need to be stated in U.S. dollars. For each account, indicate the exchange rate that would be used to translate the ruble balance into U.S. d