Which of the following statements is true? a. There are three different types of proprietary funds. b. There are three different types of fiduciary funds. c. There are five different types of fiduciary funds. d. There are five different types of governmental funds.
> This is a continuation of Problem 8-14. Trial balances for Phan Company and its subsidiary Sato Company on December 31, 2014, are as follows: Phan Company acquired its investment in Sato Company through open-market purchases of stock as follows: Requ
> Trial balances for Phan Company and its subsidiary Sato Company on December 31, 2013, are as follows: Phan Company acquired its investment in Sato Company through open-market purchases of stock as follows: Any difference between implied and book val
> This is a continuation of Problem 8-12. Trial balances for Phan Company and its subsidiary Sato Company on December 31, 2014, are as follows: Phan Company acquired its investment in Sato Company through open-market purchases of stock as follows: Requ
> Trial balances for Phan Company and its subsidiary Sato Company on December 31, 2013, are as follows: Phan Company acquired its investment in Sato Company through open-market purchases of stock as follows: Any difference between implied and book valu
> The accounts of Pyle Company and its subsidiary, Stern Company, are summarized below as of December 31, 2014: Pyle Company made the following open-market purchase and sale of Stern Company common stock: January 2, 2012, purchased 51,000 shares (85% of
> On January 2, 2013, Pullen Company purchased, on the open market, 135,000 shares of Souza Company common stock for $665,000. At that time, Souza Company had common stock ($2 par value) of $300,000 and retained earnings of $400,000. On May 1, 2014, Pullen
> Sarko Company had 300,000 shares of $10 par value common stock outstanding at all times, and retained earnings balances as indicated here: Pelzer Company acquired Sarko Company stock through open-market purchases as follows: Sarko Company declared no
> A receiver was appointed by the court to manage the affairs of Davis Manufacturing Company on March 31, 2015. On this date, the following balance sheet applied: Additional Information: 1. The cash account includes a $500 travel advance that has been sp
> Using the information presented in Problem 7-4, prepare a consolidated financial statements workpaper for the year ended December 31, 2015, using the trial balance format. Prout Company Sexton Company $ 568,000 $ 271,000 Cument Assets Fixed Assets 1
> Prout Company owns 80% of the common stock of Sexton Company. The stock was purchased for $1,600,000 on January 1, 2012, when Sexton Company’s retained earnings were $800,000. On January 1, 2014, Prout Company sold fixed assets to Sexton Company
> On January 1, 2015, P Company purchased equipment from its 80% owned subsidiary for $600,000. The carrying value of the equipment on the books of S Company was $450,000. The equipment had a remaining useful life of six years on January 1, 2015. On Januar
> Pico Company, a truck manufacturer, owns 90% of the voting stock of Seward Company. On January 1, 2014, Pico Company sold trucks to Seward Company for $350,000. The trucks, which represented inventory to Pico Company, had a cost to Pico Company of $260,0
> Powell Company owns 80% of the outstanding common stock of Sullivan Company. On June 30, 2014, Sullivan Company sold equipment to Powell Company for $500,000. The equipment cost Sullivan Company $780,000 and had accumulated depreciation of $400,000 on th
> Padilla Company acquired 90% of the outstanding common stock of Sanchez Company on June 30, 2014, for $426,000. On that date, Sanchez Company had retained earnings in the amount of $60,000, and the fair value of its recorded assets and liabilities was eq
> (This is the same problem as Problem 7-12, but assuming the complete equity method.) Prather Company owns 80% of the common stock of Stone Company. The stock was purchased for $960,000 on January 1, 2012, when Stone Company’s retained
> (Note: This is the same Problem as Problems 7-4 and 7-10, but assuming the use of the complete equity method.) Prout Company owns 80% of the common stock of Sexton Company. The stock was purchased for $1,600,000 on January 1, 2012, when Sexton Company&ac
> Platt Company acquired an 80% interest in Sloane Company when the retained earnings of Sloane Company were $300,000. On January 1, 2014, Sloane Company recorded a $250,000 gain on the sale to Platt Company of equipment with a remaining life of five years
> Padilla Company acquired 90% of the outstanding common stock of Sanchez Company on June 30, 2014, for $426,000. On that date, Sanchez Company had retained earnings in the amount of $60,000, and the fair value of its recorded assets and liabilities was eq
> Miner Company is being forced into bankruptcy. The company’s creditors and stockholders have requested an estimate of the results of a liquidation of the company. Miner’s trial balance follows: The assets are expecte
> Prather Company owns 80% of the common stock of Stone Company. The stock was purchased for $960,000 on January 1, 2012, when Stone Company’s retained earnings were $675,000. On January 1, 2014, Stone Company sold fixed assets to Prather
> Using the information presented in Problem 7-10 prepare a consolidated financial statements workpaper for the year ended December 31, 2015, using the trial balance format. Prout Company Sexton Company $ 568,(00 S 271,000 Current Assets Fixed Asets 1
> (Note: This is the same Problem as Problem 7-4, but assuming the use of the partial equity method.) Prout Company owns 80% of the common stock of Sexton Company. The stock was purchased for $1,600,000 on January 1, 2012, when Sexton Companyâ€&
> Pierce Company acquired a 90% interest in Sanders Company on January 1, 2014, for $1,480,000. At this time, Sanders Company’s common stock and retained earnings balances were $1,000,000 and $500,000, respectively. An examination of the
> On January 1, 2013, Phelps Company purchased an 85% interest in Sloane Company for $955,000 when the retained earnings of Sloane Company were $150,000. The difference between implied and book value was assigned as follows: Inventory â€&brvba
> Parsons Company acquired 90% of the outstanding common stock of Shea Company on June 30, 2014, for $426,000. On that date, Shea Company had retained earnings in the amount of $60,000, and the fair value of its recorded assets and liabilities was equal to
> Pitts Company owns 80% of the common stock of Shannon Company. The stock was purchased for $960,000 on January 1, 2012, when Shannon Company’s retained earnings were $675,000. On January 1, 2014, Shannon Company sold fixed assets to Pit
> Pruitt Corporation owns 90% of the common stock of Sedbrook Company. The stock was purchased for $625,500 on January 1, 2012, when Sedbrook Company’s retained earnings were $95,000. Preclosing trial balances for the two companies at Dec
> Pace Company owns 85% of the outstanding common stock of Sand Company and all the outstanding common stock of Star Company. During 2015, the affiliates engaged in intercompany sales as follows: The following amounts of intercompany profits were include
> Peer Company owns 80% of the common stock of Seacrest Company. Peer Company sells merchandise to Seacrest Company at 25% above its cost. During 2014 and 2015 such sales amounted to $265,000 and $475,000, respectively. The 2014 and 2015 ending inventories
> Use the data provided in Problem 10-5. Required: Prepare a realization and liquidation account for Plum Company to cover the five-month period of receivership (June 1, 2015, to October 31, 2015). Use the alternate approach to present the components of th
> Shell Company, an 85% owned subsidiary of Plaster Company, sells merchandise to Plaster Company at a markup of 20% of selling price. During 2014 and 2015, intercompany sales amounted to $442,500 and $386,250, respectively. At the end of 2014, Plaster had
> Peel Company owns 90% of the common stock of Seacore Company. Seacore Company sells merchandise to Peel Company at 20% above cost. During 2014 and 2015, such sales amounted to $436,000 and $532,000, respectively. At the end of each year, Peel Company had
> Use the information relating to Weber Company and Fairfield Company in Exercise 9-3. Required: Prepare in general journal form the intercompany bond elimination entries for the consolidated statements workpapers prepared on December 31, 2014, December
> Weber Company issued five-year, 10% bonds on January 2, 2014, for 105. Par value is $850,000. Interest is paid semiannually on June 30 and December 31. Weber Company is a 90%-owned subsidiary of Fairfield Company. On December 31, 2014, Fairfield Company
> Refer to the data provided in Exercise 9-1. Required: Prepare in general journal form the intercompany bond elimination entries required in the preparation of the December 31, 2014, December 31, 2015, and December 31, 2016, consolidated statements workpa
> Refer to the data provided in Exercise 9-12. Required: Prepare in general journal form the intercompany bond elimination entries required in the preparation of the December 31, 2013, December 31, 2014, and December 31, 2015, consolidated statements work
> Pacman Company issued 5-year, 8% bonds with a par value of $100,000 on December 31, 2012, for $92,278 (sold to yield 10%). Interest is paid semiannually on June 30th and December 31st. On December 31, 2013, $80,000 of the par value bonds were purchased b
> On January 1, 2014, Perez Company acquired 80% of Serrano Company’s $300,000 par value common stock for $200,000 and 40% of Serrano Company’s 8%, $100,000 par value preferred stock for $86,000. During 2014, Serrano Company reported net income of $80,000
> Pacelli Company issued 10-year, 10% bonds with a par value of $1,000,000 on January 2, 2013, for $940,000. Interest is paid semiannually on June 30 and December 31. On December 31, 2014, $800,000 of the par value bonds were purchased by Salez Company for
> Padilla Company acquired 80% of the outstanding common stock of Skon Company on January 1, 2012, for $132,000. At the date of purchase, Skon Company had a balance in its $2 par value common stock account of $120,000 and retained earnings of $30,000. On
> Plum Company has been in receivership for the past five months. At the beginning of this period, the following trial balance was taken from Plum Company’s books. The trustee, P. Smith, who was appointed to manage the debtorâ
> P Company owns 80% of the outstanding stock of S Company. During 2014, S Company reported net income of $525,000 and declared no dividends. At the end of the year, S Company’s inventory included $487,500 in unrealized profit on purchases from P Company.
> On January 1, 2017, the City of Graf pays $60,000 for a work of art to display in the local library. The city will take appropriate measures to protect and preserve the piece. However, if the work is ever sold, the money received will go into unrestricte
> What are the two fund types within the proprietary funds? What types of events does each report?
> The City of Bagranoff holds $90,000 in cash that will be used to make a bond payment when the debt comes due early next year. The assistant treasurer had made that decision. However, just before the end of the current year, the city council formally appr
> What are the three categories of funds? What funds are included in each of these three?
> Which of the following statements is correct about the reporting of governmental funds? a. Fund financial statements measure revenues and expenditures based on modified accrual accounting. b. Government-wide financial statements measure revenues and ex
> Which of the following statements is correct about the reporting of governmental funds? a. Fund financial statements measure economic resources. b. Government-wide financial statements measure only current financial resources. c. Fund financial stateme
> A citizen of the City of Townsend makes a donation of $22,000 in investments. The citizen has stipulated that the investments be held. Any resulting income must be used to help maintain the city’s cemetery. In which fund should this asset be reported? a
> The City of Danmark is preparing financial statements. Officials are currently working on the statement of activities within the government-wide financial statements. A question has arisen as to whether a particular revenue should be identified on govern
> Officials for the City of Artichoke, West Virginia, have recently formed a transit authority to create a public transportation system for the community. These same officials are now preparing the city’s CAFR for the most recent year. The transit authorit
> The City of Hampshore is currently preparing financial statements for the past fiscal year. The city manager is concerned because the city encountered some unusual transactions during the current fiscal period and is unsure as to their handling. Require
> A city orders a new computer for its general fund at an anticipated cost of $88,000. Its actual cost when received is $89,400. Payment is subsequently made. Prepare all required journal entries for both fund and government-wide financial statements. What
> The City of Abernethy has three large bridges built in the later part of the 1980s that were not capitalized at the time. In creating government-wide financial statements, the city’s accountant is interested in receiving suggestions as to how to determin
> Search the Internet for the official website of one or more state or local governments. On this website, determine whether the latest comprehensive annual financial report (CAFR) is available. For example, a recent comprehensive annual financial report f
> Obtain a copy of the original version of GASB Statement 34. Read paragraphs 239 through 277. Required Write a report describing alternatives that the GASB considered when it created Statement 34. Indicate the alternative that you would have viewed as m
> The City of Larissa recently opened a solid waste landfill to serve the area’s citizens and businesses. The city’s accountant has gone to city officials for guidance as to whether to record the landfill within the general fund or as a separate enterprise
> Go to the website www.gasb.org and click on “About Us” included in the list that runs across the top of the page. Then click on “Mission, Vision, and Core Values.” Read the information provided by GASB. Required Assume that a financial analyst with who
> Read the following articles and any other papers that are available on setting governmental accounting standards: “The Governmental Accounting Standards Board: Factors Influencing Its Operation and Initial Technical Agenda,” Government Accountants Journa
> Go to the website www.gasb.org and click on “Projects” included in the list that runs across the top of the page. Then click on “Current Projects & Pre-Agenda Research.” Click on one of the current projects that is listed. Read the sections that are titl
> Search the Internet for the official website of one or more state or local governments. After reviewing this website, determine whether the latest comprehensive annual financial report (CAFR) is available on the site. For example, the most recent compreh
> Go to www.phoenix.gov and do a search for the term “CAFR.” Those results should lead to the latest CAFR for the City of Phoenix, Arizona. The financial statements for a state and local government must include a Management’s Discussion and Analysis of the
> Read the following journal article: “25 Years of State and Local Governmental Financial Reporting— An Accounting Standards Perspective,” The Government Accountants Journal, Fall 1992. Or, as an alternative possibility, do a search of books in the college
> The board of commissioners of the City of Hartmoore adopted a general fund budget for the year ending June 30, 2017, that included revenues of $1,000,000, bond proceeds of $400,000, appropriations of $900,000, and operating transfers out of $300,000. If
> At what point in time does a governmental fund report an expenditure?
> A city starts a solid waste landfill that it expects to fill to capacity gradually over a 10-year period. At the end of the first year, it is 8 percent filled. At the end of the second year, it is 19 percent filled. Currently, the cost of closure and pos
> A city starts a solid waste landfill that it expects to fill to capacity gradually over a 10-year period. At the end of the first year, it is 8 percent filled. At the end of the second year, it is 19 percent filled. Currently, the cost of closure and pos
> A city starts a solid waste landfill that it expects to fill to capacity gradually over a 10-year period. At the end of the first year, it is 8 percent filled. At the end of the second year, it is 19 percent filled. Currently, the cost of closure and pos
> A city creates a solid waste landfill. It assesses a charge to every person or company that uses the landfill based on the amount of materials contributed. In which of the following will the landfill probably be recorded? a. General fund. b. Special re
> Which of the following is most likely to be true about the financial reporting of a public college or university? a. It resembles the financial reporting of private colleges and universities. b. It will continue to use its own unique style of financial
> Which of the following is true about the statement of cash flows for the proprietary funds of a state or local government? a. The indirect method of reporting cash flows from operating activities is allowed although the direct method is recommended. b.
> Government-wide financial statements make a distinction between program revenues and general revenues. How is that difference shown? a. Program revenues are offset against the expenses of a specific function; general revenues are assigned to governmenta
> A government reports that its public safety function had expenses of $900,000 last year and program revenues of $200,000 so that its net expenses were $700,000. On which financial statement is this information presented? a. Statement of activities. b.
> An employment agency for individuals with disabilities works closely with the City of Hanover. The employment agency is legally separate from the city but still depends on it for financial support, which leads to a potential financial burden for the city
> How are interfund transfers reported in fund financial statements?
> An accountant is trying to determine whether the school system of the City of Abraham is fiscally independent. Which of the following is not a requirement for being deemed fiscally independent? a. Holding property in its own name. b. Issuing bonded deb
> Which of the following is not necessary for a special purpose local government to be viewed as a primary government for reporting purposes? a. It must have a separately elected governing body. b. It must have specifically defined geographic boundaries.
> Assume in Problem 12 that the city reports the work as a capital asset. Which of the following is true? a. Depreciation is not recorded because the city has no cost. b. Depreciation is not required if the asset is viewed as being inexhaustible. c. Dep
> In Problem 12, which of the following statements is true about reporting a revenue in connection with this gift? a. A revenue will be reported. b. Revenue is reported but only if the asset is reported. c. If the asset is not capitalized, no revenue sh
> Cash of $20,000 is transferred from the general fund to the enterprise fund to pay for work that was done. What is reported on the fund financial statements? a. No reporting is made. b. Other Financing Sources increase by $20,000; Other Financing Uses
> Cash of $20,000 is transferred from the general fund to the enterprise fund to pay for work that was done. What is reported on the government-wide financial statements? a. No reporting is made. b. Other Financing Sources increase by $20,000; Other Fina
> Cash of $60,000 is transferred from the general fund to the debt service fund. What is reported on the fund financial statements? a. No reporting is made. b. Other Financing Sources increase by $60,000; Other Financing Uses increase by $60,000. c. Rev
> Cash of $60,000 is transferred from the general fund to the debt service fund. What is reported on the government-wide financial statements? a. No reporting is made. b. Other Financing Sources increase by $60,000; Other Financing Uses increase by $60,0
> Which of the following is an example of an interactivity transaction? a. Money is transferred from the general fund to the debt service fund. b. Money is transferred from the capital projects fund to the general fund. c. Money is transferred from the
> A city constructs curbing in a new neighborhood and finances it as a special assessment. Under what condition should these transactions be recorded in an agency fund? a. Never; the work is reported in the capital projects funds. b. Only if the city is
> On January 1, 2017, a rich citizen of the Town of Ristoni donates a painting valued at $300,000 to be displayed to the public in a government building. Although this painting meets the three criteria to qualify as an artwork, town officials choose to rec
> 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?
