You serve as the executor for the estate of Jeff Carpenter, who passed away on August 25, 2015, at the age of 102. Jeff’s estate consisted of two certificates of deposit totalling $800,000 and a $15,000 balance in his checking account. Total accrued interest on the CDs at the date of death amounted to $7,000. Jeff left a valid will, which provided that most of the estate be inherited by his sole surviving nephew, J.J. Kara. The will further provided that $100,000 be transferred to a trust account for his faithful dog, Sooner XXV. Income from the trust would be used to care for Sooner. Upon Sooner’s demise, the trust would end, and remaining trust principal would transfer to J.J. Kara. Jeff’s personal effects were minimal and excluded from the estate. Ms. Colleen Ryan, a trust officer at the Oxford National Bank, serves as estate executrix and as fiduciary for the trust. Ms. Ryan determines that no federal or state inheritance taxes are due. The limited estate income is also free from any federal or state income tax. The following transactions occur during September 2015: a On September 12, received a check in the amount of $11,500, representing the normal semiannual interest payment on the certificates of deposit. b On September 13, cashed out the certificates of deposit for $800,000. c On September 15, transferred $100,000 to a trust account at Oxford National Bank to provide care for Sooner XXV. Also, on the way to the bank, Sooner was dropped off at Puppy Paradise, his new home. d On September 18, paid funeral expenses for Jeff in the amount of $7,200. e On September 20, paid herself the $2,500 executor’s fee specified in Jeff’s will. f On September 28, finalized the estate and transferred the balance of the estate assets to Jeff’s nephew, J. J. Kara. REQUIRED: 1. Prepare an estate inventory at the date of death. 2. Prepare journal entries to record the estate transactions during September. 3. Prepare the estate closing entries on September 28. 4. Prepare the charge–discharge statement for the estate of Jeff Carpenter for the period August 25 through September 28, 2015.
> 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?
> What is a debtor-in-possession reorganization case?
> Describe the duties of a trustee in a liquidation case under the BAPCPA 1978.
> Is a trustee appointed in Title 11 cases? Is a trustee appointed in all Chapter 7 cases? In all Chapter 11 cases? Discuss.
> What obligations does a debtor corporation have in a bankruptcy case?
> What classifications of fund balance are currently allowed and which ones are no longer allowed?
> What are the duties of the U.S. trustee under BAPCPA? Do U.S. trustees supervise the administration of all bankruptcy cases?
> Bankruptcy proceedings may be designated as voluntary or involuntary. Distinguish between the two types, including the requirements for filing of an involuntary petition.
> Describe prepetition liabilities subject to compromise on the balance sheet of a company operating under Chapter 11 of the bankruptcy act.
> 1. If numerous funds are maintained, which of the following transactions would typically not be reported in a municipality’s general fund? a The collection of property taxes b The purchase of office equipment c The receipt of grant funds for local youth
> FASB ASC 852 provides two conditions that must be met for an emerging firm to use fresh-start reporting. What are these two conditions?
> What is meant by a homestead, or family, allowance?
> Briefly summarize differences between principal and income transactions for estates and trusts. Why is the classification important in estate and trust accounting?
> Are estate income taxes the responsibility of the estate or its beneficiaries?
> Summarize reasons why it may be important to have a will.
> Briefly summarize how income earned on estate property should be treated by a beneficiary for purposes of filing a federal tax return. Where should the beneficiary look to provide this information?
> What is the meaning of a devise in estate accounting?
> Does accounting for a trust follow GAAP?
> You serve as the executor for the estate of Maribeth Rainy. The following transactions occur during July 2015: a The Rainy estate included a certificate of deposit in the amount of $600,000. On the date of death, there was $11,600 of accrued but unpaid i
> Ms. Jacki Jerome, a famous rock superstar, dies on November 28, 2015, and leaves her entire estate, with a fair value of $23,400,000 (after settling all estate expenses and liabilities) to her cousin Maggie. REQUIRED: Calculate the federal tax on Ms. Je
> 1. When equipment was purchased with general fund resources, which of the following accounts would have been increased in the general fund? a Due from general fixed assets account group b Expenditures c Appropriations d No entry should be made in the gen
> Distinguish between the various types of interfund activity.
> What is an appropriation? How can budgetary approval be arranged to give the legislative body maximum control over the budget? How can it be arranged to give the executive maximum flexibility?
> Are interfund transfers expenditures or expenses? Explain.
> How does the accounting treatment of a nine-month note payable differ from the accounting treatment of a five-year note payable within a governmental fund? Why?
> Use the information in P 23-3 to prepare a charge–discharge statement for the estate of George Wilson for the period March 1, 2015 through April 30, 2015. Information from P 23-3 George Wilson dies on March 1, 2015, leaving a valid will. The will reads
> What types of revenue do governments have? How do nonexchange transactions differ from exchange transactions?
> What does measurement focus mean? What two focuses are used in governmental accounting? Which fund types use each?
> What is the modified accrual basis of accounting? Which funds utilize the modified accrual basis of accounting?
> Why aren’t fixed assets recorded in the accounts of a general fund? Where are they recorded?
> What are the simplified and complete accounting equations for a proprietary fund?
> 1. Internal service funds are reported: a With governmental funds on the fund financial statements b With governmental activities on the government-wide statement of net position c With proprietary funds on the government-wide statement of net position d
> Three wealthy friends, Tom, Grant, and Karen, each decided to donate $5,000,000 to the not-for-profit organization of their choice. Each donation was made on May 21, 2016. Prepare the entries required for each of the recipient organizations under the fol
> 1. A nongovernmental VHWO receives $20,000 of unconditional promises to give with no donor-imposed restrictions. Of this amount, $14,000 is due during the current period and $6,000 is due in the next period. The organization estimates that 3 percent of t
> Comparative adjusted trial balances for the motor pool of Douwe County at June 30, 2016, and June 30, 2017, are as follows: REQUIRED: Prepare fund financial statements for the motor pool for the year ended June 30, 2017. (The statement of cash flows is
> The following transactions relate to the Fiedler County Utility Plant, a newly established municipal facility financed with debt secured solely by net revenue from fees and charges to external users. 1. The general fund made a $30,000,000 contribution to
> The City of Thomasville established an internal service fund to provide printing services to all city offices and departments. The following transactions related to the fund took place in 2016: 1. On January 15, the general fund transferred equipment wit
> What is the purpose of a capital projects fund? Are all general fixed assets of a governmental unit acquired through capital projects funds? Explain.
> What are the special requirements for the presentation of financial statements for a firm that is operating under Chapter 11 Bankruptcy protection?
> Jimmy Olson died on June 15, 2015, at the age of 75, after a brief illness. Jimmy is survived by his wife, Lois, and two adult sons, Clark and Kent. Jimmy left a valid will, requesting that Clark serve as executor of his estate. Jimmy’s
> Caleb County had a beginning cash balance in its enterprise fund of $714,525. During the year, the following transactions affecting cash flows occurred: 1. Acquired equity investments totaling $165,000 for cash 2. Receipts from sales of goods or services
> The City of Meringen operates a central garage through an internal service fund to provide garage space and repairs for all city-owned and operated vehicles. The central garage fund was established by a contribution of $200,000 from the general fund, whe
> On July 1, 2016, Duchy County receives a $500,000 contribution from the local chapter of Homeless No More. A trust agreement specifying that the income from the contribution be distributed each May 15 to the downtown homeless shelter accompanies the cont
> On January 1, 2016, J. G. Monee created a student aid trust fund to which he donated a building with a fair value of $400,000 (his cost was $250,000), bonds having a market value of $500,000, and $100,000 cash. The trust agreement stipulated that princip
> The City of Laramee established a tax agency fund to collect property taxes for the City of Laramee, Bloomer County, and Bloomer School District. Total tax levies of the three governmental units were $200,000 for 2016, of which $60,000 was for the City o
> 1. Charges for services are a major source of revenue for: a A debt service fund b A trust fund c An enterprise fund d A capital projects fund 2. A city provides initial financing for its enterprise fund with the stipulation that the amount advanced be
> For an enterprise fund, note how each of the following transactions affects (a) net investment in capital assets (net of related debt), (b) restricted net position, and (c) unrestricted net position. (Record N/A if there is no effect on the net position
> What is the role of a subsidiary ledger in a governmental entity?
> Assume that supplies on hand at the beginning of the year amount to $60,000 and that supply purchases during the year are $400,000. Supplies on hand at year-end are $40,000, and the consumption basis of accounting for supplies is used. What adjusting ent
> For each of the following events or transactions, prepare the necessary journal entry or entries, and identify the fund or funds that will be affected. 1. A governmental unit collects fees totaling $4,500 at the municipal pool. The fees are charged to re
> You have been hired as trustee for the testamentary trust created by the will of Tom Josephson. The trust is created on June 30, 2015. (Use the information provided in P 23-6 and P 23-7.) The trust initially invests the proceeds from the estate in a chec
> How are capital leases recorded in governmental funds?
> Which funds may be used to account for the activities of a general governmental special assessment construction project with long-term financing? Explain.
> How do special assessment levies differ from general tax levies?
> The Town of Lilehammar has $3,000,000 of 6 percent bonds outstanding. Interest on the general obligation, general government indebtedness is payable semiannually each March 31 and September 30. December 31 is the fiscal year-end. Record the following tra
> The following information regarding the fiscal year ended December 31, 2016, was drawn from the accounts and records of the Volendam County general fund: Revenues and Other Asset Inflows Taxes.............................................................
> The following information was abstracted from the accounts of the general fund of the City of Lahti after the books had been closed for the fiscal year ended June 30, 2016: ADDITIONAL INFORMATION: The budget for the fiscal year ended June 30, 2016, pro
> The following summary of transactions was taken from the accounts of the Oslo School District general fund before the books had been closed for the fiscal year ended June 30, 2016: ADDITIONAL INFORMATION: 1. The estimated taxes receivable for the year
