Exam 5: Recognizing Expenditures in Governmental Funds

Culver City recognizes as revenues/expenditures those amounts collected/paid during the year or within 60 days of fiscal year-end.The City offers a pension benefit to its employees who meet certain age and years of employment criteria.The City participates in the State Pension Plan.The City's actuarially determined contribution requirement to the State Pension Plan for the fiscal year ended 6/3/11 is $5 million.Due to cash inflow shortages the City, which budgeted $5 million for pension payments, paid only $4 million in the fiscal year ended 6/30/11.The City paid the remaining amount on September 30, 2011.Assuming the City maintains its books and records in a manner that facilitates the preparation of the government-wide financial statements, what is the appropriate entry to record the pension payments and recognize any associated liability?

Star City leased a bulldozer for use in activities accounted for in the General Fund.The City paid $40,000 and agreed to pay $40,000 per year for 3 years.The bulldozer has a useful life of six years.The lease qualified as a capital lease.Assuming that the city maintains is books and records in a manner that facilitates the preparation of the government-wide financial statements, the appropriate entry at the date of acquisition would be

Use the following information to Questions Lincoln City has a 6/30 fiscal year-end.The City has a policy of recognizing revenues/ expenditures when collected/paid or if expected to be collected/paid within 60 days of year-end. The City has a sick leave benefit policy for its employees.The policy allows City employees one day of paid sick leave per month and permits them to accumulate sick leave they do not take.Sick leave vests at the completion of the fifth year of employment, and unused sick leave is paid in cash upon termination or retirement.During the fiscal year ended 6/30/11, City employees who are paid from the General Fund, earned $2.8 million of sick leave, of which $1.0 was taken.Of the balance, the City estimates $.2 million will be taken in the next sixty days, $.6 million will be taken in the next five years, $.4 million will vest, and $.6 million will never be taken. -The amount of sick pay expense that should appear on the government-wide financial statements for the fiscal year ended 6/30/11 is

On July 1, Gilbert County bought computer equipment for use in the administrative offices of the County.The equipment has an estimated useful life of three years and salvage of $10,000.Gilbert County has a 6/30 fiscal year-end.Assuming that the County maintains its books and records in a manner that facilitates the preparation of fund financial statements, the $85,000 cost of this equipment would require which of the following entries?

State employees earn $10 million in vacation leave.$7 million is paid in the current year and the remaining amount is deferred to future years.Which of the following the accounts will be credited in the general fund entry and the government-wide entry? General Fund Government-wide a Cash Cash \& Accrued Vacation Pay b Cash \& Accrued Vacation Pay Cash c Cash Cash d Cash No Entry e No Entry Cash

Government-wide statements present revenues and expenses from the perspective of the government, not of individual funds.

Use the following information to Questions Lincoln City has a 6/30 fiscal year-end.The City has a policy of recognizing revenues/ expenditures when collected/paid or if expected to be collected/paid within 60 days of year-end. The City has a sick leave benefit policy for its employees.The policy allows City employees one day of paid sick leave per month and permits them to accumulate sick leave they do not take.Sick leave vests at the completion of the fifth year of employment, and unused sick leave is paid in cash upon termination or retirement.During the fiscal year ended 6/30/11, City employees who are paid from the General Fund, earned $2.8 million of sick leave, of which $1.0 was taken.Of the balance, the City estimates $.2 million will be taken in the next sixty days, $.6 million will be taken in the next five years, $.4 million will vest, and $.6 million will never be taken. -The amount of sick pay expenditure that should appear on the General Fund financial statements for the fiscal year ended 6/30/11 is

Shoshone County uses the consumption method to account for supplies.At the beginning of the year the City had no supplies on hand.During the year the City purchased $450,000 of supplies for use by activities accounted for in the General Fund.The City used $300,000 of those supplies during the year.At fiscal year-end the appropriate account balances on the government-wide financial statements would be

The City of Roswell has a 6/30 fiscal year-end.The City uses the consumption method for recognizing inventories and prepayments.On July 1, 2010, the City leased computer equipment for use in the City's general activities.The lease is a three-year lease that qualifies as an operating lease.The City prepaid the entire three-year rental fee of $45,000.At June 30, 2011, the appropriate account balances in the General Fund associated with this transaction would be

Several years ago, Grant County was sued by a former County employee for wrongful discharge.Although it was to be contested by the County, at the time of the lawsuit the attorneys believed that the County was likely to lose and the estimated amount of the ultimate judgment would be $100,000.This year, the case was finally settled with a judgment against the County of $150,000, which was paid.Assuming that the County maintains its books and records in a manner to facilitate the preparation of its government-wide financial statements, the entry in the current year should be

The City of Hiawatha issued $10 million of term bonds as of April 1, 2008.The bonds bear interest at 6%, due and payable each October 1 and April 1.Assuming the City maintains its books and records in a manner that facilitates the preparation of its fund financial statements the appropriate entity to record interest on the debt at June 30, 2011 the City's fiscal year-end is

Employees of the General Fund of Scott City earn ten days of vacation for each 12 months of employment.The City permits employees to carry the vacation days forward as long as they wish.During the current year employees earned $800,000 of vacation benefits, of which the City estimates that $500,000 will be taken in the next year and the balance will be carried forward.Assuming that the City maintains its books and records in a manner that facilitates the preparation of its government-wide financial statements, which of the following entries should be made to record the vacation pay earned during the current period?

Culver City recognizes as revenues/expenditures those amounts collected/paid during the year or within 60 days of fiscal year-end.The City offers a pension benefit to its employees who meet certain age and years of employment criteria.The City participates in the State Pension Plan.The City's actuarially determined contribution requirement to the State Pension Plan for the fiscal year ended 6/30/11 is $5 million.Due to cash inflow shortages the City, which budgeted $5 million for pension payments, paid only $4 million in the fiscal year ended 6/30/11.The City paid the remaining amount on September 30, 2011.Assuming the City maintains its books and records in a manner that facilitates the preparation of its fund financial statements, what is the appropriate entry to record the pension payments and recognize any associated liability?

State University, a very large public university, has a policy of granting faculty members a one-year sabbatical leave after a period of seven years of continuous employment.The leave is to be used for further study, research, or service.During the fiscal year ended 6/30/11, the university paid $3 million to faculty members on sabbatical leave and estimated that faculty members currently not on sabbatical leave earned $3.5 million toward sabbatical leaves they are likely to take in the future.The amount of sabbatical expenditures for the year ended 6/30/11 should be

The City of Holbrook transferred $100,000 from the General Fund to the Debt Service Fund for payment of interest.The appropriate entry in the Debt Service Fund to record this transfer would be

Which of the following funds would use the modified accrual basis of accounting in preparing its fund financial statements?

Assume that the City of Juneau maintains its books and records to facilitate the preparation of its government-wide financial statements.The City pays its employees bi-weekly on Friday.The fiscal year ended on Wednesday, June 30.Employees had been paid on Friday, June 25.The employees paid from the General Fund had earned $90,000 on Monday, Tuesday, and Wednesday June 28, 29, and 30.They will earn $60,000 on Thursday and Friday July 1 and 2.What entry, if any, should be made on June 30?

Use the following information to Questions Lincoln City has a 6/30 fiscal year-end.The City has a policy of recognizing revenues/ expenditures when collected/paid or if expected to be collected/paid within 60 days of year-end. The City has a sick leave benefit policy for its employees.The policy allows City employees one day of paid sick leave per month and permits them to accumulate sick leave they do not take.Sick leave vests at the completion of the fifth year of employment, and unused sick leave is paid in cash upon termination or retirement.During the fiscal year ended 6/30/11, City employees who are paid from the General Fund, earned $2.8 million of sick leave, of which $1.0 was taken.Of the balance, the City estimates $.2 million will be taken in the next sixty days, $.6 million will be taken in the next five years, $.4 million will vest, and $.6 million will never be taken. -The amount of sick pay liability that should appear on the General Fund balance sheet at 6/30/11 is

When accounting for inventory items in a governmental fund, GASB standards permit the use of the consumption method only.