Exam 4: Recognizing Revenues in Governmental Funds

Under GAAP, investment income for governments must include

The City of Katerah maintains its books and records in a manner that facilitates the preparation of fund financial statements. Prepare all necessary journal entries to record the city's revenues from the following transactions for the year ended December 31, 2017. a.) On January 15, the city received notification that it had been awarded a $300,000 federal grant to assist in the operation of its "Meals on Wheels" program. The federal government expects to send the cash in about three months. This is not a reimbursement type grant and all eligibility requirements have been met. b.) In February the city spent $31,000 on "Meals on Wheels." c.) In March, fines of $1,800 were issued for parking tickets. Payment must be made within 30 days, when the city has an enforceable legal claim to the amounts. d.) In April, the city received the $300,000 grant from the federal government. e.) In April, the city received $1,200 cash in payment of parking tickets issued in March. In addition, $100 of tickets was contested and court dates have been set. Also, the city expects another that $100 of tickets will be uncollectible but the remaining amounts will be paid eventually. f.) Restaurant licenses are issued for a one-year period, from July 1 to June 30. The license fees are used to pay restaurant inspectors. In June, the city received $11,000 in restaurant license fees.

Under the modified accrual basis of accounting, the amount of property tax revenues that should be recognized by a government in the current year related to the current-year levy will be

Under the accrual basis of accounting, imposed nonexchange revenues (such as fines) should be recognized

Current financial resources include cash and receivables but not investments.

Ad valorem taxes are taxes that are based on value.

A city that has a 12/31 fiscal year end has adopted a policy of recognizing property tax revenue consistent with the 60-day rule allowable period under GAAP. Property taxes of $600,000 (of which none are estimated to be uncollectible) are levied in October 2016 to finance the activities of fiscal year 2017. Property taxes are due in two installments June 20 and December 20. Cash collections related to property taxes are as follows: The total amount of property tax revenue that will be recognized in the government-wide financial statements in 2017 is:

During 2017, the city issued $300 in fines for failure to keep real property in 'acceptable' condition. During that period the city spent $200 to mow and clean up the unoccupied properties for which the fines were assessed. The city estimates that $30 of the fines issued in 2017 will be uncollectible. During 2017 the city collected $230 related to 2017 fines and $20 related to 2016 fines. The amount of revenue that the city should recognize in its 2017 governmental fund financial statements related to fines is

Last year a city received notice of a $150,000 grant from the state to purchase vehicles to transport physically challenged individuals. During the current year the city received the entire $150,000, purchased a bus for $65,000, and issued a purchase order for a van for $60,000. The grant revenue that the city should recognize on the government-wide financial statements in the current year is

Which of the following are not characterized as non-exchange revenues?

The budgetary measurement focus of governments is determined by applicable state or local laws.

As used in governmental accounting, interperiod equity refers to a concept of

Which of the following are derived tax revenues?

Payments made to a state pension plan by the state government on behalf of a local government should

A city levies a 2 percent sales tax. Sales taxes must be remitted by the merchants to the City by the twentieth day of the month following the month in which the sale occurred. Cash received by the city related to sales taxes is as follows: Assuming the city uses the same period to define "available" as the maximum period allowable for property taxes, what amount should it recognize in the governmental fund financial statements as sales tax revenue for the fiscal year ended 12/31/17?

A government is the recipient of a bequest of a multi-story office building that the government intends to use as a new city hall. The building has a historical cost of $850,000; a book value in the hands of the benefactor of $700,000; and a fair value of $1,050,000. The city should recognize on its government-wide financial statements donations revenue of

A city levies a 2 percent sales tax that is collected for them by the state. Sales taxes must be remitted by the merchants to the state by the twentieth day of the month following the month in which the sale occurred. The state has a policy of remitting sales taxes to the city within 30 days of collection by the state. Cash received by the state related to sales taxes is as follows: Assuming the city uses the same period to define "available" as the maximum period allowable for property taxes, what amount should it recognize as sales tax revenue in its government-wide financial statements for the fiscal year ended 12/31/17?

During 2017, a state has the following cash collections related to state income taxes 1/15/18 payroll withholdings and estimated payments related to 2017 income $ 30 2/15/18 payroll withholdings and estimated payments related to 2017 income $ 35 3/15/18 payroll withholdings and estimated payments related to 2017 income $ 25 4/15/18 Balance of 2017 (net of $5 refunds) income taxes $ 45 Assuming that the state defines "available" as the maximum period allowable for property taxes, what is the amount of revenue that will be recognized in the 2017 government-wide financial statements related to state income taxes?

A city is the recipient of a cash bequest of $500,000 that must be used to plant flowers and shrubs in the city parks. During the year only $200,000 is actually received from the bequest and $150,000 is spent on shrubs. The amount that should be recognized as revenue by the city in its government-wide financial statements in the current year is

State governments should recognize food stamp revenue