Exam 12: Accounting for State and Local Governments Part 2

The City of Wade has a fiscal year ending June 30. Examine the following transactions for Wade:(A.)On 6/5/21, Wade opens a new landfill. The engineers estimate that at the end of 12 years the landfill will be full. Estimated costs to close the landfill are currently $4,800,000.(B.)On 6/18/21, Wade receives a donation of a vintage railroad steam engine. The engine will be put on display at the local town park. A fee will be charged to actually climb up into the engine. The engine has been valued at $650,000.(C.)On 6/30/21, Wade estimates that the landfill is 2% filled.Determine and prepare the journal entries for the City of Wade for each lettered item for the purposes of preparing the government-wide financial statements.

Which item is not included on the government-wide Statement of Activities?

How is the Statement of Cash Flows for Proprietary Funds similar and dissimilar to a Statement of Cash Flows for a for-profit business?

Which statement is false regarding the government-wide Statement of Net Position?

Under GASB Statement No. 87, Leases, which of the following is false?

What is meant by the term fiscally independent?

A city starts a solid waste landfill during 2020. When the landfill was opened the city estimated that it would fill to capacity within 6 years and that the cost to cover the facility would be $1.8 million which will not be paid until the facility is closed. At the end of 2020, the facility was 15% full, and at the end of 2021 the facility was 35% full.On government-wide financial statements, which of the following are the appropriate amounts to present in the financial statements for 2021?

Which information must be disclosed regarding tax abatement agreements?i)The purpose of the tax abatement program.ii)The dollar amount of abatement and the names of recipients.iii)The type of tax being abated.

What is meant by the term legally independent?

What are the three broad sections of a state or local government's CAFR?

A local government's basic financial statements would include a statement of cash flows for all

The City of Ibiza maintains a collection of paintings of a former citizen in its City Hall building. During the year, one painting was purchased by the city for $3,000 at an auction using appropriated funds in the General Fund. Also during the year, a donation of a painting valued at $3,600 was made to the city.Prepare the journal entry/entries for the two transactions for the purposes of preparing the governmental fund financial statements.

What are the three broad sections of a state or local government's CAFR?

On December 31, 2020, the City of Oliver leases a large piece of construction equipment with a 25-year life for five years to use during a construction project. After the contract ends, the city must return the equipment to the lessor but has not guaranteed any residual value. The lease requires five annual payments of $40,000 per year beginning immediately. Oliver uses its own incremental borrowing rate of 10 percent per year because it does not know the implicit interest rate the lessor is charging. The present value of a $40,000 annuity due for five years at an annual interest rate of 10 percent is $166,795 (rounded).Prepare the journal entry/entries required for government-wide financial statements for this lease contract for 2020 and 2021.

Which of the following is a financial statement of a proprietary fund?

Which of the following is a section of the financial section of the comprehensive annual financial report (CAFR)of a state or local government?(1)Management's discussion and analysis (MD&A).(2)Required supplementary information (other than MD&A).(3)Basic financial statements and notes to financial statements.

What three criteria must be met before a governmental unit can elect to not capitalize and therefore not report a work of art or historical treasure as an asset?

What information is required in the financial section of a state or local government's CAFR?

Which of the following is not a step in reporting a pension liability?

Which statement is false regarding the Statement of Revenues, Expenditures, and Other Changes in Fund Balance when it is included with government-wide financial statements?