Exam 12: Accounting for State and Local Governments, Part II

For the purpose of government-wide financial statements, the cost of cleaning up a government-owned landfill and closing the landfill

The City of Kamen 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 $2,000 at an auction using appropriated funds in the General Fund. Also during the year, a donation of a painting valued at $3,000 was made to the city. Required: Prepare the journal entry/entries for the two transactions for the purposes of preparing the fund financial statements.

The Town of Portsmouth has at the beginning of the year a $213,000 Net Asset balance, and a $52,000 Fund Balance. The following information relates to the activities within the Town of Portsmouth for the year of 2013. Prepare a Statement of Revenues, Expenditures and Changes in Fund Balances

The Town of Wakefield opened a solid waste landfill in 2012 that was at 20% capacity on December 31, 2012 and at 50% capacity on December 31, 2013. The city initially anticipated closure costs of $2.3 million but in 2013 revised the estimate of the closure costs to be $2.7 million. None of these costs will be incurred until the landfill is scheduled to be closed. Assuming the landfill is recorded within the General fund, what is the journal entry that should be recorded in the Fund Financial Statements on December 31, 2013?

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

For fund financial statements, what account is credited when a piece of equipment is leased on a capital lease?

A five-year lease is signed by the City of Wachovia for equipment with a seven-year life. The asset will be returned to the lessor at the end of the lease. The present value of the lease is $20,000, and annual payments of $5,411.41 are payable beginning on the date the lease is signed. The interest portion of the second payment is $1,604.75. The equipment is to be used in City Hall and was purchased from appropriated funds of the General Fund. What entry should be made for the government-wide financial statements one year from the date the lease is signed? A) Capital Lease Obligation 5,411.41 Cash 5,411.41 B) Interest Expense 1,604.75 Capital Lease Obligation 3,806.66 Cash 5,411.41 C) Expenditures - Interest 1,604.75 Expenditures - Lease Asset 3,806.66 Other Financing Sources - Capital Lease 5,411.41 D) Expenditures - Interest 1,604.75 Expenditures - Leased Asset 3,806.66 Cash 5,411.41 E) Equipment 5,411.41 Cash 5,411.41

Which of the following must be presented in the MD&A of a government?

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

The City of Wetteville has a fiscal year ending June 30. Examine the following transactions for Wetteville: (A.) On 6/1/13, Wetteville enters into a 5-year lease on a copying machine. The lease meets the criteria of a capital lease and carries an implied interest rate of 10%. The copier has a present value of $2,300. Wetteville has to put a $300 down payment on the lease at the beginning of the lease with monthly payments thereafter of $42.49. (B.) On 6/5/13, Wetteville opens a new landfill. The engineers estimate that at the end of 10 years the landfill will be full. Estimated costs to close the landfill are currently at $3,500,000. (C.) On 6/18/13, Wetteville 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 $500,000. (D.) On 6/30/13, Wetteville makes its first payment on the leased copier. The $42.49 payment includes $16.68 interest. (E.) On 6/30/13, Wetteville estimates that the landfill is 2% filled. Required: Prepare the journal entries for the above transactions, on the dates mentioned for each lettered item, for the purposes of preparing the government-wide financial statements.

A city starts a solid waste landfill during 2012. When the landfill was opened the city estimated that it would fill to capacity within 5 years and that the cost to cover the facility would be $1.5 million which will not be paid until the facility is closed. At the end of 2012, the facility was 20% full, and at the end of 2013 the facility was 45% full. On government-wide financial statements, which of the following are the appropriate amounts to present in the financial statements for 2013?

What three criteria must be met to identify a governmental unit as a primary government?

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

The Town of Portsmouth has at the beginning of the year a $213,000 Net Asset balance, and a $52,000 Fund Balance. The following information relates to the activities within the Town of Portsmouth for the year of 2013. Prepare a Statement of Activities

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

The City of Wetteville has a fiscal year ending June 30. Examine the following transactions for Wetteville: (A.) On 6/1/13, Wetteville enters into a 5-year lease on a copying machine. The lease meets the criteria of a capital lease and carries an implied interest rate of 10%. The copier has a present value of $2,300. Wetteville has to put a $300 down payment on the lease at the beginning of the lease with monthly payments thereafter of $42.49. (B.) On 6/5/13, Wetteville opens a new landfill. The engineers estimate that at the end of 10 years the landfill will be full. Estimated costs to close the landfill are currently at $3,500,000. (C.) On 6/18/13, Wetteville 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 $500,000. (D.) On 6/30/13, Wetteville makes its first payment on the leased copier. The $42.49 payment includes $16.68 interest. (E.) On 6/30/13, Wetteville estimates that the landfill is 2% filled. Required: Prepare the journal entries for the above transactions in the general fund, on the dates mentioned for each lettered item, for the purposes of preparing the fund financial statements.

Jones College, a public institution of higher education, must prepare financial statements

Which statement is false regarding the Balance Sheet for Fund Financial Statements?

A method of depreciation for infrastructure assets that allows the expensing of all maintenance costs each year instead of computing depreciation is called

A five-year lease is signed by the City of Wachovia for equipment with a seven-year life. The asset will be returned to the lessor at the end of the lease. The present value of the lease is $20,000, and annual payments of $5,411.41 are payable beginning on the date the lease is signed. The interest portion of the second payment is $1,604.75. The equipment is to be used in City Hall and was purchased from appropriated funds of the General Fund. What entry should be made for the government-wide financial statements on the date the lease is signed?