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

Which criteria must be met to be considered a special purpose government? (1) Have a separately elected governing body (2) Be legally independent (3) Be fiscally independent

The employees of the City of Raymond earn vacation compensation that totals $1,500 per week. During 2013, $30,000 in vacation time was taken and $48,000 is expected to be used during the latter part of next year. On fund financial statements, what liability should be reported at the end of 2013?

The City of Nextville operates a motor pool serving all city-owned vehicles. The motor pool bought a new garage by paying $29,000 in cash and signing a note with the local bank for $280,000. Subsequently, the motor pool performed work for the police department at a cost of $17,000, which had not yet been collected. Depreciation on the garage amounted to $20,000. The first $12,000 payment made on the note included $4,800 in interest. Required: Prepare the journal entries for these transactions that are necessary to prepare government-wide financial statements.

Drye Township has received a donation of a rare painting worth $1,000,000. For Drye's government-wide financial statements, three criteria must be met before Drye can opt not to recognize the painting as an asset. Which of the following is not one of the three criteria? (1) The painting is held for public exhibition, education, or research in furtherance of public service, rather than financial gain. (2) The painting is scheduled to be sold immediately at auction. (3) The painting is protected, kept unencumbered, cared for, and preserved.

What is meant by the term legally independent?

The employees of the City of Raymond earn vacation compensation that totals $1,500 per week. During 2013, $30,000 in vacation time was taken and the remainder is expected to be used during the latter part of next year. In the government-wide financial statements, assuming there was no beginning balance, what liability should be reported at the end of 2013?

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

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. What is the journal entry that should be recorded on December 31, 2013 for Government-wide Financial Statements?

Which of the following is not a criterion of a capital lease?