Exam 21: Accounting for State and Local Governmental Units - Proprietary and Fiduciary Funds

Prepare journal entries to record the following grant-related transactions of an Enterprise Fund. 1.Received an operating grant in cash from the state,$2,500,000. 2.Incurred and paid qualifying operating expenses on the state grant program,$1,600,000. 3.Received a federal grant to finance construction of a plant,$4,500,000 (cash received in advance). 4.Incurred and paid construction costs on the plant,$3,000,000.The plant is not completed.

An adjusted trial balance is provided below for the Dade County copy services department at June 30,2014. Required: 1.Prepare a statement of revenues,expenses and changes in net position for the copy services department for the year ended June 30,2014. 2.Prepare a statement of net position for the copy services department at June 30,2014.Assume all assets are not externally or internally restricted.

Willborough County had the following transactions in 2014. 1.A central motor pool was established with a $200,000 nonreciprocal transfer from the General Fund. 2.The water and sewer authority,which provides services to residents for a fee,issued a bond offering at $750,000 par.Bonds proceeds are restricted to renovating the treatment facility. 3.Willborough received a grant from the state to be used for renovation of the courthouse amounting to $800,000.The General Fund will temporarily provide $100,000 cash,because the grant is set up on a reimbursement basis and will not be distributed until proper expenditures are documented. 4.Willborough's central motor pool bills out automobile usage to various government agencies amounting to $42,000. 5.The General Fund transfers $67,000 out of the operating budget to fund the county employees' pension plan. Required: Prepare the necessary journal entries for each of the above transactions for all funds affected.Be sure to identify the fund type for each entry.

Journalize the following municipal zoo transactions in the Lackluster County Enterprise Fund: 1.The zoo issued $1,000,000 of 5% revenue bonds at 99 on July 1,2014 (an interest payment date).The bond proceeds are to be used for a new polar bear exhibit and the issue will mature in 20 years.Interest is paid on January 1 and July 1. 2.Depreciation for the year-ended December 31,2014 included $175,000 for buildings and $105,000 for outdoor exhibit areas. 3.The zoo paid $800,000 in construction costs for the new exhibit.The exhibit is still under construction. 4.Interest on the revenue bonds was accrued at year-end,December 31,2014.Straight-line amortization is used for bond discounts and premiums.

The City's municipal golf course had the following transactions. 1.Received a beautification(operating)grant from the state for $600,000.Received cash of $600,000. 2.Incurred and paid qualifying expenses under the state grant program in (1)above of $280,000. 3.Incurred and paid construction costs on an uncompleted clubhouse for $1,200,000. 4.Received $1,000,000 cash from a grant to assist with construction costs for the clubhouse. Required: Given that the golf course is operated based on user fees for upkeep,prepare the necessary journal entries for each of these transactions.

Prepare journal entries to record the following grant-related transactions of the municipal swimming pool,which is funded primarily by membership fees. 1.Received an operating grant in cash from the state for $200,000,to be used for life-saving and first-aid training. 2.Incurred and paid qualifying expenses on the state grant program by providing training,$165,000. 3.Received a federal grant to finance purchase of an energy efficient heating system for the pool,$120,000 (cash received in advance). 4.New heating system installed and paid,$115,000.

The financial statements of proprietary funds are similar to business enterprises with the exception that proprietary funds do not

On the Statement of Net Position,in place of stockholders' equity,proprietary funds report

Static City started a department to provide copy,printing and mailing services for all departments and agencies of the city. During the fiscal year from July 1,2013 through June 30,2014,the copy services department had the following transactions: 1.Paper and toner inventory was purchased for $58,000,on account. 2.The paper and toner inventory physical count showed only $8,000 on hand at June 30,2014. 3.The department billed other departments for services rendered to them amounting to: General Fund,$43,000;Enterprise Fund,$24,000;Debt Service Fund,$21,000;and Trust Fund,$16,000.All receivables were collected with the exception of $6,000 from the Trust Fund which is expected to be collected in July,2014. 4.The department incurred and paid the following expenses: salaries and wages,$23,000;Electric,$8,000;Other operating expenses,$6,000.Also,$63,000 of the Accounts Payable were paid during the year. 5.Depreciation Expense on Equipment amounted to $6,000 for the year ending June 30,2014. 6.The department prepared the closing entry on June 30,2014. Required: For the fiscal year ended June 30,2014,prepare the journal entries to record the transactions for the Internal Service Fund.

At December 31,2014,an Enterprise Fund has the following adjusted accounts outstanding: When preparing the closing entry for the temporary accounts at December 31,2011,the Enterprise Fund's accountant will

What basis of accounting is used by fiduciary funds?

Proprietary funds are required to prepare financial statements that include: A.Statement of Activities B.Statement of Revenues,Expenditures and Changes in Fund Balance C.Balance Sheet D.Statement of Cash Flows E.Statement of Net Positions F.Statement of Revenues,Expenses and Changes in Net Position

Platinum City collects state sales taxes quarterly from local businesses and then gives the state revenue department the money at the end of the year.The sales taxes would go in Platinum City's

On January 1,2014,the Enterprise Fund for a local city receives an intergovernmental capital grant of $100,000 cash from the state government.Upon receipt of the cash,qualifying expenses of $100,000 for the operating grant will be incurred.What journal entry did the Enterprise Fund prepare on January 1,2014?

An enterprise fund collects $100,000 cash for customer deposits to insure timely payment for services.What journal entry did the enterprise fund prepare?

Prepare journal entries in an Internal Service Fund of Union County to record each of the following transactions. 1.Purchased equipment on September 1,2014 by paying $25,000 down and borrowing $100,000 on a 6%,2-year note. 2.In 2014,billed General Fund $620,000 for services provided.Billings to the Enterprise Fund totaled $165,000.All billings were collected by December 31,2014 except for $100,000 charged to the General Fund. 3.Accrued year-end adjustments at December 31,2014 for interest expense and depreciation.The useful life of the equipment is 5 years with no salvage value.

The accounting equation for the Proprietary fund is

What is a significant difference for agency funds when compared to governmental funds?

Journalize the following utility transactions in the Quest County Enterprise Fund: 1.Billings to external customers $1,600,000;billings to Quest County governmental funds $130,000. 2.Collected refundable deposits from new customers $10,000. 3.Collected 95% of all billings by fiscal year-end. 4.Refunded $4,000 in deposits to former customers. 5.Unbilled services to outside customers at year-end $14,000.

Journalize the following utility transactions in the Hazzard County Enterprise Fund: 1.The utility sold $4,000,000 of 6.5% revenue bonds at 98 on July 1,2014 (an interest payment date).The bond proceeds are to be used for new plant construction and the issue will mature in 20 years.Interest is paid semi-annually on July 1 and January 1. 2.Depreciation for the year-ended December 31,2014 included $300,000 for buildings and $190,000 for equipment. 3.The utility paid $600,000 in construction costs for the new plant. The plant is still under construction. 4.Interest on the revenue bonds was accrued at year-end,December 31,2014.Straight-line amortization is used for bond discounts and premiums.