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

Governments use proprietary funds to account for business-type activities.

At December 31,2014,an Enterprise Fund has the following adjusted accounts outstanding: Insurance Expense \ 2,000 Depreciation Expense 3,000 Supplies Expense 10,000 Salaries Expense 100,000 Service Revenues 123,000 When preparing the closing entry for the temporary accounts at December 31,2014,the Enterprise Fund's accountant will

The City of Sill established an Internal Service Fund to provide cleaning services to all city offices and departments.The following transactions took place with respect to this event. 1.The General Fund contributed cash of $49,000 to the Internal Service Fund.The General Fund provided a $10,000 loan to the Internal Service Fund. 2.On January 1,2014,the Internal Service Fund acquired a floor waxing machine for cash of $5,000.It has a 5 year life with no salvage value,and the city uses straight-line depreciation on their assets. 3.The cleaning services department billed other government agencies and departments $226,000 and collected $187,000. 4.The cleaning services department incurred and paid the following expenses: cleaning personnel wages,$65,000; payroll taxes,$10,000; cleaning supplies,$13,000; and office rental and utilities,$77,000.The cleaning services department also repaid the general fund for the loan. 5.The cleaning services department prepared the journal entry to depreciate their assets for the year ending December 31,2014. Required: Prepare the necessary journal entries for each of the above transactions for the Internal Service Fund.

Interest payments on loans outstanding that do not relate to acquiring,constructing or improving capital assets are classified as ________ on the cash flow statement for an Enterprise Fund.

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

Enterprise funds primarily provide goods and services to government agencies.

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.

GASB Statement No.34 mandates that the indirect method be used for the cash flow statement of proprietary funds.

A trust fund was created to assist local students in financial need.The following transactions occurred in the trust. 1.The committee forming the fund was able to raise $700,000 and invested the funds so that the principal would remain indefinitely,and the earnings would be used to aid needy students. 2.During the year,the fund earned $65,000 interest.Earnings remain invested in the trust until withdrawn to distribute,so the interest was invested. 3.$50,000 of the investments were sold,withdrawn,and distributed to provide scholarships. 4.The fund-raising committee contributed an additional $200,000 cash to the fund.This cash was deposited into the account and invested. 5.Interest earned but not yet deposited into the investment account was accrued at $17,000. Required: Prepare the necessary journal entries for each of the above transactions for the trust fund.

Proceeds from bonds issued for the construction of capital assets are classified on the Statement of Cash Flows for an Enterprise Fund as

The accounting equation for proprietary funds: Current Assets - Noncurrent Assets + Current Liabilities - Noncurrent Liabilities = Net position.

The accounting equation for the Proprietary fund is

GASB requires ________ method(s)for the cash flow statement for proprietary funds.

GASB Statement No.9 separates financing activities on the cash flow statement into two components: noncapital and capital related.

What basis of accounting is used by fiduciary funds?

Fiduciary funds are to account for assets held in a trustee or agency capacity on behalf of others internal to the governmental entity.

What basis of accounting is used by proprietary funds?

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

Based upon the cash flow information provided below for the year ended December 31,2014,prepare a cash flow statement for the Bloomfield Municipal Golf Course,an enterprise fund. Cash received from short-term note payable (not used

In a Statement of Cash Flows for a proprietary fund,what are the primary categories of cash flow activities?