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

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.

On January 1,2014,the General Fund contributes $200,000 cash to the Internal Service Fund.On January 1,2014,the General Fund also loans $100,000 cash to the Internal Service Fund.On January 1,2014,what journal entry does the Internal Service Fund prepare?

Enterprise funds use full accrual accounting procedures.

The fixed assets and long-term liabilities associated with Proprietary Funds are reported on the

The trust fund for a school library is required to prepare financial statements that include

Thoroughgood County has a municipal golf course and tennis club which is funded by the membership fees it charges.The club also has 6% bonds outstanding amounting to $20,000,000 on which it pays interest semi-annually.The club had the following transactions. 1.An addition to the golf clubhouse was added for $2,000,000,funded out of operations. 2.The following expenses were incurred and paid: $80,000 wages; $10,000 payroll taxes; $45,000 water bill; and $12,000 equipment repair. 3.Interest on the bonds was paid amounting to $600,000. 4.$5,000,000 of operating cash excess was repaid to the general fund for a previous loan. 5.Depreciation of $500,000 was recorded for the buildings. Required: Prepare the necessary journal entries for each of the above transactions for the Enterprise Fund.

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.

Based upon the flow information provided below for the year ending December 31,2014,prepare a cash flow statement for the Downtown City Motor Pool,an internal service fund. Cash received from customers \8 30,000 Cash received from General Fund (noncapitalloan) 20,000 Interest reventue received 1,000 Cash received from short-term note payable (not used for capital assets) 40,000 Payments to employees 450,000 Payments to suppliers 250,000 Cash paid to the General Fund - noncapital loan 65,000 Payments for capital improvements 60,000 Interest paid on short-term note payable above 2,000 Principal paid on capital debt 50,000 Interest paid on capital debt 5,000 Unrestricted Cash (and cash equivalents), Tanuary 1, 2014 13,000

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

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

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.

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.

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.

Restricted net position for proprietary funds is composed of restricted assets reduced by liabilities and deferred inflows of resources related to those assets.

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.

Jefferson County had the following transactions in 2014. 1.$27,000 in membership fees was collected at the municipal pool. 2.A county collects $130,000 in sales taxes on behalf of the cities within its boundaries. 3.A $500,000 bond offering was issued at 102 to fund the construction of a new city hall.The premium on the bonds was transferred to the Debt Service Fund (nonreciprocal). 4.A private foundation contributes a stock portfolio with a fair value of $100,000 to the county.A trust agreement specifies the earnings on the fund is to be used by the local park which is owned and operated by a private foundation,and the principal is to be held intact indefinitely. 5.The county sends bills out for water and sewer provided to residents,amounting to $340,000. 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.

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

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

An adjusted trial balance is provided below for the Dade County copy services department at June 30,2014. Cash \ 21,000 Due from Enterprise Fund 6,000 Due from Debt Service Fund 2,000 Supplies inventory 5,000 Supplies used 3,000 Equipment 32,000 Salary expense 25,000 Utility expense 9,000 Depreciation expense 6,000 Operating transfer to General Fund Accumulated depreciation \ 24,000 Accounts payable 2,000 Advance from General Fund (not for capital assets) 10,000 Capital Contribution from General Fund 1,000 Net position (beginning) 28,000 Revenue - services billed 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.

The four cash flow categories required in an Enterprise Fund's Statement of Cash Flows are listed below and assigned a letter code. A)Cash flows from operating activities B)Cash flows from noncapital financing activities C)Cash flows from capital and related financing activities D)Cash flows from investing activities Required: Use the correct letter code to indicate where each of the following ten items associated with an Enterprise Fund should be reported in the Statement of Cash Flows. 1.An enterprise fund's fixed asset was sold for cash. 2.Cash paid to suppliers for goods. 3.Paid principal,$100,000,and interest,$5,000,on a mortgage. 4.Cash proceeds from sale of investments,$65,000. 5.Cash paid for new equipment,$18,000. 6.Cash received from the general fund; restricted to cover part of the cost of plant expansion,$900,000. 7.Cash received from another fund as a 6-month loan for the sole purpose of financing purchase of equipment,$47,000. 8.Cash proceeds from issuing bonds for an enterprise fund's construction project. 9.Cash paid to employees for salaries. 10.Cash received from interest earned on investments.