Exam 20: Accounting for State and Local Governmental Units - Governmental Funds

Use the following information to answer the question(s) below. The town of Mayberry receives a gift of $500,000 in bonds. The contributor instructs that the principal should remain intact, but the annual interest income of $50,000 can be used for the maintenance of the zoo animals. -When the donation of bonds is received,what account should be debited?

Under accrual accounting,revenues are generally recognized in the period in which they become measurable and available to finance expenditures of the period.

A pre-closing trial balance included the following account balances for Simpli City: Due from other funds \ 3,500 Fund balance - unassigned 14,000 Estimated revenues 20,000 Revenues 22,000 Appropriations 18,000 Expenditures - current year 19,000 Expenditures - prior year 1,500 Other Financing Source - Nonreciprocal transfer in 1,000 Required: Prepare the necessary closing entries for the General Fund.

A restricted fund balance represents amounts that can only be spent for the specific purposes stipulated by constitution,external resource providers,or through enabling legislation.

Use the following information to answer the question(s) below. The town of Mayberry receives a gift of $500,000 in bonds. The contributor instructs that the principal should remain intact, but the annual interest income of $50,000 can be used for the maintenance of the zoo animals. -What type of fund should be used to account for the gift of bonds and the interest income?

When the interest income of $50,000 is received,what account should be credited?

Under the modified accrual basis of accounting,fixed assets are recorded in the general fund and appear in the fund statements.

The following information regarding the fiscal year ended September 30,2014,was drawn from the accounts and records of the Mayberry County general fund: Revenues and other asset inflows: Expenditures and other asset outflows: Payment to debt service fund to cover future debt Required: Prepare a statement of revenues,expenditures,and changes in fund balance for the Mayberry County general fund for the year ended September 30,2014.

Capital project funds may be used for any capital facilities or other capital assets.

Permanent funds are normally for nonexpendable resources set aside for support of a government's programs or citizenry.

Bounty County had the following transactions in 2014. 1.The budget for the county was approved,showing estimated revenues of $320,000 from local income taxes,and total estimated expenditures of $316,000. 2.Tax bills were mailed amounting to $326,000,which are due in 60 days.All but 2% was expected to be collectible. 3.Taxes collected prior to the due date amounted to $260,800.The balance was delinquent. 4.$4,200 of taxes due were determined to be uncollectible and written off. 5.The year-end books were closed,with the expectation that the remaining taxes due would be collected evenly over the first two months after the fiscal year end. Required: Prepare the journal entries for the General Fund for the transactions.

The proper sequence of events is

What statements are required for Government-wide financial statements?

A Capital Projects Fund awards the construction of a building to a construction contractor at a contract cost of $1,000,000.What entry is prepared by the Capital Projects Fund?

Peking County incurred the following transactions during 2014: 1.Marketable securities were donated to support the county's bike and nature trails.The donor acquired the securities for $35,000 ten years earlier; however,their current market value was $200,000.The donor specified that all income from the securities be used for the trails.The principal is to be held intact for an indefinite period of time. 2.Computer equipment was ordered for general fund departments.The estimated cost was $48,000. 3.The county received the computer equipment.The actual cost was $47,750,of which $42,000 was paid to the vendor before year-end. 4.The county sold a (general government)dump truck that originally cost $55,000.The county sold the truck at auction for $3,300.The book value of the truck at the time of sale was $0. 5.The government leased equipment for the general government under a capital lease agreement.The present value of the minimum lease payments was $120,000.The county made an initial down payment of $10,000. Required: Prepare journal entries for each of the above transactions.Identify the appropriate fund or funds used by Peking County.

GASB 54 requires that a special revenue fund balance be classified as nonspendable,restricted,encumbered or assigned.

Governments must record a liability for uncollected taxes instead of revenues for uncollected taxes if the taxes are going to be collected

At any point in time,a government will be able to spend an amount equal to

For each of the following transactions relating to the startup of a community pool,determine the fund(s)being affected and prepare the appropriate journal entry for each.Be sure to note the fund type with each journal entry prepared. 1.General obligation bonds are issued at face value of $500,000 to construct a new community pool. 2.Cash of $100,000 is received from a state grant.Grant is set up to support the construction of the community pool. 3.A community fund-raiser by a citizens' group raises $50,000 which is donated to the pool fund,with the restriction placed on it that only earnings are to be used for lifeguard wages,and the principal may not be used until such time as the pool ceases to operate,at which time the principal will revert to the general fund. 4.Construction is completed and the contractors invoices received,totaling $578,000.The invoices are paid within 60 days. 5.The balance of funds from the general obligation bonds and state grant that was not used is transferred to the General Fund.

Which of the following represents the recording of a budget in the accounts of the General Fund?