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

The City of Attross entered the following transactions during 2014: 1.The city authorized a bond issue of $2,500,000 par to finance construction of a fountain and pavilion in the city square.The bonds were issued for $2,560,000.The premium was transferred to the fund for which the debt will be serviced.(This was a nonreciprocal transfer.) 2.The city entered into a contract for construction of the fountain at an estimated cost of $2,425,000. 3.The city received and paid a bill for $2,445,000 from the contractor upon completion of and approval of the fountain. 4.The unused bond proceeds were set aside for debt service on the bonds.Accordingly,those resources were paid to the appropriate fund (nonreciprocal). Required: Prepare journal entries for each of the above transactions.Identify the appropriate fund or funds used by Attross.

When a city enters into a capital lease for a fixed asset for the general government,

Address the following situations separately. 1.For the budgetary year beginning July 1,2014,Coastal City expected the following cash flow resources: In the budgetary entry,what amount did Coastal City record for estimated revenues? 2.During the fiscal year ended June 30,2014,Western County issued purchase orders totaling $7,000,000.Western County received $6,500,000 of invoiced goods at the encumbered amounts and paid $6,100,000 toward them before year-end. How much were Western County's encumbrances on July 1,2014? 3.The following information pertains to property taxes levied ($1,035,000 total)by Southern Township for the calendar year 2014: What amount did Southern Township report for property tax revenues in 2014? 4.The following information pertains to Northern City's general fund for 2014: At what amount will Northern City's total fund balance increase (decrease)in 2014?

The City of Electri entered the following transactions during 2014: 1.Borrowed $120,000 for a six-month term,to be paid upon receipt of property tax payments which were previously billed. 2.Used the funds borrowed to purchase a new fire truck.The truck is expected to have a 15-year useful life,and a $5,000 residual value. 3.Received $90,000 cash from a state grant.Funds are restricted for the purchase of a second fire truck. 4.Used the grant funds received to purchase a second fire truck.The truck is expected to have a 15-year useful life,and a $5,000 residual value. 5.Nonreciprocal transfer of $50,000 to the Debt Service Fund to be used toward repayment of the note. Required: Prepare the journal entries in the General Fund for the transactions.

Uncollectibles,such as taxes,are classified as revenue adjustments in government accounting.

Normal practice for governmental accounting is to record expenditures when the related fund liability is incurred under a modified accrual basis.

The proceeds from a bond issuance for the construction of a new public school should be recorded in the ________ fund at the time the bonds are sold.At the time of the bond issue,the debit is to cash and the credit is to ________.

When government entities prepare financial statements using accrual basis the focus is on all economic resources to assist in long-term financial and operational accountability.