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.

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

On January 1, 2011, the Enterprise Fund for a local city receives an operating grant of $100,000 cash from the state government.Upon receipt of the cash, qualifying expenses of $200,000 for the operating grant have been incurred.What journal entry did the Enterprise Fund prepare on January 1, 2011?

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

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.

Willborough County had the following transactions in 2012. 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.

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

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.

The financial statements of a proprietary fund are similar to those of a business enterprise except for

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, 2011 (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, 2011 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, 2011.Straight-line amortization is used for bond discounts and premiums.

What basis of accounting is used by fiduciary funds?

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

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

At December 31, 2011, 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

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

Jefferson County had the following transactions in 2012. 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.

On January 1, 2011, the General Fund contributes $200,000 cash to the Internal Service Fund.On January 1, 2011, the General Fund also loans $100,000 cash to the Internal Service Fund.On January 1, 2011, what journal entry does the Internal Service 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, 2011 by paying $25,000 down and borrowing $100,000 on a 6%, 2-year note. 2.In 2011, billed General Fund $620,000 for services provided.Billings to the Enterprise Fund totaled $165,000.All billings were collected by December 31, 2011 except for $100,000 charged to the General Fund. 3.Accrued year-end adjustments at December 31, 2011 for interest expense and depreciation.The useful life of the equipment is 5 years with no salvage value.

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

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