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

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?

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

Bounty County had the following transactions in 2011. 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.

Carson County had the following transactions for their General Fund relating to the levy and collection of property taxes. 1.Property tax bills for $1,000,000 are sent to property tax owners.Taxes are due in 45 days.History shows that Carson County should expect 1.5% of the property taxes to be uncollectible. 2.$850,000 in property taxes is collected.The remaining receivables are past due. 3.An additional $80,000 of the delinquent taxes is collected. 4.Wrote off $10,000 of delinquent taxes determined to be uncollectible. Required: Prepare the journal entries in the General Fund for the transactions.

Old West City had the following transactions in fiscal 2011.Assume that all expenditures were properly appropriated in the fiscal 2011 budget. 1.A six-month loan was made to the special revenue fund from the general fund amounting to $28,000. 2.A purchase order for landscaping maintenance services was issued in the amount of $43,000. 3.A $10,000 nonreciprocal transfer was made to the debt service fund to pay interest amounts outstanding. 4.The final invoice for landscaping maintenance was received in the amount of $39,000, and it was scheduled to be paid in 30 days. 5.The city enters into a capital lease of fixed assets for the general government.The present value of the minimum lease payments equals $70,000. Required: Prepare the journal entries for the General Fund.

Match the following fund balance descriptions for a General Fund with the proper classification for a fund balance.Each classification may be used more than once.

The unadjusted trial balance for the general fund of the City of Jordan at June 30, 2011 is as follows: Supplies on hand at June 30, 2011 totaled $17,000.The $18,000 encumbrance relates to equipment ordered but not received by fiscal year-end. Required: Prepare a balance sheet for the general fund of the City of Jordan at June 30, 2011.

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?

Which statement below is incorrect with respect to the Government-wide financial statements?

Goodwill County had the following transactions for their General Fund in the first month of their fiscal 2012 year, which ends June 30, 2012. 1.The budget was approved, with $1,200,000 expected from property taxes, and another $5,000,000 expected from sales taxes.The budget showed these funds were expected to be spent on Salaries and Wages, $3,100,000; Utilities, $1,800,000; Rent, $900,000; and Supplies, $200,000. 2.Supplies were ordered in the amount of $33,000. 3.The electric bill was paid upon receipt in the amount of $75,000. 4.Property taxes were billed in the amount of $1,200,000, due on December 31.Bad debts are estimated at 1% of receivables. 5.Supplies were received, but the invoice amount was $35,000 and will be paid in 35 days.Supplies are used quickly and are not inventoried. 6.Property tax payments were received amounting to $100,000. 7.Payment was received from merchants for sales tax collections amounting to $400,000. Required: Prepare the journal entries for the General Fund that would be required for these transactions.

Middlefield County incurred the following transactions during 2011: 1.The county authorized a new general obligation bond issue of $5 million par to construct an office building with a contract price of $4,975,000.The bonds were issued for $4,980,000. 2.The county levied real property taxes of $10,000,000.Eighty-five percent of the net taxes were collected immediately.Two percent of the total levy was estimated to be uncollectible. 3.The office building was completed and the county paid the contract price to the contractor. 4.The General Fund transferred $500,000 to the Debt Service Fund. 5.The county paid $200,000 for interest on the bonds from the Debt Service Fund. Required: Prepare journal entries for each of the above transactions.Identify the appropriate fund or funds used by Middlefield County.

Assume you are preparing journal entries for the General Fund.What account should be debited when office supplies are ordered?

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

The City of Electri entered the following transactions during 2011: 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.

The City of Attross entered the following transactions during 2011: 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.

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

The General Fund transfers $50,000 cash to the Debt Service Fund to meet annual interest payments.What entry did the Debt Service Fund prepare?

The proper sequence of events is