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

The following information regarding the fiscal year ended September 30,2011,was drawn from the accounts and records of the Mayberry County general fund: Required: Prepare a statement of revenues,expenditures,and changes in fund balance for the Mayberry County general fund for the year ended September 30,2011.

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

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.

1.Urban City issued $6 million of general obligation bonds at par to finance the construction of a city building.The bonds are 6%,10-year bonds,and interest is paid on June 30 and December 31. 2.The city transferred $3,600,000 from its General Fund to its Debt Service Fund to provide a portion of the resources needed to service the bonds. 3.The city paid the first interest payment to the bondholders. Required: Prepare journal entries for each of the above transactions.Identify the appropriate fund or funds used by the city of Urban.

The estimated revenues control account of Metro City's general fund is created when

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

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.

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

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.

Peking County incurred the following transactions during 2011: 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.

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

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.

Prepare journal entries to record the following grant-related transactions for a municipality special revenue fund. 1.Special Revenue Fund awarded an operating grant from the state,$2,500,000 (cash will be received after qualified expenditures are made). 2.Special Revenue Fund received funds of $1,600,000,temporarily transferred from the General Fund. 3.Incurred qualifying expenditures on the state grant program of $1,600,000 and paid them with funds temporarily transferred from the General Fund. 4.Received a federal grant to finance planting of trees in city,$4,500,000 (cash received in advance). 5.Incurred and paid cost of $3,000,000 for planting 10,000 trees in city.

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. -The proper sequence of events is

A pre-closing trial balance included the following account balances for Simpli City: Required: Prepare the necessary closing entries for the General Fund.

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

What statements are required for Government-wide financial statements?

When recording an approved budget into the accounts of the general fund,which of the following accounts would be credited?

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?

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?