Test bank advanced financial accounting 8th chap018

To download more slides, ebook, solutions and test bank, visit http://downloadslide.blogspot.com Chapter 18 - Governmental Entities: Special Funds and Government-wide Financial Statements Chapter 18 Governmental Entities: Special Funds and Government-wide Financial Statements Multiple Choice Questions Riviera Township reported the following data for its governmental activities for the year ended June 30, 2009: Additional information available is as follows: All of the long-term debt was used to acquire capital assets Cash of $475,000 is restricted for debt service Based on the preceding information, on the statement of net assets prepared at June 30, 2009, what amount should be reported for total net assets? A $2,425,000 B $4,200,000 C $2,900,000 D $3,625,000 18-1 To download more slides, ebook, solutions and test bank, visit http://downloadslide.blogspot.com Chapter 18 - Governmental Entities: Special Funds and Government-wide Financial Statements Based on the preceding information, on the statement of net assets prepared at June 30, 2009, what amount should be reported for net assets invested in capital assets, net of related debt? A $4,200,000 B $2,900,000 C $2,825,000 D $3,300,000 Based on the preceding information, on the statement of net assets prepared at June 30, 2009, what amount should be reported for net assets, unrestricted? A $425,000 B $900,000 C $525,000 D $825,000 Which of the following funds use the accrual basis of accounting? A I only B II only C I and III only D I, II, and III A special revenue fund should be used in which of the following situations for a state government? A For sales taxes which are to be distributed to towns, cities, villages, etc of the state B For the proceeds of general obligation bonds which are to be used to construct major longlived fixed assets C For gasoline taxes which are to be used exclusively to repair state roads and bridges D For investments donated by a prominent citizen which are to be invested permanently, with income being used to support homeless people 18-2 To download more slides, ebook, solutions and test bank, visit http://downloadslide.blogspot.com Chapter 18 - Governmental Entities: Special Funds and Government-wide Financial Statements For which of the following funds are the principles and accounting most like those of the general fund? A Debt service fund B Internal service fund C Special revenue fund D Investment trust fund Which of the following items would not be reported on the financial statements of a special revenue fund? A Long-term productive assets B Expenditures and revenues C Vouchers payable and unreserved fund balance D Fund balance reserved for encumbrances and expenditures A city's museum is supported by a special tax levy and by user charges The user charges constitute only 10 percent of the resources needed to support the operations of the museum In which fund should the city account for its museum? A An enterprise fund B An agency fund C An expendable trust fund D A special revenue fund A tax collection fund that collects property taxes and then distributes them to local governmental units is an example of a(n): A trust fund B agency fund C internal service fund D permanent fund 18-3 To download more slides, ebook, solutions and test bank, visit http://downloadslide.blogspot.com Chapter 18 - Governmental Entities: Special Funds and Government-wide Financial Statements 10 Ponca City issued general obligation bonds to finance construction of a new city hall In the city hall capital projects fund, the proceeds of the general obligation bonds should be credited to: A Revenue-General Obligation Bonds B General Obligation Bonds Payable C Deferred Revenue-General Obligation Bonds D Other Financing Sources-Bond Issue Proceeds 11 The City of Fargo issued general obligation bonds to finance construction of a new fire station The bonds were issued at a premium In the fire station capital projects fund, the premium should be transferred to: A an agency fund B a special revenue fund C a debt service fund D an expendable trust fund 12 The City of Fargo issued general obligation bonds to finance construction of a new fire station The bonds were issued at a discount Which of the following is true? I The amount expended for the improvement must be decreased II The general fund must make up the difference to the face value of the bonds III A debt service fund must make up the difference to the face value of the bonds A I only B Either I or III C Either II or III D Either I or II 13 The costs of a building being constructed by a capital projects fund should be debited, or charged, to which of the following accounts in the capital projects fund? A Expenditures B Building C Construction in Progress D Other Financing Uses 18-4 To download more slides, ebook, solutions and test bank, visit http://downloadslide.blogspot.com Chapter 18 - Governmental Entities: Special Funds and Government-wide Financial Statements 14 When a capital projects fund transfers a premium from the issuance of general obligation bonds to another fund, the transfer should be accounted for as which type of interfund transaction or transfer? A As a loan B As an interfund transfer C As revenue D As a reimbursement 15 A debt service fund for the City of Madison received $50,000 from a capital projects fund The amount received represented the premium received from the issuance of general obligation bonds What account should the debt service fund credit to record this receipt? A Revenue-General Obligation Bond Premium B Matured Bonds Payable C Other Financing Sources—Transfer In from Capital Projects Fund D Due to Capital Projects Fund 16 Upon completion of construction, and full payment of all construction costs in a capital projects fund, the entry to record the transfer of any remaining cash should include a debit to: I Contract Payable-Retained Percentage II Transfer Out to Debt Service Fund A I only B II only C Either I or II D Neither I nor II 18-5 To download more slides, ebook, solutions and test bank, visit http://downloadslide.blogspot.com Chapter 18 - Governmental Entities: Special Funds and Government-wide Financial Statements 17 On July 1, 2008, Cleveland established a capital projects fund to construct a new town hall Financing for construction came from the following sources: Construction of the town hall was completed on June 15, 2009 For the fiscal year ended June 30, 2009, what amount should Cleveland's capital projects fund report for revenues on its statement of revenues, expenditures, and changes in fund balance? A $1,000,000 B $1,500,000 C $3,500,000 D $14,500,000 18 On the statement of revenues, expenditures, and changes in fund balance for a capital projects fund, proceeds of general obligation bonds should be reported: A in the revenue section of the statement B as a direct addition to the beginning balance of unreserved fund balance C in the other financing sources (uses) section of the statement D as a subtraction from construction expenditures 19 The capital projects fund of Hood River completed construction of an addition to its city hall at a cost of $4,000,000 The city council approved payment of the amount due the general contractor, less a 10 percent retainage How should the capital projects fund account for the 10 percent retainage? I As a credit of $400,000 to Deferred Revenue-Retained Percentage II As a credit for $400,000 to Contracts Payable-Retained Percentage A I only B II only C Either I or II D Neither I nor II 18-6 To download more slides, ebook, solutions and test bank, visit http://downloadslide.blogspot.com Chapter 18 - Governmental Entities: Special Funds and Government-wide Financial Statements 20 The capital projects fund of Hysham completed construction of a new building The building should be reported in the: I government-wide statement of net assets II capital projects fund A I only B II only C Either I or II D Neither I nor II 21 During the fiscal year ended June 30, 2009, the city of Moorhead constructed a new courthouse which was budgeted to cost $5,000,000 Moorhead used a capital projects fund to account for the construction activities In July of 2008, a bid was accepted from Diamond Construction to build the courthouse for $4,800,000 On June 15, 2009, Diamond completed construction and submitted a bill to the city for $4,900,000 The city accepted the bill and paid Diamond all of the amount owed, except for a 10 percentage retainage On the statement of revenues, expenditures, and changes in fund balance prepared for the capital projects fund for the year ended June 30, 2009, expenditures should be reported at A $4,900,000 B $4,800,000 C $4,410,000 D $4,320,000 22 For which of the following long-term debt obligations would payments not be accounted for in a debt service fund? A Notes and warrants secured by specific tax revenues B Special assessment bonds sold to acquire enterprise fund assets C Notes and warrants D Special assessment bonds may be used to finance capital projects 18-7 To download more slides, ebook, solutions and test bank, visit http://downloadslide.blogspot.com Chapter 18 - Governmental Entities: Special Funds and Government-wide Financial Statements 23 A debt service fund of Clifton received $100,000 from its general fund during the fiscal year ended June 30, 2009 The cash was used to pay matured interest on Clifton's general obligation bonds, which were issued to finance construction of a new municipal building On the statement of revenues, expenditures, and changes in fund balance prepared for the debt service fund for the year ended June 30, 2009, the amount received from the general fund should be reported as: A revenue B a reduction of expenditures C an other financing source D matured interest payments 24 What account is debited in a debt service fund when it records matured interest payable? I Interest Expense II Expenditures A I only B II only C Either I or II D Neither I nor II 25 On the statement of revenues, expenditures, and changes in fund balance prepared for a debt service fund, the cash paid to retire matured serial bonds is reported as: I expenditures II a direct deduction from unreserved fund balance A I only B II only C Either I or II D Neither I nor II 18-8 To download more slides, ebook, solutions and test bank, visit http://downloadslide.blogspot.com Chapter 18 - Governmental Entities: Special Funds and Government-wide Financial Statements 26 Arlington has a debt service fund which it uses to pay the principal and interest on its $2,000,000 of general long-term debt Interest at percent is due on October and April On October 1, 2008, and April 1, 2009, Arlington's debt service fund paid $50,000 of interest due on its bonds On the balance sheet prepared on June 30, 2009, for Arlington's debt service fund, interest payable should be reported at: A $0 B $16,667 C $25,000 D $50,000 27 Fixed assets and investments are reported in which of the following funds? A I, II, III B II, IV, V C I, II, V D II, III, IV 28 On October 15, 2008, an enterprise fund of Blacksburg purchased office supplies at a cost of $10,000 The inventory of office supplies on hand at the June 30, 2009, fiscal year end was $4,000 There was no beginning inventory Blacksburg should make entries that include: A debiting Supplies $10,000 at October 15, and debiting Expenses $4,000 on June 30 B debiting Expenditures $10,000 at October 15, and debiting Supplies $4,000 at June 30 C debiting Supplies $10,000 at October 15, and crediting Supplies $6,000 on June 30 D debiting Expenditures $10,000 at October 15, and crediting Expenses $4,000 at June 30 29 A citizen of York purchased a truck in 2003 for $50,000 On June 10, 2009, she donated the truck to York The fair value of the truck on the date of donation was $30,000 How should York report the truck in its government-wide Statement of Net Assets? A Machinery and equipment should be increased $50,000 B Machinery and equipment should be increased $30,000 C Machinery and equipment should be decreased $20,000 D No asset should be reported because no expenditures were made to acquire the truck 18-9 To download more slides, ebook, solutions and test bank, visit http://downloadslide.blogspot.com Chapter 18 - Governmental Entities: Special Funds and Government-wide Financial Statements 30 The general fund of Reston acquired computer equipment costing $70,000 during the fiscal year ended June 30, 2009 Machinery and Equipment should be reported in Reston's General Fund Balance Sheet and government-wide Statement of Net Assets at June 30, 2009, as follows: A Option A B Option B C Option C D Option D 31 Which of the following funds report fixed assets on their balance sheets? A I, II B II, III C I, IV D III, IV 32 The town of Decorah issued general obligation serial bonds at par to finance construction of several new streets in the town Construction activity was accounted for in a capital projects fund On the date the general obligation serial bonds were issued, what account was credited in Decorah's capital projects fund? A Serial Bonds Payable B Due to Debt Service Fund C Revenues D Other Financing Sources-Bond Issue Proceeds 18-10 To download more slides, ebook, solutions and test bank, visit http://downloadslide.blogspot.com Chapter 18 - Governmental Entities: Special Funds and Government-wide Financial Statements 61 Newport Village was recently incorporated and began financial operations on January 1, 2008, the beginning of its fiscal year The following transactions occurred during this first fiscal year, January 1, 2008, to December 31, 2008: The village council adopted a budget for general operations for the fiscal year ending December 31, 2008 Revenue was estimated at $650,000 Legal authorizations for budgeted expenditures totaled $620,000 Property taxes were levied in the amount of $630,000; percent of this amount was estimated to prove uncollectible These taxes are available as of the date of levy to finance current expenditures During the year, a village resident donated marketable securities valued at $75,000 to the village under the terms of a trust agreement which stipulates that the principal amount be kept intact The revenue generated by the securities is restricted to providing support to the village library Revenue earned and received on these amounted to $3,000 through December 31, 2008 A general fund transfer of $8,000 was made to establish an internal service fund to provide for a permanent investment in inventory The village decided to construct a small recreation facility through a special assessment project authorized to so at a cost of $100,000 The city is obligated if the property owners default on their special assessments Special assessment bonds were issued in the amount of $90,000, and the first year's special assessment of $22,500 was levied against the village's property owners The remaining $10,000 for the project will be contributed from the village's general fund The special assessments for the lighting project are due over a four-year period, and the first year's assessments of $22,500 were collected The $10,000 transfer from the village's general fund was received by the lighting capital projects fund A contract for $100,000 was let for the installation of the lighting The capital projects fund was encumbered for the contract On December, 2008, the contract was completed and the contractor was paid During the year, the internal service fund purchased various supplies at a cost of $3,000 Current property taxes collected during the year was $615,000 Licenses and permit fees collected amounted to $15,000 The allowance for estimated uncollectible taxes is adjusted to $15,000 Required: Prepare journal entries to record each of these transactions in the appropriate fund or funds of Newport Village for the fiscal year ended December 31, 2008 Use the following funds: general fund, capital projects fund, internal service fund, and private-purpose trust fund Closing entries are not required Organize your answer using the following format: Fund Journal Entry 18-50 To download more slides, ebook, solutions and test bank, visit http://downloadslide.blogspot.com Chapter 18 - Governmental Entities: Special Funds and Government-wide Financial Statements 18-51 To download more slides, ebook, solutions and test bank, visit http://downloadslide.blogspot.com Chapter 18 - Governmental Entities: Special Funds and Government-wide Financial Statements AACSB: Analytic AICPA: Measurement 18-52 To download more slides, ebook, solutions and test bank, visit http://downloadslide.blogspot.com Chapter 18 - Governmental Entities: Special Funds and Government-wide Financial Statements 62 The City of Edmond established a capital projects fund for the construction of a reading room for the City Library The estimated cost of the construction is $300,000 On January 1, 2008, an percent, $200,000 bond issue was sold at 102 At that date, the county board provided a $100,000 grant On March 3, 2008, the premium from issuance of the bonds was transferred to the debt service fund established to repay the bond principal and interest On March 1, 2008, a general contractor's bid was accepted to construct the facility at a cost of $270,000 The construction was completed on October 5, 2008; its actual cost was $285,000 The city council approved payment of the total actual cost of $285,000 In addition to the $285,000, $9,000 was spent to make the facility ready for use On November 3, 2008, the city council gave the final approval for both these payments After all bills were paid, the remaining fund balance was transferred to the debt service fund Required a Prepare entries for the capital projects fund for 2008 b Prepare a statement of revenues, expenditures, and changes in fund balance for 2008 for the capital projects fund 18-53 To download more slides, ebook, solutions and test bank, visit http://downloadslide.blogspot.com Chapter 18 - Governmental Entities: Special Funds and Government-wide Financial Statements a) 18-54 To download more slides, ebook, solutions and test bank, visit http://downloadslide.blogspot.com Chapter 18 - Governmental Entities: Special Funds and Government-wide Financial Statements b) 18-55 To download more slides, ebook, solutions and test bank, visit http://downloadslide.blogspot.com Chapter 18 - Governmental Entities: Special Funds and Government-wide Financial Statements AACSB: Analytic AICPA: Measurement 18-56 To download more slides, ebook, solutions and test bank, visit http://downloadslide.blogspot.com Chapter 18 - Governmental Entities: Special Funds and Government-wide Financial Statements 63 Akron established an internal service fund for its data processing activities on July 1, 2008 During the fiscal year ended June 30, 2009, the following transactions and events occurred: 1) On July 1, 2008, the city council authorized the general fund to contribute $1,000,000 to help establish the internal service fund on July 20, 2008 2) The internal service fund spent $900,000 of the contribution to acquire a mainframe computer on July 25, 2008 3) During the year ended June 30, 2009, the internal service billed other funds of the city $300,000 for use of the computer By year end, all of the billings were collected except for $30,000 4) The internal service fund incurred general operating expenses of $100,000, exclusive of depreciation, during the year ended June 30, 2009 All of the expenses were paid by June 30, 2009, except for $24,000 5) Depreciation expense related to the computer was $180,000 Required: A) Prepare all journal entries that would be recorded by Akron's internal service fund for the year ended June 30, 2009 Explanations for journal entries are not necessary B) Prepare a statement of revenues, expenses, and changes in fund net assets for the internal service fund for the year ended June 30, 2009 C) Calculate the amount of unrestricted net assets at June 30, 2009 18-57 To download more slides, ebook, solutions and test bank, visit http://downloadslide.blogspot.com Chapter 18 - Governmental Entities: Special Funds and Government-wide Financial Statements A) Journal entries for the year ended June 30, 2009: B) 18-58 To download more slides, ebook, solutions and test bank, visit http://downloadslide.blogspot.com Chapter 18 - Governmental Entities: Special Funds and Government-wide Financial Statements C) AACSB: Analytic AICPA: Measurement 18-59 To download more slides, ebook, solutions and test bank, visit http://downloadslide.blogspot.com Chapter 18 - Governmental Entities: Special Funds and Government-wide Financial Statements 64 Required: For each transaction described below for the current fiscal year of the Town of Golden, use an "x" to indicate the fund(s) in which a journal entry should appear, and whether separate information should be kept for General Long Term Debt or General Fixed Assets 18-60 To download more slides, ebook, solutions and test bank, visit http://downloadslide.blogspot.com Chapter 18 - Governmental Entities: Special Funds and Government-wide Financial Statements AACSB: Reflective Thinking AICPA: Decision Making 18-61 To download more slides, ebook, solutions and test bank, visit http://downloadslide.blogspot.com Chapter 18 - Governmental Entities: Special Funds and Government-wide Financial Statements 65 Prior to closing the accounts at the end of the most recent fiscal year, the Town of Sonora reports the following amounts (in thousands): Required: Applying the criteria specified in GASB 34, determine which of the above funds should be classified as major funds for reporting purposes 18-62 To download more slides, ebook, solutions and test bank, visit http://downloadslide.blogspot.com Chapter 18 - Governmental Entities: Special Funds and Government-wide Financial Statements The major funds for reporting purposes are the General Fund, the Capital Projects Fund, the Internal Service Fund, and the Enterprise Fund—Hydro, determined as follows: 1) GASB 34 states that the General Fund is always a major fund 2) The following criteria apply to other governmental (includes Internal Service Fund) or enterprise funds: a Total assets, liabilities, revenues, or expenditures/expenses of the individual governmental or enterprise fund are at least 10 percent of the governmental or enterprise category; in this case, the totals are: b Total assets, liabilities, revenues, or expenditures/expenses of the individual governmental or enterprise fund are at least percent of the total for all governmental and enterprise funds combined; in this case, the total is: Application of the 10 percent and percent tests (must meet both of the percentage tests for at least one of the four financial statement items): * for example, assets of $100 < $115 ** for example, assets of $100 < $150 *** both tests are met for expenditures AACSB: Analytic AICPA: Reporting 18-63 To download more slides, ebook, solutions and test bank, visit http://downloadslide.blogspot.com Chapter 18 - Governmental Entities: Special Funds and Government-wide Financial Statements 66 GASB 34 requires a Reconciliation schedule for the Statement of Net Assets What does this schedule document? This schedule describes the adjustments necessary to move from the modified accrual method used in the governmental funds to the accrual basis that is used in the government-wide statements AACSB: Communication AICPA: Reporting 18-64 ... ebook, solutions and test bank, visit http://downloadslide.blogspot.com Chapter 18 - Governmental Entities: Special Funds and Government-wide Financial Statements 49 Government-wide financial statements... ebook, solutions and test bank, visit http://downloadslide.blogspot.com Chapter 18 - Governmental Entities: Special Funds and Government-wide Financial Statements 51 Required financial statements... download more slides, ebook, solutions and test bank, visit http://downloadslide.blogspot.com Chapter 18 - Governmental Entities: Special Funds and Government-wide Financial Statements 10 Ponca City