Homework answers / question archive / Chapter 9 – Homework    The members of the Museum Board of the City of Springfield are appointed by the City of Springfield city Council, which has agreed to finance any operating deficits of the museum

Chapter 9 – Homework    The members of the Museum Board of the City of Springfield are appointed by the City of Springfield city Council, which has agreed to finance any operating deficits of the museum

Accounting

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Chapter 9 – Homework

 

1.  The members of the Museum Board of the City of Springfield are appointed by the City of Springfield city Council, which has agreed to finance any operating deficits of the museum.  Under these conditions:

 

1. The museum is a primary government
2. The city and the museum together are a financial reporting entity
3. The museum is a special district
4. The museum is a component unit of the city

 

 

2. Governmental interim financial reports:

 

1. Are not necessary because administrators and managers of the government are already familiar with the events & activities of the government on a day to day basis
2. Should be prepared and distributed publicly at regular intervals
3. Are important for budgetary and cash management purposes
4. Are not necessary as long as the government prepares a comprehensive annual financial report (CAFR).

 

3. The comprehensive annual financial report (CAFR) of a governmental reporting entity should contain a statement of cash flows for:

 

Governmental             Proprietary

Funds                          Funds

1.             Yes      _____              No       _____
2.             Yes      _____              Yes      _____
3.             No       _____              Yes      _____
4.             No       _____              No       _____

 

4. Which of the following terms would be used when describing primary government?

 

1. Fiscally independent
2. Legally separate organization
3. Separately elected governing body
4. All of the above

 

5. The city council of Lake Jefferson passed a resolution to establish a small botanical garden in the city park.  The council decided to put aside funds in the amount of $22,000 to build and establish the botanical garden.  At the end of the fiscal year, $3,000 of the funds had been spent.  How should the remainder of the funds be reported?

 

1. Committed fund balance
2. Assigned fund balance
3. Restricted fund balance
4. Nonspendable fund balance

 

 

6. Which of the following require a statement of changes in net position?

 

1. Fiduciary Funds
2. Government-wide financial statements
3. All governmental funds
4. Both proprietary funds and fiduciary funds

 

 

7. What are intra-entity transactions?

 

1. Nonexchange transactions between a primary government and its components units
2. Exchange or nonexchange transactions between a primary government and its components units
3. Exchange or nonexhcnage transactions between a primary government and any discretely presented component unit
4. Exchange transactions between a primary government and any blended component unit.

8. Which of the following would not be included as a reconciling item in reconciling the governmental fund statement of revenues, expenditures, and changes in fund balance to the government-wide statement of activities?

 

1. Bond issuances reported as an another financing source in a governmental fund
2. Interest accrued on long-term notes payable
3. Acquisition of capital assets is reported as an expenditure in the governmental fund financial statements
4. Interest accrued on Property taxes receivable delinquent

9. A positive unassigned fund balance can be found in which of the following funds?

 

1. Special revenue fund
2. Debt service fund
3. General fund
4. All of the above

 

 

10. Which of the following is generally considered an-other comprehensive basis of accounting (OCBOA) acceptable for governments?

 

1. Cash
2. Budgetary
3. Accrual
4. Reserve Cash

 

11. The city of Lynnwood was recently incorporated and had the following transactions for the fiscal year ended December 31, 2017.

1. The City council adopted a General Fund budget for the fiscal year.  Revenues were estimated at $2,000,000 and appropriations were $1,990,000.
2. Property taxes in the amount of $1,940,000 were levied.  It is estimated that $9,000 of the taxes levied will be uncollectible.
3. A General Fund transfer of $25,000 in cash and $300,000 in equipment (with accumulated depreciation of $65,000) was made to establish a central duplicating internal service fund.
4. A citizen of Lynnwood donated marketable securities with a fair value of $800,000. The donated resources are to be maintained in perpetuity with the city using the revenue generated by the donation to finance an after school program for children, which is sponsored by the culture and recreation function. Revenue earned and received as of December 31, 2017, was $40,000.
5. The city’s utility fund billed the city’s General Fund $125,000 for water and sewage services. As of December 31, the General Fund had paid $124,000 of the amount billed.
6. The central duplicating fund purchased $4,500 in supplies.
7. Cash collections recorded by the general government function during the year were as follows:

 

Property taxes             $1,925,000

Licenses & permits      35,000

User charges                28,000

 

8. During the year the internal service fund billed the city’s general government function $15,700 for duplicating services and it billed the city’s utility fund $8,100 for services.
9. The city council decided to build a city hall at an estimated cost of $5,000,000. To finance the construction, 6 percent bonds were sold at the face value of $5,000,000. A contract for $4,500,000 has been signed for the project; however no expenditures have been incurred as of December 31, 2017.
10. The general government function issued a purchase order for $32,000 for computer equipment. When the equipment was received, a voucher for $31,900 was approved for payment and payment was made.

 

1. For each transaction under identify all of the fund and/or government-wide activity journals in which journal entries must be made.

 

General Fund                                                              GF

Capital projects fund                                                  CPF

Internal service fund                                                   ISF

Permanent fund                                                          PF

After school Fund (a special revenue fund)               SRF

Enterprise fund                                                           EF

Governmental activities                                              GA

 

Transaction                                                    Fund/Activity

1.                                           ___GF  ___CPF  ___ISF     ___PF     ___SRF  ___EF   ___GA
2.                                           ___GF  ___CPF  ___ISF     ___PF     ___SRF  ___EF   ___GA
3.                                           ___GF  ___CPF  ___ISF     ___PF     ___SRF  ___EF   ___GA
4.                                           ___GF  ___CPF  ___ISF     ___PF     ___SRF  ___EF   ___GA
5.                                           ___GF  ___CPF  ___ISF     ___PF     ___SRF  ___EF   ___GA
6.                                           ___GF  ___CPF  ___ISF     ___PF     ___SRF  ___EF   ___GA
7.                                           ___GF  ___CPF  ___ISF     ___PF     ___SRF  ___EF   ___GA
8.                                           ___GF  ___CPF  ___ISF     ___PF     ___SRF  ___EF   ___GA
9.                                           ___GF  ___CPF  ___ISF     ___PF     ___SRF  ___EF   ___GA
10.                                           ___GF  ___CPF  ___ISF     ___PF     ___SRF  ___EF   ___GA

 

12. Using the funds you identified in part a, prepare journal entries to property record each transaction for the fiscal year ended December 31, 2017. (if no entry is required for a transaction/event, select No Journal entry required” in the first account field.)

 

1. The city council adopted a General fund budget for the fiscal year.  Revenues were estimated at $2,000,000 and appropriations were $1,990,000.

 

 

2. Property taxes in the amount of $1,940,000 were levied.  It is estimated that $9,000 of the taxes levied will be uncollectible

 

 

3. A General Fund transfer of $25,000 in cash and $300,000 in equipment (with accumulated depreciation of $65,000) was made to establish a central duplicating internal service fund

 

 

4. A citizen of Lynnwood donated marketable securities with a fair value of $800,000.  The donated resources are to be maintained in perpetuity with the city using the revenue generated by the donation to finance an after school program for children, which is sponsored by the culture and recreation function.  Revenue earned and received as of December 31, 2017, was $40,000.

 

5. The city’s utility fund billed the city’s general fund $125,000 for water and sewage services.  As of December 31, the General fund had paid $124,000 of the amount billed.

 

6. The central duplicating fund purchased $4,500 in supplies

 

7. Cash collections recorded by the General Fund during the year were as follows: property taxes, $1,925,000; licenses and permits, $35,000; user charges, $28,000.

 

8. During the year the internal service fund billed the city’s general government function $15,700 for duplicating services and it billed the city’s utility fund $8,100 for services.

 

9. The city council decided to build a city hall at an estimated cost of $5,000,000.  To finance the construction, 6% bonds were sold for the face value of $5,000,000.  A contract for $4,500,000 has been signed for the project, however, no expenditures have been incurred as of December 31, 2017.

 

10. The general government function issued a purchase order for $32,000 for computer equipment.  When the equipment was received, a voucher for $31,900 was approved for payment and payment was made.

 

 

13. The following information has been provided for the City of Elizabeth for its fiscal year ended June 30, 2017.  The information provided relates to financial information reported on the city’s statement of net position and its total governmental funds balance

 

Revenues accrued by unavailable to pay the current period expenditures     $361,200

                        Capital assets                                                                                                  639,900

                        Accumulated depreciation on capital assets                                                   353,400

                        Accrued interest on bonds and long-term notes payable                                1,200

                        Bonds and long-term notes payable                                                               174,200

                        Unamortized premium on bonds payable                                                       700

                        Compensated absences                                                                                   13,300

                        Total governmental fund balances                                                                  157,700

                        Total net position of governmental activities                                                  616,000

 

Prepare reconciliation of the governmental fund balances to the net position of governmental activities

 

 

14. Section A provides a list of transactions or events that occurred during the year, followed by Section B, a list of the possible effects each transaction or event has on adjusting net position accounts at yearend, assuming that all temporary accounts have already been closed to the account Net Position – Unrestricted

 

Section B

1. Restricted Net position is increased and unrestricted net position is decreased
2. Restricted Net position is decreased and Unrestricted Net Position is increased
3. Net investments in capital assets is increased and unrestricted net position is decreased
4. Net investment in capital assets is decreased and unrestricted net position in increased
5. None of the above

 

Required

Identify how the net position categories would need to be adjusted for each of the transactions.

 

                                                     Section A                                                                                          Section B

1. Depreciation was recorded for the year                                                                                       
2. A fully depreciated computer was sold for $50                                                                          
3. Bonds issued to construct the new library were retired                                                              
4. Construction expenditures were incurred for the new fire substation                                         
5. Grant funds that can only be used for a summer kids’ camp remain unexpected at                   

year-end                                                                                                                                       

6. An operating lease was entered into during the year                                                                   
7. A $3 million endowment was received during the year                                                              
8. Several new fire trucks were purchased and 70% financed with long-term notes                      
9. The capital projects funds transferred its residual fund balance to the debt service                   

fund during the year

10. A grant received in the prior year for afterschool recreational activities was                              

expended

 

15. Following is the information concerning operating activity for Annette County. For the year ended June 30, 2017, the net change in total governmental fund balances was $(289,200), and the change in net position of governmental activities was $(376,600). During the year, Annette issued $2,000,000 in general obligation bonds at a premium of 101. The bonds are to be used for a construction project. The county acquired $2,750,000 in capital assets and sold capital assets with a book value of $563,000 for $570,900. At the beginning of the period accrued liabilities were $470,000 and at the end of the period they totaled $494,000. Depreciation on capital assets totaled $595,000. Revenue accrued for the period but not available for use totaled $364,600.

 

Required

Prepare a reconciliation of the change in governmental fund balance to the change in net position of governmental activities