The City of Roswell has a 6/30 fiscal year-end. The City uses the consumption method for recognizing inventories and prepayments. On July 1, 2006, the City leased computer equipment for use in the City s general activities. The lease is a three-year lease that qualifies as an operating lease. The City prepaid the entire three-year rental fee of $45,000. At June 30, 2007, the appropriate account balances in the General Fund associated with this transaction would be Prepaid Lease $0; Expenditures $45,000; Fund Balance Reserved for Prepaid Lease $0. Prepaid Lease $30,000; Expenditures $15,000; Fund Balance Reserved for Prepaid Lease $30,000. Prepaid Lease $30,000; Expenditures $45,000; Fund Balance Reserved for Prepaid Lease $30,000. Prepaid Lease $30,000; Expenditures $15,000; Fund Balance Reserved for Prepaid Lease $0.

The City of Roswell has a 6/30 fiscal year-end. The City uses the consumption method for recognizing inventories and prepayments. On July 1, 2006, the City leased computer equipment for use in the City s general activities. The lease is a three-year lease that qualifies as an operating lease. The City prepaid the entire three-year rental fee of $45,000. At June 30, 2007, the appropriate account balances in the General Fund associated with this transaction would be Prepaid Lease $0; Expenditures $45,000; Fund Balance Reserved for Prepaid Lease $0. Prepaid Lease $30,000; Expenditures $15,000; Fund Balance Reserved for Prepaid Lease $30,000. Prepaid Lease $30,000; Expenditures $45,000; Fund Balance Reserved for Prepaid Lease $30,000. Prepaid Lease $30,000; Expenditures $15,000; Fund Balance Reserved for Prepaid Lease $0.

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Description: The City of Roswell has a 6/30 fiscal year-end. The City uses the consumption method for recognizing inventories and prepayments. On July 1, 2006, the City leased computer equipment for use in the City s general activities. The lease is a three-year

CONCEPTS IN FED.TAX.,2020-W/ACCESS

20th Edition

ISBN:9780357110362

Author:Murphy

Publisher:Murphy

Chapter6: Business Expenses

Section: Chapter Questions

Problem 78IIP

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