Accounting For Governmental & Nonprofit Entities
18th Edition
ISBN: 9781259917059
Author: RECK, Jacqueline L., Lowensohn, Suzanne L., NEELY, Daniel G.
Publisher: Mcgraw-hill Education,
expand_more
expand_more
format_list_bulleted
Question
Chapter 14, Problem 19EP
a)
To determine
State the list of modifications and corrections that should be made to the statement to ensure it is represented in conformance with GAAP.
b)
To determine
Explain the concern for the ECE regarding its audit based on the financial statements it has prepared.
Expert Solution & Answer
Want to see the full answer?
Check out a sample textbook solution
Students have asked these similar questions
On December 1, 2017, a state government awards a city government a grant of $1 million to be used specifically to provide hot lunches for all schoolchildren. No money is received until June 1, 2018. For each of the following, indicate whether the statement is true or false and, if false, explain why.a. Because the government received no money until June 1, 2018, no amount of revenue can be recognized in 2017 on the government-wide financial statements.b. If this grant has no eligibility requirements and the money is properly spent in September 2018 for the hot lunches, the revenue should be recognized during that September.c. Because this money came from the state government and because that government specified its use, this is a government-mandated nonexchange transaction.d. If the government had received the money on December 1, 2017, but eligibility reimbursement requirements had not been met yet, unearned revenue of $1 million would have been recognized on the government-wide…
To improve its recreation facilities and to reduce its unemployment rate, Empire State created theTiconderoga Trails Special Revenue Fund. By law, all traffic fines collected by the state policewere directed to be deposited into the Ticonderoga Trails Special Revenue Fund, and used only to payfor the supplies and salaries of individuals employed to create new hiking trails in TiconderogaState Park. There was no balance in the fund at the beginning of 2021. The Fund had the followingtransactions and events during the calendar year.1. The legislature adopted and the governor approved a budget. Estimated traffic fine revenueswere $1,500,000. Appropriations were for parks and recreation program salaries of $1,300,000and for parks and recreation program supplies of $180,000.2. Received traffic fine revenues of $1,520,000 during the year.3. Paid salaries of $1,250,000 during the year.4. Incurred a liability of $30,000 for salaries earned by employees during the last work week inDecember that…
Katherine Irving, controller of Lotan Corp., is aware of a pronouncement on accounting changes. After reading the pronouncement, she is confused about what action should be taken on the following items related to Lotan Corp. for the year 2020.
1. In 2020, Lotan decided to change its policy on accounting for certain marketing costs. Previously, the company had chosen to defer and amortize all marketing costs over at least 5 years because Lotan believed that a return on these expenditures did not occur immediately. Recently, however, the time differential has considerably shortened, and Lotan is now expensing the marketing costs as incurred.
2. In 2020, the company examined its entire policy relating to the depreciation of plant equipment. Plant equipment had normally been depreciated over a 15-year period, but recent experience has indicated that the company was incorrect in its estimates and that the assets should be depreciated over a 20-year period.
3. One division of Lotan Corp.,…
Chapter 14 Solutions
Accounting For Governmental & Nonprofit Entities
Ch. 14 - Prob. 1QCh. 14 - Prob. 2QCh. 14 - Prob. 3QCh. 14 - What is the value of reporting expenses by...Ch. 14 - Prob. 5QCh. 14 - Prob. 6QCh. 14 - What criteria must be met before an NFP...Ch. 14 - Prob. 8QCh. 14 - What are joint costs, and how are joint costs...Ch. 14 - Prob. 10Q
Ch. 14 - Prob. 11CCh. 14 - Prob. 13CCh. 14 - Prob. 14.1EPCh. 14 - According to GAAP, all not-for-profit...Ch. 14 - Prob. 14.3EPCh. 14 - In a local NFP elementary schools statement of...Ch. 14 - Prob. 14.5EPCh. 14 - Prob. 14.6EPCh. 14 - The Maryville Cultural Center recently conducted a...Ch. 14 - Prob. 14.8EPCh. 14 - Prob. 14.9EPCh. 14 - Prob. 14.10EPCh. 14 - Prob. 14.11EPCh. 14 - Prob. 14.12EPCh. 14 - Prob. 14.13EPCh. 14 - Prob. 15EPCh. 14 - Donated Services. (LO14-3) Indicate whether each...Ch. 14 - Prob. 17EPCh. 14 - Prob. 18EPCh. 14 - Prob. 19EPCh. 14 - Statement of Activities. (LO14-3) The Atkins...Ch. 14 - Prob. 21EPCh. 14 - Prob. 22EPCh. 14 - Prob. 23EPCh. 14 - Prob. 24EPCh. 14 - Prob. 25EP
Knowledge Booster
Similar questions
- Exchange Corp. is a company that acts as a facilitator in tax-favored real estate swaps. Such swaps, knownas 1031 exchanges, permit participants to avoid some or all of the capital gains taxes that would otherwisebe due. The bookkeeper for the company has been asked to prepare a report for the company to help itsowner/manager analyze performance. The first such report appears below:Exchange Corp.Analysis of Revenues and CostsFor the Month Ended May 31Planning Budget ActualUnit Revenues Unit Revenuesand Costs and Costs VariancesExchanges completed ............ 40 50Revenue .................................. $395 $385 $10 UExpenses:Legal and search fees .......... 165 184 19 UOffice expenses ................... 135 112 23 FEquipment depreciation ....... 10 8 2 FRent ..................................... 45 36 9 FInsurance ............................. 5 4 1 FTotal expense .......................... 360 344 16 FNet operating income .............. $ 35 $ 41 $ 6 FNote that the revenues and…arrow_forwardThe county of Edgerton is facing a General Fund deficit in 2018 because actual tax collections are lagging behind estimates. At a staff meeting, the village manager tells the chief of public works that the chief will need to terminate one employee in April to help keep the budget in balance. The chief of public works says: “I have a better idea. You know that state grant the finance commissioner put into a Special Revenue Fund because it could be used only for planting trees along the highways? Why don’t I just tell one of my boys to fill out his timesheets so that the time he spends changing street light bulbs is charged against the Special Revenue Fund? Neither our finance commissioner nor the state will ever know the difference.” How should the village manager respond?arrow_forwardThe Ministry of Education is providing a capital grant to a school division in September 2020 of $30 million to build a new school. This school will not be in use until year September 2022. Please describe the impact on the School Division’s Statement of Operations and Accumulated Surplus in 2020-21, their Revenues, Expenses, and Overall Operating Deficit or Surplus.arrow_forward
- In April 2012, Senators Tom Harkin and Kay Hagan introduced a Senate bill to prohibit colleges from using federal education dollars for advertising or marketing. In March 2013 they reintroduced the bill. The Senate committee on Health, Education, Labor and Pensions reported that▪ Fifteen of the largest for-profit education companies received 86% of their revenues from federal student aid programs—such as the G.I. Bill and Pell grants. ▪ In Fiscal Year 2009, these for-profit education companies spent $3.7 billion dollars, or 23% of their budgets, on advertising, marketing and recruitment, which was often very aggressive and deceptive.(a) What were the total revenues of those fifteen for-profit colleges in fiscal year 2009?(b) How much did those colleges receive in Federal student aid in fiscal year 2009?(c) How much of the money they spent on advertising, marketing and recruitment could be considered as coming from the Federal government?arrow_forwardYou are the Director of Athletics at Maryland Eastern University(MEU) in Chevy Chase, Maryland. As a large Division I institution, MEU is experiencing a deficit of $500,000 for the 2019-2020 academic year. President Sharon Teal asks you to present a 1-2 paragraph proposal our revenue sources that should be utilized to erase the deficit. In your proposal, your description should be supported with examples of successes used by other sport organizations.arrow_forwardLeaf Private College is sponsored by a religious group. Volunteers from this religious group regularly contribute their skilled services to Leaf and are paid nominal amounts to cover their commuting costs. If Leaf did not receive these volunteer services, it would have to purchase similar services. During 2019, the total amount paid to these volunteers was $10,000. The gross value of services performed by them, as determined by reference to layequivalent salaries, amounted to $400,000. What amount should Leaf record as expenses in 2019 for these volunteers’ services?a. $410,000b. $400,000c. $10,000d. $0arrow_forward
- You are the new controller for Engineered Solutions. The company treasurer, Randy Patey, believes that as aresult of pending legislation, the current 40% income tax rate will be decreased for 2019 to 35% and is uncertainwhich tax rate to apply in determining deferred taxes for 2018. Patey also is uncertain which differences shouldbe included in that determination and has solicited your help. Your accounting group provided you the followinginformation.Two items are relevant to the decisions. One is the $50,000 insurance premium the company pays annuallyfor the CEO’s life insurance policy, for which the company is the beneficiary. The second is that EngineeredSolutions purchased a building on January 1, 2017, for $6,000,000. The building’s estimated useful life is 30years from the date of purchase, with no salvage value. Depreciation is computed using the straight-line methodfor financial reporting purposes and the MACRS method for tax purposes. As a result, the building’s tax basis…arrow_forwardAssume that Congress is considering a new bill called the Paid Parental and Medical Leave (PPML) Act. This statute would create the PPML program, which would provide a financial benefit to employees for parental/medical leave and would be financed by a payroll tax paid by both employers and employees. The program would be administered by the Social Security Administration, leveraging the infrastructure already in place for supporting the Social Security Disability Insurance (SSDI) program. The co-sponsors of the bill claim it is revenue-neutral over 5 years. In other words, they claim that over five years, the revenues from payroll tax rate would offset the costs of the payouts plus administrative costs. All claims would be paid out of a newly established federal Paid Parental and Medical Leave Trust Fund. As a congressional staffer, the Representative you work for has asked you to test whether this program actually pays for itself over 5 years. You make some phone calls and obtain the…arrow_forwardWhen the IASB issues new standards, the implementation date is usually twelve months from the date of issuance, with early implementation encouraged. Becky Hoger, controller, discusses with her financial vice president the need for early implementation of a standard that would result in fair presentation of the company’s financial condition and earnings. When the financial vice president determines that early implementation of the standard will adversely affect the reported net income for the year, he discourages Hoger from implementing the standard until it is required. What, if any, is the ethical issue involved in this case? Is the financial vice president acting improperly or immorally? What does Hoger have to gain by advocacy of early implementation? Who might be affected by the decision against early implementationarrow_forward
- 1. State Community College, a public college, grants faculty members a one-year sabbatical leave after each seven years of service. There are no requirements for research, study or service during the compensated sabbatical leave. A particular faculty member earns $40,000 per year. Assuming that the college maintains its books and records in a manner that facilitates the preparation of the government-wide financial statements and assuming that any appropriate accruals have been made, what is the appropriate entry to record the employee s salary paid while on sabbatical? a. Debit Expenditures $40,000; Credit Cash $40,000. b. Debit Sabbatical Leave Payable $40,000; Credit Cash $40,000. c. Debit Expenditures $40,000; Credit Cash $40,000. d. No entry required. 2. State Community College, a public college, grants faculty members a one-year sabbatical leave after each seven years of service. There are no requirements for research, study or service during the compensated sabbatical leave. A…arrow_forwardWhen the IASB issues new standards, the implementation date is usually twelve months from the date of issuance, with early implementation encouraged. Becky Hoger, a controller, discusses with her financial vice president the need for early implementation of a standard that would result in a fair presentation of the company’s financial condition and earnings. When the financial vice president determines that early implementation of the standard will adversely affect the reported net income for the year, he discourages Hoger from implementing the standard until it is required. Required: a) What, if any, is the ethical issue involved in this case? b) Is the financial vice president acting improperly or immorally?: c) What does Hoger have to gain by advocacy of early implementation and who might be affected by the decision against early implementation?arrow_forwardAn organization of high school seniors performs services for patients at Leer Hospital. These students are volunteers and perform services that the hospital would not otherwise provide, such as wheeling patients in the park and reading to patients. These volunteers donated 5,000 hours of service to Leer in 2017. At the minimum wage rate, these services would amount to $22,500, while it is estimated that the fair value of these services was $27,000. In Leer’s 2017 statement of revenues and expenses, what amount should be reported as nonoperating revenues?a. $27,000b. $22,500c. $6,250d. $0arrow_forward
arrow_back_ios
SEE MORE QUESTIONS
arrow_forward_ios
Recommended textbooks for you
Individual Income TaxesAccountingISBN:9780357109731Author:HoffmanPublisher:CENGAGE LEARNING - CONSIGNMENT
Individual Income Taxes
Accounting
ISBN:9780357109731
Author:Hoffman
Publisher:CENGAGE LEARNING - CONSIGNMENT