Accounting For Governmental & Nonprofit Entities
18th Edition
ISBN: 9781259917059
Author: RECK, Jacqueline L., Lowensohn, Suzanne L., NEELY, Daniel G.
Publisher: Mcgraw-hill Education,
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Chapter 15, Problem 15.9EP
To determine
Identify the statement that describes spending rate of endowment.
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In a governmental fund, which of the following is considered an expenditure? a. The purchase of a capital asset b. The consumption of supplies c. Salaries earned by employees d. All of the above
The general fund pays rent for two months. Which of the following is not correct? Choose the correct.a. Rent expense should be reported in the government-wide financial statements.b. Rent expense should be reported in the general fund.c. An expenditure should be reported in the fund financial statements.d. If one month of rent is in the first year with the other month in the next year, either the purchases method or the consumption method can be used in fund statements.
A single contribution may affect all three types of funds.
The following events and transactions relate to a single contribution.
1. A high-tech firm pledged to contribute $1 million in the company's common stock to a university's business school if the school would establish a new program in the management of information technology. The securities were to be placed in an endowment fund and the annual dividend earnings were to be used to purchase computer hardware and software.
2. The business school established the program and thereby satisfied the conditions to receive the contribution.
3. The business school received the stock and placed it in an endowment fund.
4. In the first year after receiving the stock, the business school earned $30,000 in cash dividends. They were credited to an appropriate fund.
5. The business school purchased $20,000 of computer equipment.
6. The computer equipment was estimated to have a useful life of four years (no salvage). The school charged one…
Chapter 15 Solutions
Accounting For Governmental & Nonprofit Entities
Ch. 15 - Prob. 1QCh. 15 - Prob. 2QCh. 15 - Prob. 3QCh. 15 - Prob. 4QCh. 15 - Prob. 5QCh. 15 - Prob. 6QCh. 15 - Prob. 7QCh. 15 - What is UPMIFA, and why is it important to...Ch. 15 - How can the performance of colleges and...Ch. 15 - Prob. 10Q
Ch. 15 - Prob. 12CCh. 15 - Prob. 14CCh. 15 - Prob. 15.1EPCh. 15 - Prob. 15.2EPCh. 15 - Prob. 15.3EPCh. 15 - Prob. 15.4EPCh. 15 - Prob. 15.5EPCh. 15 - Prob. 15.6EPCh. 15 - Prob. 15.7EPCh. 15 - Prob. 15.8EPCh. 15 - Prob. 15.9EPCh. 15 - Prob. 15.10EPCh. 15 - Prob. 16EPCh. 15 - Prob. 17EPCh. 15 - Prob. 18EPCh. 15 - Prob. 19EPCh. 15 - Prob. 20EPCh. 15 - Prob. 21EPCh. 15 - Prob. 22EPCh. 15 - Prob. 23EP
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- For the following situations determine the fund or nonfund account best suited to account for it. A fund or nonfund account may be used more than once SITUATIONS: GOB grant proceeds received for construction of a new elementary school building – Capital Projects Fund Municipal electric utility bonds to be repaid from customer charges – Debt Service Fund General obligation bonds issued to finance construction of a new elementary school building – Investment Trust Funds Activities of a central print shop that provides custom printing services to all campus departments – Enterprise Funds Financial resources set aside to service the principal and interest on general obligation debt A special hotel occupancy sales tax that can only be used for city economic development promotional activities Financial resources legally restricted to the extent that only earnings, and not the principal, may be used to benefit the government or its citizenry – Special Revenue Fund…arrow_forwardFor each of the following accounts indicate in which fund type it could be found. Select your answer from the following responses: A. Governmental funds only. B. Proprietary funds only. Bond Proceeds Long Term liability for Compensated Absences Deferred Inflows/Outflows of Resources Taxes Receivable Estimated Revenues Operating Revenuesarrow_forwardBelow is the list of transactions relating to the Consolidated Fund for the year ended 31st December, 2019. GHC’000 Direct taxes 1,200,000 Indirect taxes 1,300,000 Compensation for employees 2,200,000 Goods and services 750,000 Grants to local authorities 200,000 Grant from other governments 400,000 Loans granted 90,000 Advances granted 150,000 Recovery of advance 30,000 Recovery of loans 20,000 Equity investment 600,000 Investment in other securities 300,000 Sale of equity investment 200,000 Sale of other securities 100,000 Purchase of motor vehicle 250,000 Proceeds from sale of motor vehicles 100,000 Construction of bridges 800,000 Domestic debt borrowing 1,800,000 External debt borrowing 2,000,000 Repayment of domestic debt 450,000 Repayment of external debt 500,000 Domestic debt interest 220,000 External debt interest 240,000…arrow_forward
- Record the following events that affect (1) Public University and (2) Private University: a. A private grant of $200,000 was received to be used exclusively for defraying costs of holding conferences on the topic of genes. b. By year-end, $110,000 of the grant mentioned in item (a) had been applied to the purpose stipulated. c. The grant provided that amounts not awarded by year-end are to be transferred to the endowment fund. The liability to that fund is recorded. d. An alumnus, who was a former athlete, contributed $15,000 to assist in the search for a basketball coach.arrow_forwardThe general fund pays rent for two months. Which of the following is not correct? Rent expense should be reported in the government-wide financial statements. Rent expense should be reported in the general fund. An expenditure should be reported in the fund financial statements. If one month of rent is in the first year with the other month in the next year, either the purchases method or the consumption method can be used in fund statements.arrow_forwardThe organization earns and unrealized gain on its permanent endowment. Is this change in net assets with or without donor restrictions?arrow_forward
- The Village of Seaside Pines prepared the following enterprise fund Trial Balance as of December 31, 2020, the last day of its fiscal year. The enterprise fund was established this year through a transfer from the General Fund. Debits Credits Accounts payable $ 103,000 Accounts receivable $ 25,800 Accrued interest payable 28,900 Accumulated depreciation 46,500 Administrative and selling expenses 48,500 Allowance for uncollectible accounts 12,400 Capital assets 707,000 Cash 90,200 Charges for sales and services 553,000 Cost of sales and services 495,000 Depreciation expense 46,500 Due from General Fund 17,100 Interest expense 40,200 Interest revenue 4,300 Transfer in from General Fund 115,200 Bank note payable 625,300 Supplies inventory 18,300 Totals $ 1,488,600 $ 1,488,600…arrow_forwardBelow is the complete set of Financial Statements of Take-Home University (THU), a PublicUniversity of Ghana, issued on 1st May 2020.Statement of Financial Performance for the Year Ended 31 December, 2018Revenue NotesGOG grant 1,540,000,000Internally Generated Funds 2 14,427,492,000Donations and other income 9,278,258,00025,245,750,000ExpenditureCompensation for employees 3 8,385,270,000Goods and services 4 2,238,083,000Social benefit 1,720,000Interest 1,720,000Capital expenditure (CAPEX) 5 25,542,515,000Other expenses 6 79,100,00036,248,408,000Net Operating Result – Deficit (11,002,658,000)Statement of Financial Position as at 31 December 2018NotesCurrent AssetsCash and cash equivalent 294,233,000Receivable (468,050 -10,000) 458,050,000Inventory 155,254,000907,537,000Liabilities and FundPayable 7 696,325,00020% Loan 8,600,000704,925,000Accumulated fund 8 202,612,000907,537,0004Cash Flow Statement for the Year ended 31st December 2018Cash InflowsGOG grant 1,540,000,000Internally…arrow_forwardBelow is the complete set of Financial Statements of Take-Home University (THU), a PublicUniversity of Ghana, issued on 1st May 2020.Statement of Financial Performance for the Year Ended 31 December, 2018Revenue NotesGOG grant 1,540,000,000Internally Generated Funds 2 14,427,492,000Donations and other income 9,278,258,00025,245,750,000ExpenditureCompensation for employees 3 8,385,270,000Goods and services 4 2,238,083,000Social benefit 1,720,000Interest 1,720,000Capital expenditure (CAPEX) 5 25,542,515,000Other expenses 6 79,100,00036,248,408,000Net Operating Result – Deficit (11,002,658,000)Statement of Financial Position as at 31 December 2018NotesCurrent AssetsCash and cash equivalent 294,233,000Receivable (468,050 -10,000) 458,050,000Inventory 155,254,000907,537,000Liabilities and FundPayable 7 696,325,00020% Loan 8,600,000704,925,000Accumulated fund 8 202,612,000907,537,0004Cash Flow Statement for the Year ended 31st December 2018Cash InflowsGOG grant 1,540,000,000Internally…arrow_forward
- The following are selected transactions for Lakeview Cooperative which uses the restricted fund method. Lakeview has an operating fund, a capital fund and an endowment fund: Pledges amounting to $550,000 were received, of which $75,000 applies to the operations of the following year. It is estimated that 3% of the pledges will be uncollectible. A former resident who became a successful businessperson, donated $80,000 to be held in an endowment. Interest on the endowment is unrestricted. The association purchased furniture and fixtures at a cost of $14,000. These purchases were made using operating funds. Pledges of $350,000 were collected, while pledges amounting to $5,500 were written off as uncollectible. A local newspaper agreed to offer Lakeview a full-page ad. This had an estimated value of $1,500. Interest and dividends received amounted to $8,000 on endowment fund investments. Amortization for the year amounted to $20,000. Required: Prepare journal entries to record the above…arrow_forwardThe Eaton School District engaged in the following transactions during its fiscal year ending August 31, 2021. • It established a purchasing department, which would be accounted for in a new internal service fund, to purchase supplies and distribute them to operating units. To provide working capital for the new department it transferred $1.7 million from its general fund to the internal service fund. • During the year, operating departments that are accounted for in the general fund acquired supplies from the internal service fund for which they were billed $300,000. Of this amount the government transferred $200,000 from the general fund to the internal service fund, expecting to transfer the balance in the following fiscal year. The supplies had cost the purchasing department $190,000. During 2021, the operating departments used only $220,000 of the supplies for which they were billed. They had no supplies on hand at the start of the year. • The school district transferred…arrow_forwardIdentify the letter that best describes the accounting and reporting by the following funds and account groups:1. Enterprise fund fixed assets.2. Capital projects fund.3. General fixed assets.4. Infrastructure fixed assets.5. Enterprise fund cash.6. General fund.7. Agency fund cash.8. General long-term debt.9. Special revenue fund.10. Debt service fund.a. Accounted for in a fiduciary fund.b. Accounted for in a proprietary fund.c. Accounted for in a quasi-endowment fund.d. Accounted for in a self-balancing account group and included in financial statements.e. Accounted for in a special assessment fund.f. Accounts for major construction activities.g. Accounts for property tax revenues.h. Accounts for payment of interest and principal on tax-supported debt.i. Accounts for revenues from earmarked sources to finance designated activities.j. Reporting is optional.arrow_forward
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