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
Videos
Textbook Question
Chapter 5, Problem 23EP
Make all necessary entries in a capital projects fund and the government-wide governmental activities general journal for each of the following unrelated transactions. (The General Fund should not be used.)
- 1. A town secures a note payable in the amount of $150,000 to pay initial expenses for construction of a new police station. Town administrators plan to repay this note within three months with tax revenues and issue a construction bond shortly thereafter.
- 2. A county secures a bond anticipation note in the amount of $500,000 to pay initial expenses for construction of a convention center. The board of county commissioners recommended that the finance department refinance the bond anticipation note by issuing a construction bond when construction activity begins.
- 3. Due to an unexpected change in interest rates, a village issued a $2,500,000 bond at 98 percent of par value. The bond was issued to fund construction of a bike path, including restrooms and picnic shelters. It is expected that the shortage will be covered by a future transfer from another fund.
- 4. A city issued a $5,000,000 bond at 101 to fund construction of a city hall addition. (You can assume that the premium is directly deposited in the debt service fund, and you need not prepare the debt service fund entry.)
- 5. A borough sold $4,000,000 of 6 percent construction-related bonds dated January 1 on March 1 at par. The construction is related to governmental activities.
Expert Solution & Answer
Want to see the full answer?
Check out a sample textbook solution
Students have asked these similar questions
For each of the following events or transactions, prepare the necessacry journal entries and identify the fund or funds that will be affected.
1. A governmental unit collects fees totaling $4,500 at the municipal pool. The fees are charged to recover costs of pool operation and maintenance
2. A county government that serves as a tax collection agency for all towns and cities located within the county collects county sales taxes totaling $125,000 for the month.
3. A $1,000,000 bond offering was issued, with a premium of $50,000, to subsidize the construction of a city visitor center.
4. A town receives a donation of $50,000 in bonds. The bonds should be held indefinitely, but bond income is to be donated to the local zoo. The zoo is associated with the town.
5. A central printing shop is established with a $150,000 nonreciprocal transfer from the general fund.
6. A $1,000,000 revenue bond offering was issued at par by a fund that provides water and sewer services to…
For each of the following events or transactions, prepare the necessacry journal entries and identify the fund or funds that will be affected.
1. A governmental unit collects fees totaling $4,500 at the municipal pool. The fees are charged to recover costs of pool operation and maintenance
2. A county government that serves as a tax collection agency for all towns and cities located within the county collects county sales taxes totaling $125,000 for the month.
3. A $1,000,000 bond offering was issued, with a premium of $50,000, to subsidize the construction of a city visitor center.
4. A town receives a donation of $50,000 in bonds. The bonds should be held indefinitely, but bond income is to be donated to the local zoo. The zoo is associated with the town.
5. A central printing shop is established with a $150,000 nonreciprocal transfer from the general fund.
6. A $1,000,000 revenue bond offering was issued at par by a fund that provides water and sewer services to…
The City of Bagranoff holds $90,000 in cash that will be used to make a bond payment when the debt comes due early next year. The assistant treasurer had made that decision. However, just before the end of the current year, the city council formally approved using this money in this way. The city council has been designated as the highest level of decision-making authority for this government. What impact does the council’s action have on the reporting of fund financial statements?
Fund balance—unassigned goes down and fund balance—restricted goes up.
Fund balance—assigned goes down and fund balance—committed goes up.
Fund balance—unassigned goes down and fund balance—assigned goes up.
Fund balance—assigned goes down and fund balance—restricted goes up.
Chapter 5 Solutions
Accounting For Governmental & Nonprofit Entities
Ch. 5 - What are general capital assets? How are they...Ch. 5 - Explain what disclosures the GASB requires for...Ch. 5 - Prob. 3QCh. 5 - Prob. 4QCh. 5 - Prob. 5QCh. 5 - What is the accounting difference between using...Ch. 5 - Prob. 7QCh. 5 - Prob. 8QCh. 5 - Prob. 9QCh. 5 - What is a service concession arrangement, and why...
Ch. 5 - Prob. 13CCh. 5 - Prob. 14CCh. 5 - Prob. 15CCh. 5 - Under GASB standards, which of the following would...Ch. 5 - Two new copiers were purchased for use by the city...Ch. 5 - Maxim County just completed construction of a new...Ch. 5 - A capital projects fund would probably not be used...Ch. 5 - Machinery and equipment depreciation expense for...Ch. 5 - Prob. 17.6EPCh. 5 - Prob. 17.7EPCh. 5 - Callaway County issued 10,000,000 in bonds at 101...Ch. 5 - Neighborville enters into a lease agreement for...Ch. 5 - Neighborville enters into a lease agreement for...Ch. 5 - Prob. 17.11EPCh. 5 - Prob. 17.12EPCh. 5 - Prob. 17.13EPCh. 5 - Arbitrage rules under the Internal Revenue Code a....Ch. 5 - Prob. 17.15EPCh. 5 - Make all necessary entries in the appropriate...Ch. 5 - Prob. 19EPCh. 5 - Prob. 20EPCh. 5 - In the current year, the building occupied by...Ch. 5 - Prob. 22EPCh. 5 - Make all necessary entries in a capital projects...Ch. 5 - The year-end pre-closing trial balance for the...Ch. 5 - Prob. 25EPCh. 5 - This year Riverside began work on an outdoor...
Knowledge Booster
Learn more about
Need a deep-dive on the concept behind this application? Look no further. Learn more about this topic, accounting and related others by exploring similar questions and additional content below.Similar questions
- The City of Bagranoff holds $90,000 in cash that will be used to make a bond payment when the debt comes due early next year. The assistant treasurer had made that decision. However, just before the end of the current year, the city council formally approved using this money in this way. The city council has been designated as the highest level of decision-making authority for this government. What impact does the council’s action have on the reporting of fund financial statements? Choose the correct.a. Fund balance—unassigned goes down and fund balance—restricted goes up.b. Fund balance—assigned goes down and fund balance—committed goes up.c. Fund balance—unassigned goes down and fund balance—assigned goes up.d. Fund balance—assigned goes down and fund balance—restricted goes up.arrow_forwardPrepare journal entries for a local government to record the following transactions, first for fund financial statements and then for government-wide financial statements. The government sells $900,000 in bonds at face value to finance construction of a warehouse. A $1.1 million contract is signed for construction of the warehouse. The commitment is required, if allowed. A $130,000 transfer of unrestricted funds was made for the eventual payment of the debt in (a). Equipment for the fire department is received with a cost of $12,000. When it was ordered, an anticipated cost of $11,800 had been recorded. Supplies to be used in the schools are bought for $2,000 cash. The consumption method is used. A state grant of $90,000 is awarded to supplement police salaries. The money will be paid to reimburse the government after the supplement payments have been made to the police officers. Property tax assessments are mailed to citizens of the government. The total assessment is $600,000,…arrow_forwardThe City of Greystone maintains its books so as to prepare fund accounting statements and prepares worksheet adjustments in order to prepare government-wide statements. You are to prepare, in journal form, worksheet adjustments for each of the following situations: The City levied property taxes for the current fiscal year in the amount of $8,000,000. At year-end, $720,000 of the taxes had not been collected. It was estimated that $330,000 of that amount would be collected during the 60 days after the end of the fiscal year and that $360,000 would be collected after that time and the balance would be uncollectible. The City had recognized the maximum of property taxes allowable under modified accrual accounting. $255,000 of property taxes had been deferred at the end of the previous year and was recognized under modified accrual as revenue in the current year. In addition to the expenditures reported under modified accrual accounting, the city computed that an additional $104,000…arrow_forward
- Chesterfield County had the following transactions. Prepare the entries first for fund financial statements and then for government-wide financial statements.a. A budget is passed for all ongoing activities. Revenue is anticipated to be $834,000 with approved spending of $540,000 and operating transfers out of $242,000.b. A contract is signed with a construction company to build a new central office building for the government at a cost of $8 million. A budget for this project has previously been recorded.c. Bonds are sold for $8 million (face value) to finance construction of the new office building.d. The new building is completed. An invoice for $8 million is received and paid.e. Previously unrestricted cash of $1 million is set aside to begin paying the bonds issued in (c).f. A portion of the bonds comes due and $1 million is paid. Of this total, $100,000 represents interest. The interest had not been previously accrued.g. Citizens’ property tax levies are assessed. Total billing…arrow_forwardPrepare journal entries for a local government to record the following transactions, first for fund financial statements and then for government-wide financial statements.a. The government sells $900,000 in bonds at face value to finance construction of a warehouse.b. A $1.1 million contract is signed for construction of the warehouse. The commitment is required, if allowed.c. A $130,000 transfer of unrestricted funds was made for the eventual payment of the debt in (a).d. Equipment for the fire department is received with a cost of $12,000. When it was ordered, an anticipated cost of $11,800 had been recorded.e. Supplies to be used in the schools are bought for $2,000 cash. The consumption method is used.f. A state grant of $90,000 is awarded to supplement police salaries. The money will be paid to reimburse the government after the supplement payments have been made to the police officers.g. Property tax assessments are mailed to citizens of the government. The total assessment is…arrow_forwardIn Fulbright County, the Culture and Recreation Department constructed a library in one of the county’s high-growth areas. The construction was funded by a number of sources. Below is selected information related to the Library Capital Project Fund. All activity related to the library construction occurred within the current fiscal year. The county operates on a calendar-year basis. The county issued $6,000,000 of 4 percent bonds, with interest payable semiannually on January 1 and July 1. The bonds sold for 101 on February 1. Proceeds from the bonds were to be used for construction of the library, with all interest and premiums received to be used to service the debt issue. A $650,000 federal grant was received to help finance construction of the library. The Library Special Revenue Fund transferred $250,000 for use in construction of the library. A construction contract was awarded in the amount of $6,800,000. The library was completed four months ahead of schedule. Total…arrow_forward
- On April 1, 2020, the City purchased a swimming pool from a private operator for $500,000 and created a Swimming Pool (Enterprise) Fund. The city has a calendar year as its fiscal year. During the year ended December 31, 2020, the following transactions occurred related to the City’s Swimming Pool Fund: On April 1, 2020, $300,000 was provided by a one-time contribution from the General Fund, and $200,000 was provided by a loan from a local bank (secured by a note), both of which were received in cash. The loan (Notes Payable) has an annual interest rate of 5%, payable semiannually on October 1 and April 1. The purchase of the pool was recorded (paid in cash). Based on an appraisal, it was decided to allocate $100,000 to the land, $300,000 to improvements other than buildings (the pool), and $100,000 to the building. Charges for services amounted to $270,000, all received in cash. Salaries paid to employees amounted to $172,500, all paid in cash, of which $100,000 was cost of services…arrow_forwardDuring the fiscal year ended 6/30/18, the Harriscity engaged in the following transactions. REQUIRED: Assume that the city maintains its books and records in a manner that facilitates the preparation of its governmental fund financial statements. Prepare all necessary journal entries that the city should make for each transaction. Clearly indicate in which fund the entry is being made. If no entry is required, write “No entry required.” a)In July 2017, the city issued $30 million in 6% general obligation term bonds to finance construction of a new building to house city offices. The bonds were issued at a premium of $300,000. b)In September 2017, the city transferred $1.5 million from the general fund to cover the $0.9 million principal and $0.6 million interest payments due that month on debt issued in previous years. c)In September 2017, the city paid the principal and interest due from (b). d)In June 2018, the city transferred $3 million from the general fund to cover the $1.8…arrow_forwardThe City of Waterman established a capital projects fund for the construction of an access ramp from the parking garage to the city’s office building to be used by individuals with disabilities. The estimated cost of the ramp is $200,000. On January 1, 20X2, a 10 percent, $150,000 bond issue was sold at 104.0 with the premium transferred to the debt service fund. At that date, the county board provided a $50,000 grant. After a period of negotiation, the city council awarded a construction contract for $182,000 on April 5, 20X2. The ramp was completed on August 8, 20X2; its actual cost was $189,000. The city council approved payment of the total actual cost of $189,000. In addition to the $189,000, the ramp was carpeted with all-weather material at a cost of $5,500. On November 3, 20X2, the city council gave the final approval to pay for the ramp and the carpeting. After all bills were paid, the remaining fund balance was transferred to the debt service fund. 1. Prepare entries for the…arrow_forward
- The City of Waterman established a capital projects fund for the construction of an access ramp from the parking garage to the city’s office building to be used by individuals with disabilities. The estimated cost of the ramp is $200,000. On January 1, 20X2, a 10 percent, $150,000 bond issue was sold at 104.0 with the premium transferred to the debt service fund. At that date, the county board provided a $50,000 grant. After a period of negotiation, the city council awarded a construction contract for $182,000 on April 5, 20X2. The ramp was completed on August 8, 20X2; its actual cost was $189,000. The city council approved payment of the total actual cost of $189,000. In addition to the $189,000, the ramp was carpeted with all-weather material at a cost of $5,500. On November 3, 20X2, the city council gave the final approval to pay for the ramp and the carpeting. After all bills were paid, the remaining fund balance was transferred to the debt service fund. 1 Prepare a statement of…arrow_forwardTrapper City issued 30-year bonds for the purpose of building a new City Hall. The proceeds of the bonds are deposited in the General Fund. For the governmental fund financial statements, in what fund will Bonds Payable appear? General Fund. Internal service fund. Permanent Fund. Debt Service Fund. Bonds Payable do not appear in governmental fund financial statements.arrow_forwardThe City of Lynnwood was recently incorporated and had the following transactions for the fiscal year ended December 31. 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. Property taxes in the amount of $1,940,000 were levied. It is estimated that $9,000 of the taxes levied will be uncollectible. 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. 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 was $40,000. The city’s utility fund billed the city’s General Fund…arrow_forward
arrow_back_ios
SEE MORE QUESTIONS
arrow_forward_ios
Recommended textbooks for you
What is Fund Accounting?; Author: Aplos;https://www.youtube.com/watch?v=W5D5Dr0j9j4;License: Standard Youtube License